Article

Music bands and partnerships

29th April 2024

Photo of music equipment for a band

There’s nothing more rock ‘n’ roll than an acrimonious bust-up, and, as luck would have it, the very structure of a music band is fertile ground for high-profile, high-value disputes with personal relationships at their very heart. This article is a cautionary tale: “Please, Please, Please”, don’t “Look Back In Anger”, or have a “Momentary Lapse of Reason”, because “The Winner Takes It All”.

So what do The Smiths, Oasis, Pink Floyd and ABBA all have in common? You may have conjured responses such as great music, fame and longevity and you would be correct. However, there is another key aspect of these bands – they are all legal partnerships.

In fact, most music bands are, or start out life as, partnerships, being “the relation which subsists between persons carrying on a business in common with a view of profit”. The relationship between band members, in the absence of a partnership agreement, will be governed by the default regime in the Partnership Act 1890 (the “Act”). This is where the sorcery begins.

Where there is no partnership agreement, profits and capital assets will be shared equally between band members. This is spectacularly illustrated by the legal battle that ensued between the band members of The Smiths. Lead vocalist Steven Morrissey, and lead guitarist, Johnny Marr, claimed that recording and performance royalties should be split 40:40 between them, the remainder being split 10:10 between drummer Mike Joyce and bassist Andy Rourke.

In Joyce v Morrissey & Ors [1999] EMLR 233, Mike Joyce sued Morrissey and Marr, claiming that there was a verbal agreement – or in the absence of a verbal agreement, as a matter of law – that royalties should be split as to 25% each between the band members.

Mr Justice Weeks found in favour of Mike Joyce, who walked away with the £1m in back payments and a 25% share of the royalties thereafter.

As far as we are aware, the potential for the legal looting of the Oasis band partnership’s assets was probably averted on the break up of the band following the Mancunian brothers’, Noel and Liam Gallagher, infamous “Paris bust-up”, by a well-drafted partnership agreement.

When Roger Waters left Pink Floyd, the Partnerships Act caused the dissolution of the band partnership, so he sought a court order preventing his former band members, David Gilmour and Nick Mason, from re-forming and performing or recording as “Pink Floyd”.

A settlement was reached, but not before substantial legal fees were incurred and an ugly exchange of verbal abuse became fodder for the music press. All of which could have been avoided through a partnership agreement.

As to ABBA, in the wake of double divorces between participants, who haven’t shared a stage for years, the partnership has not, officially, ever been dissolved. However, given the enormous value of the ABBA back catalogue, it is unimaginable that the relationship between them is not very carefully documented.

Aside from a legal status, being in partnership gives rise to consequences and obligations that should be fully understood.

The importance of partnerships for bands

We understand that the last thing on the mind of a developing band is a legal contract between its members. However, a partnership agreement can prove extremely useful. Without one, band members are left in a precarious and vulnerable situation.

Hopefully the fate of the various bands considered above will go some way to illustrate how costly and hostile disputes can be easily avoided by a little forward-planning whilst the band is on the rise.

It is helpful to understand just some of the other implications of what would happen if a band did not have a partnership agreement and the provisions of the Act applied without limit. Some key provisions are as follows:

Section of the Act Provision summary Effect
Section 4 Every partner is an agent of the firm and the acts of every partner bind the firm and his partners. One member of the band could agree to a particular job or obligation to which the other band members would not have agreed. However, the other members may now have to carry out the agreed job or obligation. Therefore, it is sensible to clearly lay out in a partnership agreement the power of each members to agree to obligations on behalf of the whole band and to limit the powers of individual members.
Section 9 Every partner is liable jointly with the other partners for all debts and obligations of the firm incurred while he is a partner. Let’s take the worst case scenario: unfortunately things do not go well for the band, the gigs are not producing the money expected and the band cannot pay of the loans it took out to purchase its new stage equipment. In this case, all members of the band would be liable for this debt. However, it may be the case that three of the four band members are not in the economic position that they can contribute to the debt. In this case, the one unfortunate band member who has the liquidity to pay the debts can be pursed for the totality of the debt. Hence, it is prudent to state in the partnership agreement that each member of the band is only liable for their share of the band debts and seek an indemnity from the others for the balance.
Section 20 All property brought into the partnership stock or acquired on account of the firm, or for the purposes and in the course of the partnership business, are partnership property. If you are the pianist or guitarist of a band and you treasure your piano or guitar you should watch out for this provision. It may be the case that the instrument which you brought into the band becomes partnership property and cannot be taken with you when you leave. It would be worthwhile to lay out in a partnership agreement that the ownership of these instruments remains with the individuals, not the band.
Section 17 and Section 33 Every partnership is dissolved by the leaving of a member. A partner who retires from a firm does not thereby cease to be liable for partnership debts or obligations incurred before his retirement. These are very important provisions and provide one the strongest argument for why a band should have a partnership agreement in place. As we know, band members come and go and most of the time this is not acrimonious. If you were in a band, and one member left, this would dissolve the partnership and leave the remaining members in a very difficult position. Likewise, the member who has left may find that he or she is still liable for partnership debts and obligations. Hence, it is important to lay out in an agreement whether the band members do want to have any continuing liability post-leaving and make provision for the partnership to continue in the event that a member leaves.

 

Hopefully, this article has highlighted the precarious situation of a band without a partnership agreement and shown the use of a partnership agreement.

Although it is not very rock’n’roll, having this agreement in place will likely save a lot of hassle further down the line.

Please note, this article is based on the law as applied in England and Wales.

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