How Do Recording Bands Split Money?

[sax4blues]

My sons band is being wooed by a record company. We will see the contract next week. I don't know anything about the music business but I do know business and contracts. I can only imagine there are a million ways to form contracts but I would guess there are some consistent starting points. I also do not have any stars in my eyes that there is going to be money flowing from this endeavor.

What I want to ask about here is some of the ways bands will split between members? Specifically in his band they are three pieces, singer/guitar player who writes all of the songs, my son is drums and the other kid is bass.

I would assume the writer will have a larger share. Are there formulas for various levels of contribution?

[JeradP]

The band=.5%
The record company=99.5%

[dantonel]

Have a (trusted) Music Lawyer go over the contract and your Boys might have some negotiating power if the record company wants them that bad. Basically everyone is paid on points Most of the money comes from Merch and touring Profits not actual Record sales.

Check this out too:

http://en.wikipedia.org/wiki/Recording_contract

[cntry666]

There's a lot invloved other than a split. There are publishing and copywrite deals as well. If your kid is the drummer and does not write he probably will get less than the kid who writes everything. It's just the way life is but he will get performance rights and so on. Best advice is please make sure you get someone who knows about these things to look at the contract. To answer your bottom line, no doubt writer gets the most money.

[WickedGTR]

The record company pays the band their share of the money.

It's up to the band (or manger, accountant etc) to divide the money between the band members. Not all bands share money equally among members- in fact most do not.

I've said this before here many times and will say it again.... A band that is going to make money needs a contract between the band members before they make any money...Who gets what, who can fire whom, etc etc.

The band=.5%
The record company=99.5%
__________________
It's wrong to be politically correct.

^ This is not correct, politically or otherwise.

[ironmike]

There's not a simple answer...the money gets split a variety of ways depending on songwriting, performance, publishing and other factors. If this is your first rodeo, get a music lawyer and let them advise you.

I have had 3 different record deals and am pretty good at the financial and legal side of the business at this point, but I still use an attorney just in case. In fact, these days I go the unorthodox route of licensing my recordings to a label instead of doing the standard recording contract. It allows me a bit more freedom in everything from recording to taking my music with me when the deal is over.

[sax4blues]

Originally Posted by ironmike

these days I go the unorthodox route of licensing my recordings to a label instead of doing the standard recording contract. It allows me a bit more freedom in everything from recording to taking my music with me when the deal is over.

Does this mean that you are financing the recording? Then presenting a finished product to the label?

[String Tree]

Originally Posted by JeradP

The band=.5%
The record company=99.5%

That is pretty generous.
Never heard of a band making that much.

[String Tree]

Originally Posted by sax4blues

My sons band is being wooed by a record company. We will see the contract next week. I don't know anything about the music business but I do know business and contracts. I can only imagine there are a million ways to form contracts but I would guess there are some consistent starting points. I also do not have any stars in my eyes that there is going to be money flowing from this endeavor.

What I want to ask about here is some of the ways bands will split between members? Specifically in his band they are three pieces, singer/guitar player who writes all of the songs, my son is drums and the other kid is bass.

I would assume the writer will have a larger share. Are there formulas for various levels of contribution?

In a nutshell: They are signing the WRITER of these songs.
What they want are the MASTER RIGHTS for Publishing their songs.
That is where the real money is.

If the 'band' has no contract between themselves about how the loot gets split (provided they even get a dime), things can get ugly, fast.

Get a Lawyer who specializes in Music Publishing.

[RomanS]

Read:
http://www.negativland.com/albini.html

[sax4blues]

Originally Posted by String Tree

In a nutshell: They are signing the WRITER of these songs.
What they want are the MASTER RIGHTS for Publishing their songs.
That is where the real money is.

If the 'band' has no contract between themselves about how the loot gets split (provided they even get a dime), things can get ugly, fast.

Get a Lawyer who specializes in Music Publishing.

Ok, this makes sense to me. The "star" of this production is really the songwriter/singer/guitar player. The band name currently is her name, all of the contacts are hers. She and her family are the ones who want a music career.

My son is about to sign up for the Air Force so he can kind of take or leave this deal. If there is a chance to do some touring and live the rock n roll dream while he's 19, grow his experience, and make some of his own music contacts this could be fun. But we've talked about the fact that this is her band, her parents are running the show, and just like you and I at work, when they say jump he'll pretty much be obligated to say how high?

[String Tree]

Tax Liability. Who gets stuck with it?
The LAST thing he needs, is to be Liable for taxes on income he never sees.
It happens.

[ddewerd]

FWIW, my nephew's band was signed by Capitol Records a few years back and did the Vans Warped Tour.

I think their contract was for something like $250K - sounds like a lot. But expenses on the road ate all of that up, and they basically got a cool experience of touring with a fairly major show for about a year, but in the end basically broke even.

They did one CD and then Capitol dropped them, wanted them to be more punkish and they were more hard rockish. It was kind of tough for them in that they were promoted to 14 year old girls, and they were all 19-20. It got hard to sing about teen angst and parent problems, especially when all the parents were very supportive - but that's where Capitol wanted them to go.

Anyways, get a lawyer, and don't get your hopes up too high. I think a bit of touring would be a great goal, but only expecting to break even is probably as realistic as it will get.

Good luck to your son, in the band and in the Navy.

Cheers,
Doug

[ironmike]

Originally Posted by sax4blues

Does this mean that you are financing the recording? Then presenting a finished product to the label?

Yes...I have my own studio and do all the production, arrangements and even mastering myself.

[ironmike]

Originally Posted by String Tree

In a nutshell: They are signing the WRITER of these songs.
What they want are the MASTER RIGHTS for Publishing their songs.
That is where the real money is.

If the 'band' has no contract between themselves about how the loot gets split (provided they even get a dime), things can get ugly, fast.

Get a Lawyer who specializes in Music Publishing.

This is somewhat true but there are performance rights that also need to be negotiated. In other words, the bands gets compensated for performing the song. In days past this would be something like 10% of the money for each unit sold. These days some larger acts are getting as much as 18-20% performance royalty per unit sold. Performance rights extend to licensing(like for commercials or movies) and just about anything else where the performance may be used.

How THAT money is split amongst the members should be negotiated between members.

Songwriting royalties are split amongst songwriters.

I recommend immediately establishing your own publishing company under BMI. Its quick and easy. Then register all your songs under that publishing company. Then when the label wants a piece of the publishing, you can go to work negotiating how much, if any of those publishing rights you are willing to share with the label.

The bigger and more mainstream the label, the more publishing they will likely demand for the amount of exposure they will be giving you. Its very common for new acts in pop, country or rock to have to negotiate some portion of their publishing away to get a deal with major labels, but its not always the case. Like any other business deal, its about the negotiations.

Fortunately I come from a small genre(blues) and have never had to negotiate any of my publishing away to get or save a record deal.

...and then there's merchandising rights, and bonuses, advances, tour support, etc, that will ALSO be negotiated.

GET A LAWYER.

[Jack S]

It is good that you ask this now. They need to come to a written agreement before endeavoring in anything where money is concerned. The songwriter can receive royalties for the composition, but contributing musicians can also be eligible for a share, as well. The record company will often have clauses where they assume ownership or shares of various royalties.

Before anything is signed make sure the guys read up on royalties and understand the types of royalties (publishing/writing, mechanical, etc.) and how they are paid out. Do not let them sign away all their rights just to get recorded. It may be necessary to share publishing or mechanical rights with the company to get signed, but think about it carefully. Make sure it is something they want to do. It could bind them for life if they are not careful about it. This is where a good music industry lawyer could be of assistance.

Many times recording artists have non-band member musicians record on a piece and there are two ways that they could get paid, through royalties or more commonly, they sign a work for hire where they are paid a one-time fee for services and give up any right to future royalties.

They need to consider all of this and not go into an agreement blindly.

[Joe-Bob]

You might want to read Don Passman's book: All You Need to Know About the Music Business

http://donpassman.com/

[charlie chitlin]

Make sure you listen to WickedGTR.
You may not realize the depth of his experience because he didn't blow his horn.
Suffice it to say, you've heard him on the radio.

[jdavid321]

Hello guys,

Just thought I'd share quite an interesting blog about band agreements: http://www.avenantlaw.com/whybandagreement/

According to this blog, bands should have band agreements (which are actually 'partnership agreements') in place even before any money starts being earned.

also there is a template with a preview here: http://www.themusiciansguide.co.uk/band-agreement.php

In case anyone's wondering what should be included

[vincent]

There is another great book called Music Law by Rich Stim put out by Nolo Press. This is an excellent book that anyone in a band should have on their "must read" list. It covers a lot of topics but specifically the different types of contracts, the different types of royalties, setting up your business structure, copyrights & ownership, publishing, & taxes. Just to name a few.

http://www.amazon.com/Music-Law-Your-Bands-Business/dp/1413310567/ref=sr_1_1?ie=UTF8&qid=1335707540&sr=8-1