Music bands and partnerships

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:

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.