Hiya John. Quite a dilemma for you all this. From my perspective? I compose music and there is no way on earth I'd share the royalties. I wrote the music, damn it :biggrin:
I would look upon the other guys as guests that have learned the songs. Where do they come into the royalties money thing? You could do a Lennon/McCartney type thing I suppose and share no matter who wrote what. Maybe a deal further down the road could be sorted out where you get 100% for the songs you write. It's a shame money has reared it's ugly head so soon for the band. Maybe just sit back and observe for a while?

I wish you well whatever you decide to do :cool:
Cheers
Phil

Royalties should go where they are due. You don't expect Jimmy Page to share royalties with someone just because they covered the tune. There are other royalties that they are entitled to, well, one anyway. That being mechanical royalties. If they performed on a recording, sure, they should get their due from that performance. Until they start coughing up some good material, there is no reason you should have to share any of that with them. Of course, this is just my opinion. Friends should understand that you should be the one to benefit from your own hard work.

Maybe time to talk to a good entertainment lawyer and find out about a contract that lays down all the wherefores before you get much further into this.

It sounds to me you have hired guns and your the mastermind. So pay them as hired help and move on. They get paid for their hours worked, and you get paid for the product.

From personal experience.
First and foremost all expenses get paid first. So if you've invested 10K into the 'business' then the first 10k that comes in goes to pay for those expenses. Of course that should have been spelled out from the get-go. But that's just common sense.

Royalties. This one is a tough one, but don't agonize over trivial stuff. Work out a share that everyone can live with for the short term. They're going to recognize that you did the lion share, but they're going to say it wouldn't have been the same song if it wasn't for their input. So a minimum of 60% and more likely 75% should be in your pocket, and the rest split.
As a lawyer once told me. "just get the rocket off the ground" If things go well, you can re-negotiate later.

Your drummer is right. You need to hash this out now and get things in writing. People need to know where they stand. It will only get harder later. Even an informal letter of agreement is better than nothing. You need to agree on the proceeds from this album, past albums, live performance fees, who is responsible for expenses, the ownership of the name of the band, and how you make decisions about how things get split in the future.

Before you have a lot of pointless discussions, find out what you are legally entitled to. Read Passman's book. A lawyer would be helpful. (Be clear if you are the lawyer's client or the band.) I would not give up what you are legally entitled to as songwriter. I would think that your cash investment should be repaid very quickly. (You might want to distribute some money before it is all reimbursed to keep people's interest.) After that, there are a lot of ways you can go and there will a lot of opinions about what is "fair." Maybe you deserve all the proceeds from the album, maybe it should be split, maybe you want to retain long term rights and split proceeds in lieu of putting the band members on a salary. I've seen all sorts of situations and I'm not going to make a guess at yours based on your post.

Good luck.

Hi Jonn, welcome to RO,

yep yep

I've kinda been in your shoes, I've been in "all-for-one, one-for-all" bands, and I've been the hired gun. And in all 3 scenarios, with everyone, including the road-crew, we always tried to nurture a "you don't work for me, you're working with me" attitude. I always felt like I got a lot more from everyone when they felt invested in the project. However, it was always spelled out from the beginning - this is your job, these are your responsibilities, and this is what you will get paid. Everything was done in the light of day, so there was never any mystery about the gross income and expenses, and if you want a bigger slice of the pie - we're going to need to develop a plan to make a bigger pie. Because I can't give you $1 more without taking $1 from that guy.

In your case, if your bandmates are at all reasonable they should be aware that you're putting up ALL the money and most of the original content. There's no rule that says it has to be an equal 3-way split. If you guys are starting to create a buzz, I'm sure they feel like they're at least partly responsible for your collective success. And I'm sure that's true. On the other hand, you can probably document how much of your time and money has put them in a position to enjoy the level of success they're enjoying right now. And they need to hear how much you've invested to this point and how much work (and money) it will take to get all of you to the next level.

As you've read, there are royalties for the publisher/composer and separate royalties for the musicians who record the songs. But are we talking about royalties for airplay, or do they just want a little piece of the indie release CD sales? Percentages on airplay royalties, and CD sales revenue are completely negotiable. You might be surprised how little it will take to make them happy when presented with the numbers regarding income vs. expenses.

Sometimes it's just a hanger-on, or somebody's brother-in-law that's filling their head with idiotic things like, "Dude, that guy's getting rich off you. 2000 CDs at $12 a piece, that's like $240,000 going right in his pocket. Did you see that new $10 strap he got for his guitar? You know who bought that for him don't ya? You did man!" <

Again, only a clueless moron looks at your situation and thinks that even the correct number is pure profit. Unfortunately, I've dealt with several such morons over the years. A file that contains every receipt and a list of every expenditure it takes to keep their carefree party wagon rolling is usually more than they want to acknowledge, much less deal with. Hopefully you're dealing with reasonable guys of the highest intelligence, who take some pride in what you're doing as a group.

I know that it can be weird and uncomfortable hashing out money issues with friends. And I surely wouldn't approach this as a dictator. It sounds like the musical chemistry is very cool and comfortable. It's in your best interest to keep them happy and keep them around. [Nobody is going to pay to go hear a jam band that is REALLY tense]

As you say, if you're going to make them partners regardless of the percentage, you will be right to expect more from them in terms of paying the bills and promoting the project. Who knows? If they feel more like partners they might put more effort into it. Right now, having only heard your POV, it sounds like you're the only one rowing the boat and they're just enjoying the ride.

That said, the side-man in me knows that band chemistry is a tricky thing. Did the drummer's natural style lead the creative process in a way it wouldn't have gone without him - or could you use a drum machine? Does the bass player bring a flavor that makes everything you create better? Your approach is to 'jam' these ideas out. So the song ideas may start out as yours, but the cool thing about a really organic creative process is - when they add to what you're doing, it gives your song a life of its own it may not have had without their talents. Are you like a snooty restaurant where one guy made the main dish, someone else brings you your wine, and someone else made the dessert? In the band projects I've done, it's usually more like makin' soup. One guy brought the main ingredient, but without everybody else's contributions it isn't soup. On the occasions I didn't want or need the band's input, I would bring the song to practice and ask them to more or less 'play it like this'. And when I'm in the side-man role I expect the band leader to lay down the boundaries 'keep it simple in the verses', or even say, 'play it like this'.

If you're not already doing this, I would recommend a weekly band meeting. If you practice, set aside 30-60 minutes prior to practice to talk about your weekly/monthly/yearly goals. Make sure you all want the same thing. Then talk about what everybody (just you at this point) has done since the last meeting toward that end. Tell them what calls you plan to make before the next meeting and all the other work you're doing behind the scenes. Follow-up at the next meeting with how those negotiations went. If they've got nothing- suggest some things (within their abilities) they could do to help advance the cause. Just don't give them tasks that will hurt the business.

You will have to ask yourself a few questions:

Do I trust them to represent us (me) as a professional?
Do they tend to show up for appointments on-time?
Do they look like they just rolled out from underneath a pile of empties?
Can they conduct themselves in a professional manner?
Would I go into any other type of business with these guys?
Can they complete a sentence?
Can they complete a sentence that isn't laced with profanity? There's a time and place for that, and it's not while negotiating to get your product placed in stores, song played on the air, or your band booked into a new venue, etc.

Depending on where you're at after a couple discussions, I'd definitely consider a contract that says, "you get paid $___ for doing that___". If they want a bigger stake in the success of the band, they will have to do this___ to make a percentage of that $____. If they're not happy with the percentages, invite them to be full partners - which will require them to do a lot more work off-stage AND put up $__,000 to buy into the indie label you've established. Lawyers and contracts, lawyers and contracts.

It's a huge pain, but if you're on the verge of something big happening, it's better to come to an understanding now. The same issues that cause a lot of marriages to explode under pressure are the same things that will rip a band apart. Division of money and division of labor (you'll have to draw your own analogy about withholding ..... um .... intimacy - let's see the censors bleep that). And if somebody's the least bit unhappy about any of those things, they start having thoughts about that perky little band across the street - ooh, she'd treat me nice.... and they're gone. What are the chances you can find someone to replace them that won't destroy the chemistry? Parts of this are kinda black and white, the chemistry issue is pretty sketchy. I've had good and bad experiences plugging in new members.

As the primary songwriter Pete Townsend made a lot more money than the rest of The Who and it caused a lot of resentment. Would any of Pete's songs been as good without the energy Entwistle and Moon brought to the mix, or Roger's voice? I sure don't think so, but Pete got the bulk of the money for writing a lot of the hits. A classic case of the finished product being greater than just the sum of the parts. Only you can assess how much your bandmates' talents and abilities increase the value of your business.

While I'm sure Natural's lawyer is addressing a specific circumstance. My lawyer would counter, "it's all fun and games until somebody starts making money - then everybody thinks they deserve a piece of your work."

OK, enough already... maybe this would have been a better blog.... best of luck!

DvdHawk "That said, the side-man in me knows that band chemistry is a tricky thing. Did the drummer's natural style lead the creative process in a way it wouldn't have gone without him - or could you use a drum machine? Does the bass player bring a flavor that makes everything you create better? Your approach is to 'jam' these ideas out. So the song ideas may start out as yours, but the cool thing about a really organic creative process is - when they add to what you're doing, it gives your song a life of its own it may not have had without their talents. Are you like a snooty restaurant where one guy made the main dish, someone else brings you your wine, and someone else made the dessert? In the band projects I've done, it's usually more like makin' soup. One guy brought the main ingredient, but without everybody else's contributions it isn't soup."

As far as song writing credits I use this rule, if I bring it in finished, lyrics, chords, melody, etc. and my "band mates" interpret or add say a lead then I'm not giving a credit to anyone else. If on the other hands I bring it in rough, "What should we do here? Does it need another verse, I got this chorus, or been playing with this progression... then that's completely different credit where credit is due. In the end I really, really wish I was being sued about that kinda thing...it would mean there was too much money

Mr. Hawk has spelled it out pretty clearly in his post.
Somewhat like him, I've been a musician, musician/composer, recordist/mixer/producer, and a hired recording engineer -
in most cases where there was some discrepancy as to who made what contributions.

I'd outline your concerns, and try to meet them part way:
1. Getting money back on your $$ investment (since you do the booking, and are the formative member, I'd slowly pay this back from shows)
2. Something like a 70/15/15 split on composition royalties, be prepared to go 60/20/20
3. Something like a 75/25 on the first album sales and a 40/30/30 on the one with both.
4. Once your initial investment is recouped, offer them even split on all income from live shows.
5. Offers of potentially more % for them on royalties if certain conditions are met

Mostly rehashing Hawk's suggestions, + the others' as I see it.
Ultimately they should understand it is primarily your baby, and be happy w/ partial compensation for their work (I would) -
especially if they know more $ and time investment on their part means a greater piece of the pie.
On the other hand, you can't overlook the importance of their contributions.
What percentages are due will have to be hashed out by the three of you.
At which point, get it in writing and get it signed and notarized.
Better yet, give a lawyer your terms and have them write the contract.
Even better yet, contact that lawyer concerning your interests first, then move forward.