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  #1  
Old 11-27-2010, 04:02 AM
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Lucho Lucho is offline
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Default Album Shares - Shareholder Agreement Question

Hey all,

As this is a large forum full of musicians, I'm hoping someone can shed some light on this stuff for me. Right now I'm a full member of a band recording our debut album. We are a 5 piece band, splitting any and all royalties from anything into 6 parts, and the main writer of a song will get 2/6 shares, or 1/3, everyone else getting 1/6.

We are based in Canada, and have registered the songs with SOCAN and CMRRA.

My question to you is, do we need a shareholder agreement for this sort of thing, or once it's registered for these things is it good enough? Am I missing anything?

Also, on the topic of agreements, would there be any other reasons that drafting up some kind of an agreement would be a good idea or a bad idea?

Any help or insight is greatly appreciated :)

Thanks!
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Old 11-27-2010, 04:35 AM
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DrumEatDrum DrumEatDrum is offline
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Default Re: Album Shares - Shareholder Agreement Question

The more than you have written down on paper, the easier it is later on.
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Old 11-27-2010, 05:22 PM
jer jer is offline
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Default Re: Album Shares - Shareholder Agreement Question

I'm no lawyer, but suggest you get one.

Having an agreement is a must if it's going to be released commercially. It's great that you can all agree to those terms, but very important that it's documented in a legally binding agreement that will stand up in court when the one guys wife convinces him that he deserves more.

I'm not sure a simple document written up by the band would actually hold up in court, I was told by a lawyer that it wouldn't, but didn't get an explanation why.

I find your split is interesting, obviously I don't know your writing practices, but are you taking into consideration both songwriting and performance royalties? As in, are you just adding them together and doing the split from there? Are all member going to be happy with this? What happens when one person wrote the lyrics while the other wrote the melody? What if someone wrote a chorus and another wrote a verse?

These are all questions I ask in reference to "is it a good idea or a bad one?"

The bad reasons are that it sucks to have to deal with the business end of the creative process that you've been working on - this can break up bands instantly or create life long resentment between members. The good reasons are that everyone's butt's are covered when the gold-diggers rear their ugly heads.

Not sure about CMRRA, but I'm a member of Socan and I currently accept 100% of a bands funds - the other members of the band didn't sign anything to allow me to do this, so I can't see it holding up in court.

It's not cheep, but a proper lawyer is your definite answer. Especially if you enter contracts with other parties such as labels or distribution.

I've love to hear back on your findings. I'm in the beginning process of something similar to you, I'll post any new / relevant info I get.
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Old 11-27-2010, 08:33 PM
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Lucho Lucho is offline
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Default Re: Album Shares - Shareholder Agreement Question

Thanks for the responses guys.

In response to your specific queries Jer,

Those percentages are specifically for songwriting royalties from Socan and CMRRA. Anything we make live is split evenly 5 ways across the board.

We're making an agreement specific to this album, and we're lucky that the writing was always done by one person. It's been discussed thoroughly throughout the band, if it came up that someone wrote the lyrics and someone else wrote the melody I think we would have to discuss it again, but for now, that's not an issue luckily.

The difference between Socan and CMRRA is as follows (taken from the CMRRA website):

"The reproduction of a copyrighted musical work, either on a sound carrier (a record, tape, CD or other manufactured "contrivance") or in a film, television program, commercial or other program, can only be made with the permission of the music publisher involved. CMRRA's business is the granting of such permission, on behalf of the music publishers, the collection of royalties and fees in return for such reproduction and the distribution of such revenues to its publisher principals.

When a copyrighted song is played on the radio or television, or performed in a theatre or concert, that's an exercise of the performance right in the song. The publisher and songwriter get their compensation for such use from SOCAN, a performing rights society which collects revenues from broadcasters and others for the public performance of musical works. CMRRA is not in the performing rights business."
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Old 12-02-2010, 08:57 PM
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synergy synergy is offline
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Default Re: Album Shares - Shareholder Agreement Question

This might be a little off topic, but I always thought I could perform other peoples works live, as long as I did not receive any monetary gain ie sell recordings of such performance.

And even if I did- as long as I provided some percentage of the sale to the holder of the copyright I was covered?

Is this not the case?

Or do I require permission from Socan etc before I even set foot on a stage?
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Old 12-02-2010, 10:21 PM
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Lucho Lucho is offline
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Default Re: Album Shares - Shareholder Agreement Question

I believe most venues will have a blanket Socan licence that they pay a fee for bands to come and cover songs. This is my understanding.

So in short, no, you don't need to contact Socan to play covers. That is my understanding.
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