Releasing Music Yourself -versus- Not Unless We Get a Deal (1 Viewer)

[pete]

If I owned a major record label I'd be asking hard questions about my A&R staff signing loads of bands who made no money and who the company dumped after one album.

tax loss

 

[RSJ]

I thought bands generally start a company and are signed under that name, so if they go belly up and go bankrupt, it's the company (band) that owes the money and not the individuals?

 

[MDR]

If you don't get a good music solicitor to read your contract and advise before signing you deserve all shafting.

But there's always ways they can shaft you...

You'll usually find that a good solicitor will tell you that it's an industry standard contract; what they don't say is that the industry standard is very poor.

I used to work with the mother of a guy in one of the eirecore bands and saw a deal they were offered by a Dutch label (I think). (I used to work on a lot of legislation and went through it for her.) Their music biz lawyer said it was a standard contract nothing to worry about, even though it involved surrendering control of the band with no guarantee of any releases. Needless to say, they didn't sign.

 

[snap-apple]

No. I'm saying you don't "have to" jump through hoops etc to make your own records. Making a living is a separate thing of course, but who knows, it could be possible.

Dude, read my post. The 'have-to' only relates to wanting to make a living from music. C'mon, I've released 3 CD's meself like and through no hoops did I jump. Didn't even lose that much money

 

[MDR]

tax loss

I doubt they would get a tax write-off on losses attributable to their core business.

 

[hugh]

I thought bands generally start a company and are signed under that name, so if they go belly up and go bankrupt, it's the company (band) that owes the money and not the individuals?

Yes, exactly. This makes sense.

 

[MDR]

The "may or may not" is the nub of the matter isn't it? Waterfall seems to be maintaining that this is up to the label as to whether they go after the band or not for this money. This could well be the case (and it obviously depends on the contract) but as I have said already I find it hard to believe that the individuals concerned could end up indebted afterwards if the label do decide to pursue it. If the band is an ongoing concern then sure, the label probably have a case to recoup their investment. But surely you just break up the band and form another one? What's the big problem? You're probably sick of those tossers you've been jamming with for the last few years anyway.

I think you're probably right. The smart thing would be for the band to form a company with limited liability and to get the label to sign the company. If that 'company' goes bust the members can still go on and fight another day.

 

[Mitchum]

Why should naivety deserve punishment?

...because it's a cold and merciless planet.

A major label's sole responsibility is to maximise profits for it's share-holders just like any other PLC.
All this hand-wringing and gnashing of teeth about the majors gets on my wick. Especially in 2007.

 

[billygannon]

An advance is a loan, not an investment. The loan amount may be based on expected future income but the loan recipient has to repay regrdless of how the future pans out.

make sense?

Right. I'm quite clear that a loan is not an investment.

If an advance is a loan, by your definition, then does that mean a music label is a money lender?

If the band/musician has an obligation to pay back the advance then it's a loan. Let's ignore the future earnings from the music they produce with the label. If the band isn't a success, then they are still obliged to pay back this advance. This means the label is giving the band a loan (called 'advance') - in that regardless of how the band do, they still have to pay back the advance.

My point is that advances are loans. And music labels are not money lenders and, as far as I know, it's illegal for them to loan money. They have to be registered as a money lender before they can do this.

So.. if a band is chased by a music label to pay back their advance... maybe they should just the label to go and fuck themselves.

 

[waterfall]

Thank you Ro. Your understanding concurs with my understanding and you have put it all very clearly.


The "may or may not" is the nub of the matter isn't it? Waterfall seems to be maintaining that this is up to the label as to whether they go after the band or not for this money. This could well be the case (and it obviously depends on the contract) but as I have said already I find it hard to believe that the individuals concerned could end up indebted afterwards if the label do decide to pursue it. If the band is an ongoing concern then sure, the label probably have a case to recoup their investment. But surely you just break up the band and form another one? What's the big problem? You're probably sick of those tossers you've been jamming with for the last few years anyway.

See earlier posts on loan/investment

If a label "invests" they accpet a risk and money can only be gotten if money is made. This is very rare.

Labels "loan" money called an advance based on predicted future money made. A loan needs to be repayed regardless of success.

And you are spot on Hugh, you do just break up the band, but you still have to declare bankrupcy which bears restrictions on the individuals involved in the band. Nothing too bad but you can't start your own business for 5 years I think if you've declared bankrupcy, or you can't be a director in a company of any size. That kinda thing that's not gonna affect people that much. I'm not sure on the details but check the legal concequences of declaring bankrupcy.

You can't keep the band going cos every penny you make goes toward the debt.

 

[Pantone247]

I doubt they would get a tax write-off on losses attributable to their core business.

nah you take the money you "lose" on one band, paying for rehersals, taking them out for lunch, buying them dresses, and minus it from the profit you make on another band and what you're left with is your gross taxable profit

the hope is the money you lose (or say you lose, it's all hard to keep track of) is still a saving on the tax you'd have to pay on your higher profit making bands and if the tax loss band turn out to be a winner too, all the better!

also Ro, I would totally work for your major record label

 

[MDR]

Right. I'm quite clear that a loan is not an investment.

If an advance is a loan, by your definition, then does that mean a music label is a money lender?

If the band/musician has an obligation to pay back the advance then it's a loan. Let's ignore the future earnings from the music they produce with the label. If the band isn't a success, and then they are still obliged to pay back this advance. This means the label is giving the band a loan (called 'advance') - in that regardless of how the band do, they still have to pay back the advance.

My point is that advances are loans. And music labels are not money lenders and, as far as I know, it's illegal for them to loan money. They have to be registered as a money lender before they can do this.

So.. if a band is chased by a music label to pay back their advance... maybe they should just the label to go and fuck themselves.

I would imagine that labels call it an 'advance' to avoid becoming described as lenders, and that they have the necessary legal advice to back this up. Band could tell them to 'foxtrot oscar', but may run into trouble if the label injuncts them to stop them releasing music in future.

 

[MDR]

nah you take the money you "lose" on one band, paying for rehersals, taking them out for lunch, buying them dresses, and minus it from the profit you make on another band and what you're left with is your gross taxable profit

Ok grand. I understand now.

 

[waterfall]

Right. I'm quite clear that a loan is not an investment.

If an advance is a loan, by your definition, then does that mean a music label is a money lender?

If the band/musician has an obligation to pay back the advance then it's a loan. Let's ignore the future earnings from the music they produce with the label. If the band isn't a success, then they are still obliged to pay back this advance. This means the label is giving the band a loan (called 'advance') - in that regardless of how the band do, they still have to pay back the advance.

My point is that advances are loans. And music labels are not money lenders and, as far as I know, it's illegal for them to loan money. They have to be registered as a money lender before they can do this.

So.. if a band is chased by a music label to pay back their advance... maybe they should just the label to go and fuck themselves.

Good point. We're getting technical here but I wouldn't be surprised if the answer to your question was that Labels actually are registered as some form of money lenders.

 

[MDR]

also Ro, I would totally work for your major record label

I got your demo by the way and the accompanying explanatory notes. It seems to be a concept demo about your sexual awakening during the summer where you went from being a virgin to being celibate - am I right?

Also, the bass is too loud, so we'll have to deduct that from your advance.

Otherwise, your image etc is fine.

 

[Pantone247]

I got your demo by the way and the accompanying explanatory notes. It seems to be a concept demo about your sexual awakening during the summer where you went from being a virgin to being celibate - am I right?

Also, the bass is too loud, so we'll have to deduct that from your advance.

Otherwise, your image etc is fine.

aces! do I give you my eight grand now, or later?

 

[classic seanc]

I thought bands generally start a company and are signed under that name, so if they go belly up and go bankrupt, it's the company (band) that owes the money and not the individuals?

Aye, it's what all these "industry minded" bands that waterfall's talking about should be doing.

 

[Space]

Roughly a grand for manafacturing 500 when you add in VAT/printing/delivery etc etc. Could probably do it cheaper by shopping around.

Edit: I've just remembered I run/ran a record label. I'm going after all those fucking bands we put out records by to recoup some money. You know who you all are!

Yeah that's what thought, about two euro a piece roughly speaking. What about the stuff that needs to be done after you have it in hand, pr etc, it's this part I'm not so sure about.

I've noticed alot of american punk bands like nofx, snfu and guys like that have their own publishing entities/companies, presumably this has something to do with the same thing rsj was talking about with the company being a seperate entity for the people in the band.

 

[mr pharmacist!!!!1]

lads i cant keep up.
type slower.

 

[hugh]

Yeah that's what thought, about two euro a piece roughly speaking. What about the stuff that needs to be done after you have it in hand, pr etc, it's this part I'm not so sure about.

That's a bit of a "how long is a piece of string" question isn't it? You can probably spend as much or as little as you like.