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by: Shelly Harris / Entertainment
Attorney
MORE ANSWERS TO READER'S QUESTIONS....
QUESTION:
I’m in a band that recorded one
independent (self-produced) CD with
all the same band members, and we have another CD almost completed.
However, one of the members just left the band under negative circumstances
(we’ve since got someone to take his place), and, though we don’t want to go
in and re-record his work on the new CD, we also don’t want to have him
coming back to us later demanding any royalties if we make money off this
record or if we get signed to a label. What are our rights, his rights,
and
is there anything we can do to make sure he is out of the picture
royalty-wise from now on?
_______________________________
ANSWER:
Although you do not state whether the departing
member is also a
songwriting member, this question brings up at least three interrelated
matters involving the importance of having a written band agreement andcopyright issues and consequences.
To begin with, a way of circumventing this kind of problem is
to have a
written band agreement that specifically states each member’s stake in the
band’s products and royalties, and which may even provide for a specific royalty split for both performances (live and recorded) and original
compositions. Thus, even if there are four band members and all four of
the
band member’s names appear on the formally filed copyrights for your material
AND performances, a band agreement could for a split in performance and
composition royalties that is not necessarily equally divided. A band
agreement can also exactly provide for how investments in the band, or income
and liabilities, future and present, are to be distributed, as well as how
departing members of the “partnership” legally dissolve their interests in
the band partnership. (And a band is usually considered an equal
partnership
by default, particularly in the eyes of the IRS, unless is it clear that
certain assets, including the band name, belong to specific individuals, and
unless records indicate that one of more of the band members are actually
“paid for hire” and not actual full-fledged members of the band.)
Absent such an agreement, it could reasonably be inferred
that the
departing member has at least some interest in potential royalties both from
the first CD and parts of the second one you are working on now. If he was
actually a full or partial composer of any of the songs on either CD, he will
have a stake in the songwriting royalties as an individual (if he is a member
of one of the performance rights organizations like BMI, ASCAP, etc.) and
also as a publisher if he has his own publishing company to collect the
publisher’s 1/2 share of songwriting royalties. If he is part of the
band’s
joint publishing company, if you have one, then he would probably have an
equal stake in that as well (unless specified otherwise in a written
agreement amongst you). However, even if he was never a composing member of
the band, and was never credited as such either on the recording itself or on
any copyright applications, he would still have a stake in potential
mechanical royalties that might accumulate from sales of the CDs.
With regard to the second in-progress CD, his percentage of
the
mechanical royalties could be broken down mathematically according to the
number of band members performing on the songs, and the number of songs he
actually performed on. Right now it does not appear that you have a record
label or contract involved, but, if you did, such a contract should provide
for his percentage of any performance or mechanical royalties. (When a record
label contract is involved, the label will usually take a specified piece of
the pie as well, and your share as a group and individually should also be
specified on any of the relevant royalties.)
In a nutshell, however, the simplest solution to this problem
(which
definitely could incur future litigation), is to persuade him to agree to a
flat fee payment for all his past services, as a kind of retroactive “work
for hire.” If he would be willing comply with such an agreement for a
mutually agreed upon fair sum, it should always be in writing and should
specifically state which and how much of any future royalties he gives up for
the flat payment. (Whether you filed copyright applications with the federal
government on any of the songs or not, it would be too late –– absent a
contract assigning his rights to the band or other outsiders –– for him to
forfeit any composer’s or publishing royalties he has a stake in, at least on
songs from the first CD, since, presumably, they have already been
distributed to the public.) As a side note, it is common to “hire”
music ians, artists, models, etc., for recordings and album artwork, but you
should be certain that they sign a “work for hire” contract in advance that
clearly states the specific sum they will be paid, and that they will have no
stake in the royalties of the recording for which they have provided their
services.
Finally, although it is too late to do anything about his
stake in the
first CD, you might still want to consider re-recording the songs he appeared
on the current CD either completely or through overdubs or other technical
studio magic.
Before doing any of the above, however, be certain to consult
an attorney
with your precise issues and facts, and – to avoid any future claims of
coercion or conflict of interest issues, etc., also make sure he has been
advised to consult independent counsel of his own before signing any
contracts or agreements.
NEXT MONTH: Trademark/Servicemark application form issues.
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