Pooled royalties, copyrights, etc.

Discussion in 'Band Management [BG]' started by Bob Palmer, Aug 14, 2013.

  1. Bob Palmer

    Bob Palmer

    Apr 17, 2013
    Hey all,

    As you may or may not recall, I had asked about handling of band revenue in an earlier thread, and as advised, we had a band meeting and got everything hammered out, including an agreement since we were about to spend some coin in the studio.

    Long story short, we have agreed that all revenue (including songwriter and publishing royalties, sync fees, etc.) that derive from the songs we record/perform together will be split, regardless of who wrote them. So in short, a good outcome and one that we think will help ensure the longevity of the group since the whole 'money' bit is sorted.

    The specific question I have is this. Since we're now publishing our songs to various streaming and downloading services, etc. it may (if things take off) be a case where we would want to ensure we get some of those songwriter royalties for the pool.

    So in a situation where one band member wrote the songs (chord progression, lyrics, melody), but is in an agreement to pool all royalties among the band members who performed on that song (including assignment of copyright to a publishing entity formed by the band members to administer any interests), how would we fill out things like songwriter credit?

    i.e. should we list the actual songwriter (or songwriters, since there may be some collaborative works in the future), or is there some other method we'd need to follow when dealing with BMI, ASCAP, etc. in light of the pooled royalty pool and reassignment of copyright?

    Again, just trying to sort all of this out in advance to make things easier if/when the time comes where one of the songs takes off.

    Thanks again everyone for the awesome advice thus far!
  2. hrodbert696

    hrodbert696 Moderator Staff Member Supporting Member

    I am not a lawyer and to get a proper answer to this question you should speak to one. All I know is what I just read in the Indie Band Survival Guide, which you might want to take a look at. But as I understand it, ownership of the SONG and ownership of the SOUND RECORDING are legally two distinct things and you need to specify both. For instance, if someone makes a cover of your song they owe royalties to the owner of the song but not the recording owner.

    Not only that, but the law distinguishes between the AUTHOR of the song and its PUBLISHER. You need to specify both - and there's no reason they can't be the same person, or the band itself, but you have to spell that out.

    I'm pretty sure that, in the situation you describe, you want to list author of the song as *your band*, publisher of the song as *your band*, and owner of the recording as *your band.* Your band agreement should also specify which individuals are meant by *your band* and what happens if someone quits or is fired, the band breaks up, or a new member joins.

    On a website and probably CD liner notes, you can detail whatever you want about who actually wrote which parts of which song, but on any legal document be consistent about assigning these roles.

    That's how I understand it, anyway. Maybe others can clarify better or correct me.
  3. What he said ^^^^.

    On top of that, get everything IN WRITING.

    It's for everyone's benefit and protection. It won't take much time and, if you make it big (EDIT: if you make money off it, period), you be glad you did.

    People tend to forget this most important step because the odds of making it big are slim. Another example, look at the mess created almost every time a "lottery pool" has a winning ticket. Everyone's all nice and friendly "We'll share it equally." Nothing in writing, because the odds of actually winning are so small, most people assume they're not going to win and going through the trouble of a legal agreement seems silly. Until they actually win. Then greed jumps on everyone and and the fights begin ("This was a personal ticket, not one of the pool's tickets"). Only one person's word against another's.
  4. Bob Palmer

    Bob Palmer

    Apr 17, 2013
    Yep, we have everything in writing, and it spells out pretty clearly that all revenues from ALL royalties by any band member (both publishing and songwriter) are divided equally.

    Where I get into question territory is how to handle songwriter credit wht a PRO given that copyright is being transferred to a band publishing entity.

    Understand that we're not lawyers, but was hoping this was not a unique situation, and would be curious what other bands have done.

  5. I highly recommend you consult with a Music Attorney.

  6. Music Attorney

    Music Attorney

    Feb 22, 2004
    Your post raises a lot issues, but your “specific question” is somewhat addressable. Monies from exploitations (e.g., iTunes, film/tv, etc.) of musical compositions are paid to the publisher(s) of the applicable musical composition. The publisher is the copyright owner (or owners) of the composition. For example, if the guitarist and vocalist create a song 50-50, then the publisher for the guitarist and the publisher for the vocalist will each collect on behalf of the respective writers.

    Let’s say there is a sale of one recording on iTunes. The total pot of money payable for the composition is 9.1 cents. Accordingly, in my scenario above, each publisher would collect 4.5 cents on behalf of each of their writers. If the publisher for one of the writers was something like Sony/ATV, then there is a contract that determines how much of the 4.5 cents Sony/ATV will keep and how much it will pay out. If the writer is self-published, then the money goes to the writer’s publishing company (e.g., Guitar Player Publishing, Inc.) which then should have an agreement with the guitar player as to how that is divided up. I understand it appears that the player’s pub company and the writer are one and the same (and they are), but for reasons too detailed to go into here, what I’m suggesting (i.e. a separate agreement between the writer and his own pub company) is the proper way to handle it.

    That said, let’s take the scenario where the guitarist and vocalist create a song 50-50, but agree to split the income equally among band members. Based on my foregoing example, you could:

    1. Let the two writers maintain their 50% copyright and register the songs that way PROVIDED there is a separate band agreement that says 100% of the money paid to the writers is split equally among Person A, Person B, Person C, and Person D. For the non-writers in the group, this is commonly referred to as an “income participation” or “passive participation” (i.e. a right to receive money, but not actual ownership of the intellectual property); or

    2. There could be a band partnership agreement that says all songs created by the band members are owned by the partnership and all monies received by the partnership from the exploitation of the compositions will be distributed equally among Person A, Person B, Person C, and Person D. In this scenario, the partnership would be the publisher (i.e., the owner of the copyrights and register as the Publisher) and would pay out monies from the exploitation of the compositions based on the partnership agreement. The writers would still be listed as the guitar player and the vocalist, but the publisher would be listed as "Band Publishing, Inc."; or

    3. The band members could simply agree in writing (e.g., an email exchange) that each member is entitled to X% of song "Song Title" and entitled to administer their own share (i.e., each member collects their respective share of money individually). In this case, songs would be registered with each individual songwriter's name and their publishing designees.

    There are many issues with each approach and there are additional details that need to be discussed, but the three basic approaches above are, in my experience, the most common approaches to your question.

  7. Partnerships, easy to get into, hard to get out of. What about a company?
  8. Kmonk


    Oct 18, 2012
    South Shore, Massachusetts
    Endorsing Artist: Fender, Spector, Ampeg, Curt Mangan Strings
    My brother is an intellectual property attorney so I asked him. He said if you register and copyright a song and only list the person who wrote it, that person legally owns the rights to the song. At some point, they could claim that there was never an agreement to split revenue. Even if you have a separate written agreement, you would have to take that person to court to prove that the agreement was in place and that could be costly. His suggestion is to either list everyone as writers or just let each member claim whatever songs they actually write. He also advised that the band meet with an intellectual property attorney who specializes in copyrights.
  9. Problem solved if you list everyone as writers, consistent with the original agreement!
  10. Music Attorney

    Music Attorney

    Feb 22, 2004
    Not true. Anyone on this list could register and copyright a song, if they want. That doesn't mean they own the copyright in the song. As I've written elsewhere, registration is only prima facie evidence of ownership. It's far from conclusive.

    This is even less true on a myriad of levels. If the agreement contains a proper assignment of copyright to an individual, it doesn't matter whether that individual added one note or lyric, they are still the copyright owner in the eyes of the law. I've posted previously how many big-name artists require a piece of the publishing (including being listed as a songwriter) as the cost of getting a client's song on the artist's album. In those instances, assuming the paperwork is proper, the artists are listed as a songwriter for all purposes and in the same manner as the songwriter(s) who actually created the song. I've been on both sides of this situation (i.e., taking and giving) and I've never had the situation go to court to prove anything.

    Check out how many songs Morris Levy is listed as writing for a clue that non-songwriters can make a very good living being songwriters.

  11. Good info. Thank you MA.

    OP, this thread is a good example of why I highly recommend you consult a "Music" Attorney - maybe shoot MA a PM and ask about having him represent you.
  12. MtnGoat


    May 7, 2000
    MA has made some good points so far.

    What you are talking about in the big picture is running the band as a business with profit sharing for the intellectual property, i.e, the copyrights, publishing rights, trademarks, etc.

    It needs to be done properly and in writing. Naming individuals as writers when they are not can cause problems in the future.

    The contracts or business operating agreement can make this all fit together nicely and allow for a change in members etc.

    If you want legal advice on how to structure a band as a business while giving proper attention to copyrights, trademarks, and other rights, the advice to consult an attorney is sound.

    I am am an intellectual property and business attorney with background that includes 20 years of being a professional musician and know the legal side as well as the reality of how bands, the musician's union, and labels operate in and react to formal business affairs. Contact me if you need assistance with your band and its assets.
  13. Bob Palmer

    Bob Palmer

    Apr 17, 2013
    Thanks for all of the great replies everyone :)
  14. Who's skimming the remaining 0.1 cent? :)