Most Common Legal Issues Facing Artist and Entertainers

This week, I had the opportunity to speak with The Law Offices of Norman Gillis & Associates regarding the most common legal and liability issues surrounding bands, artists and other entities in the entertainment business.

I was not surprised to learn that many of the new performance groups, as well as many of the mid-level professional groups in the music industry, aren’t truly aware of what is needed to set up and maintain a successful project in the business and (or) what all their project could be held liable for in the marketplace. These start up and liability issues typically range from confusion over the ownership of the band name to strict liability lawsuits based on an injury that happened to a fan at one of the groups’ shows.

During my conversation with Chris Skinner (clients include: Brooks & Dunn, Pam Tillis, and OmniSound Studios, to name a few), a consider amount of time was spent talking about the simple, inexpensive process of truly being ready to generate income in the music business and protect the groups’ intellectual property, as well as liabilities during live events.

The top five issues Mr. Skinner and I discussed are:

Setting up shop for business

Most groups aren’t aware that taxes need to be paid on the income generated from their live Shows, merchandise sales and paid public appearances. Often groups don’t understand the value in setting up a corporation, an LLC, or any of the other types of business that one can register. Often groups will become quite successful in a region, and have generated a substantial amount of income as a group before being audited by the IRS personally. More often than not, the group will want to secure some form of credit to finance a recording or to buy a vehicle for travel, having a legitimate business structure can help secure the lines of credit needed for growing the project and will also offer a potential investor the ability to review the financial potential of the group.      

Member Agreements

The majority of local and regional talent performing in a band together has nothing more than a verbal agreement, or even worse, what they consider to be an understanding of what happens to the music written during the groups’ life or the what will happen to the band name if the group should ever break up. This issue is very common, and without a written agreement of which member gets what rights to the intellectual property and which portions of the groups’ income, many individuals that were thought to be great friends have become spiteful enemies.

Registering Intellectual Property

A songwriter, or group of songwriters for a project, usually has the vision of sitting in a mansion somewhere on a beach surrounded by thousands of dollars of expensive toys, yet doesn’t register or protect their music with a copyright. Typically this means they’ve not registered any of the original material with ASCAP, BMI, Nielsen SoundScan, or the other professional organizations that track airplay and recorded sales. The importance of registering one’s intellectual property is a subject Mr. Skinner and I spent a good portion of time discussing.

Protecting the group

More so than just protecting the band name, a group needs to be aware of how they can be held responsible if someone were to get hurt during an event. Such as the case where a fan was injured during a crowd surfing incident in San Luis Obispo, California where a fan was pushed into a speaker and now has permanent double vision. The group responsible for this accident had no liability insurance for that particular performance and now finds themselves in a thirty-five thousand dollar lawsuit for damages and medical expenses. Mr. Skinner’s advices on this subject, “if presented an insurance liability waiver at a venue, secure the insurance on your own.”

Shopping Unsolicited Material

Many groups want to be successful in the music business. The idea of landing a record deal is at the forefront of many artists’ brain. One of the biggest misconceptions about sending or “shopping” the groups’ material to an established company is that a person can stuff a CD-R or bit of recorded media in a package, walk it into, or mail it to a record company and they’ll listen to the music and fall flat on the floor over its awesomeness. “This is just simply not true,” says Mr. Skinner. Most new bands are ignorant to the protocol of a “press kit” and how beneficial an entertainment attorney can be when it comes to shopping a groups’ press kit to a record company. Simply put, 99% of the time a group’s demo will be thrown in the trash if it is unsolicited by an interested company.

Conclusion

It is absolutely paramount to have an entertainment attorney on standby for a serious project in the music business. Though many individuals are very well adept to look over booking agreements and register their works with performing rights organizations, as the group grows into what could become a substantial part of any market and generates label interest, it is more important than ever in the entertainment industry to have a qualified legal professional acting on the groups’ behalf.

In addition to good legal advice, many professionals in the music industry recommend the book “All You Need To Know About The Music Business” by Donald S. Passman as a great source of knowledge for getting a project ready to seriously pursue any kind of next-level success.