Template Agreement for buying, sharing and splitting cost of PA - has anyone got one I could use?

[Gasman]

Our guitarist has just got as a deal on a new Bose PA - he has paid for it all, so the rest of us have agreed to reimburse him by paying him 20% each (5 piece outfit)- equal shares.

 

I would like us all to sign up to an agreement that states specifically what happens when members leave and new ones join, repair costs, and divvying up the proceeds if we split and sell it.

 

Has anyone got a template agreement that they would share with me?

 

Here's hoping!

 

 

[Dan Dare]

This is a tricky issue. Agreeing used values, depreciation and how much someone leaving will get back, etc is a minefield. I'd suggest it's better for members to buy different parts of the PA as individuals. You can normally divide things roughly equally (not exactly, but close enough). One owns the mixer, two others the FOH (a side each), another the monitors and so on. Anyone leaving takes their own part(s) with them to sell or re-use as they choose. Anyone joining then has to replace the item(s) the leaver took with them and owns the replacement(s). The band/joiner is free to offer to buy it from them if a price that suits everyone can be agreed.

 

Repairs due to fair wear and tear would normally be equally split, but that depends on circumstances. If someone drops the mixing desk down their stairs at home or their kids jump on it and break it, it isn't reasonable to expect the others to pay, for example. As I said, tricky.

[Burns-bass]

This is a massive minefield.

 

When we started my band, the lovely (and sadly missed) York5stringer sold us a PA at an incredible price. (Such a lovely lovely man). 
 

In essence I loaned the band the money and it paid it back. This was much easier than the arrangement you’re talking about.

 

The agreement we had in the band is that we’d pay me back through gig funds (which we have done) and now its wholly owned by the band.

 

I’ve relinquished ownership of it and if I leave the band it belongs to the band, not me.

 

In our case, we all chipped in £20 from each gig to pay it back and it was done within a few months.

 

It’s going to be impossible to split a PA into shares and unreasonable to expect someone to pay to join a band. I’d consider what we did as an option. Buying individual bits sort of makes sense, but the PA’s value is as a whole system.

 

If a band member demanded payment from me I’d be quite upset.

 

 

 

 

Edited July 13, 2023 by Burns-bass

[spacecowboy]

My band is currently doing this, our approach is we all chip in and then the band owns the PA not one individual. If I left the band I’d have no claim to it. 
 

Our plan is to eventually pay ourselves back through gigs at which point we’ll all be happy… but probably looking to invest in more gear!

 

We also want to buy an IEM system but PA first 😀

[Dan Dare]

4 hours ago, Burns-bass said:

It’s going to be impossible to split a PA into shares and unreasonable to expect someone to pay to join a band. I’d consider what we did as an option. Buying individual bits sort of makes sense, but the PA’s value is as a whole system.

 

If a band member demanded payment from me I’d be quite upset.

 

I appreciate your points. However, it isn't impossible to split a PA into (roughly, but obviously not exact) equal shares. I've done it before, or rather a band I was in did. We did it in the way I described above. Obviously, you don't all go and buy a disparate/ill-matched pile of equipment and hope it works. You agree on the system you want and then purchase it between you, dividing the cost as equitably as is possible commensurate with owning parts of it individually.

 

That's what we did. Some (I and one other) spent a little more than others, but it didn't bother me (or him), because I owned something of higher value which was mine to do as I wished with if/when I left, as did he.

 

Why would you be upset if a band member "demanded payment" from you and why is it unreasonable to expect someone to pay to join a band.? You did, in effect, demand payment from the other members of the band when you fronted the cost of buying the PA you describe and they repaid you. To be clear, I think that was entirely reasonable of you and would have done the same in your position.

 

Surely it depends on the circumstances. In the case of bands that work occasionally and don't earn a great deal, they are unlikely to be spending .serious money on PA, lights, etc. £20 a head each for a few months is no great loss. However, in a situation where you are offered a place in a successful working outfit which has significant jointly-owned assets, is it right to expect to benefit from something the others have paid for without making a contribution? Perhaps so if you are happy to be paid a wage, but if you want an equal share in the profits of the venture, it's right that you should make the same investment as the others have.

 

If you join a company as an employee, you will earn a wage/salary, but if you wish to be a full partner and earn the same as the other partners/business owners, shouldn't you be prepared to invest in the venture to the same extent as them?

[Downunderwonder]

Where it gets messy is when the front mouth goes off doing solo/duo stuff with the band's PA.

[TimR]

It's a sunk cost.

 

I'd suggest you include something like an independent valuation when a member leaves. And then the remaining 4 members of the band then pay him 1/4 of 1/5 of what it's worth and so on. 

 

 

So

1/4 of 1/5 when 1st leaves (4 original members left)

1/3 of 1/4 when 2nd leaves (3 original members left)

1/2 of 1/3 when 3rd leaves (2 original members left)

Split when last original leaves. 

 

If at any point the new member is happy to pay the share it's all good.

 

If the band completely folds the PA gets sold (either to a 3rd party, or a present memeber) and the money split equally.

 

You should work out what happens if the remaining members of the band can't afford to pay for the fraction of the leaving member outright. Like pay back the money gradually over an agreed timescale. 

 

You must agree at the outset to have an independent valuation, and everyone needs to be aware the gear depreciates and they're getting benefit of its use in return. Members can't expect to get their original money back. 

 

Splitting a PA into 5 chunks makes it worthless to all 5 of you.

[police squad]

similar to buying a van, lights etc.

A bit of a mine field isn't it.

I am lucky in that I own a quality QSC full system. But as a singer, shouldn't I have a decent PA?

[TimR]

I own a PA. I got fed up in my 30s with all the moaning and worries about who pays for what. I then 'hired' the PA to the band for high paying gigs. I don't think it ever paid for itself and it never settled the arguments as 'the band must have paid for it by now and should be getting it for free' started in the end (in hindsight and now I'm older I realise they stemmed form the drummers control of the band more than anything PA related). 

 

Then I bought lights. And they still complained. 😆

 

He is in another band and owns his own lights and PA and has learned what a pain being the one looking after it all is. And us presumably 'charging' the band for its use. 

[TimR]

Don't forget someone will have to be responsible for looking after it and running repairs, new cables, replacement mics will all cost.

[Burns-bass]

9 hours ago, Dan Dare said:

 

I appreciate your points. However, it isn't impossible to split a PA into (roughly, but obviously not exact) equal shares. I've done it before, or rather a band I was in did. We did it in the way I described above. Obviously, you don't all go and buy a disparate/ill-matched pile of equipment and hope it works. You agree on the system you want and then purchase it between you, dividing the cost as equitably as is possible commensurate with owning parts of it individually.

 

That's what we did. Some (I and one other) spent a little more than others, but it didn't bother me (or him), because I owned something of higher value which was mine to do as I wished with if/when I left, as did he.

 

Why would you be upset if a band member "demanded payment" from you and why is it unreasonable to expect someone to pay to join a band.? You did, in effect, demand payment from the other members of the band when you fronted the cost of buying the PA you describe and they repaid you. To be clear, I think that was entirely reasonable of you and would have done the same in your position.

 

Surely it depends on the circumstances. In the case of bands that work occasionally and don't earn a great deal, they are unlikely to be spending .serious money on PA, lights, etc. £20 a head each for a few months is no great loss. However, in a situation where you are offered a place in a successful working outfit which has significant jointly-owned assets, is it right to expect to benefit from something the others have paid for without making a contribution? Perhaps so if you are happy to be paid a wage, but if you want an equal share in the profits of the venture, it's right that you should make the same investment as the others have.

 

If you join a company as an employee, you will earn a wage/salary, but if you wish to be a full partner and earn the same as the other partners/business owners, shouldn't you be prepared to invest in the venture to the same extent as them?

Tim’s got this bang on. Splitting it into 5 makes no sense. And paying to join a band? Absolutely insane.
 

If the band is successful enough to generate a substantial income, you can set it up as a business. We did this when I was in a signed band. We actually took out a loan to pay for assets and recording and paid back from profits. There was no requirement for a new member to pay us. 

 

Also, you have to consider what happens if you treat it as a business. Do you all contribute equally?

 

The person driving the van, booking the gigs, storing the PA and managing the social media can all legitimately state they’re doing more. Do they earn more?

 

Socialism may not work in the real world, but the principles apply here. 

 

 

[Burns-bass]

2 minutes ago, TimR said:

Don't forget someone will have to be responsible for looking after it and running repairs, new cables, replacement mics will all cost.

Don’t forget storage…

[Burns-bass]

4 minutes ago, TimR said:

I own a PA. I got fed up in my 30s with all the moaning and worries about who pays for what. I then 'hired' the PA to the band for high paying gigs. I don't think it ever paid for itself and it never settled the arguments as 'the band must have paid for it by now and should be getting it for free' started in the end (in hindsight and now I'm older I realise they stemmed form the drummers control of the band more than anything PA related). 

 

Then I bought lights. And they still complained. 😆

 

He is in another band and owns his own lights and PA and has learned what a pain being the one looking after it all is. And us presumably 'charging' the band for its use. 

I had this in one band. They expected the singer to pay, operate, and maintain a PA. 

[Greg Edwards69]

Totally agree with TimR and also agree that expecting a new member to pay for stuff when they join is insane, especially for a weekend warrior band. I simply wouldn't join a band if I was expected to stump up a few hundred quid or buy a replacement part of the PA because the old member took it.

 

Not to mention that different band members' financial situations vary wildly. What is a minor expense to one person, is food for the week for another.

 

It's also worth mentioning, that in many bands, the shared equipment is evolving, and upgraded when needed. As such, I suggest making it clear shared equipment is a "Band purchase".

 

• Split the cost evenly between the existing band members.
• If someone quits then the rest of the band pay them market rate for their share.
• If a new person joins, they don't pay until the band decides to get new equipment.

There are exceptions to this, of course. But they need to be decided on a case by case basis. 

 

For example, we're lucky enough to have a soundman who owns the PA - the father of one of the guitarists. What he buys and how much he spends is up to him, same as how much I spend on a bass or amp. As such he gets an equal cut of gig money.

 

But we're in the process of upgrading our IEM system to the Xvive U4.  But the drummer doesn't need wireless, and can use a far cheaper wired solution. So it's only fair that the members who want to use the wireless system buy their own receivers. Easy.

[Woodinblack]

Wouldn't work for me - I have the PA, and I have a couple of basic lights as the band had none. They are mine, if I leave then they come with me. I dont' get any money from it, but I never asked for any. If they wanted to update anything they are welcome to, but I am not paying for it. At the moment I woudl just be happy if the guitarist bought the leads he needed to plug his equipment in, let alone anything else.

Certainly when it comes down to IEM and stuff like that, that is a personal purchase, I have mine, if others want theirs they can buy it just like their instruments or something (unless it was a shared block, but I can't imagine that ever happening).

[Gasman]

Thank you for all your input - very helpful. Please keep it coming, I have to put a suggestion to the others in the band tomorrow...

[jrixn1]

+1 for the "band as a business" model.

 

When running a working band there will always be expenses - not just this PA purchase today, but PA maintenance, lights, storage, insurance, van hire/lease, publicity photos/videos, website, etc.

 

Instead of doing "musician's fee = band fee ÷ number of musicians", conceive "the band" as its own entity, and paying musicians as just one of the many costs it has of doing business.  Suppose the band does 25 gigs per year at an average of £1k/gig - total income £25k.  Add up all the annual costs (PA, van, etc) - say it comes to £5k.  So there's £20k left to pay musicians: so the fee is £160 each per gig.  This approach might sound more complicated to get going, but it's more sustainable in the long term, fairer, and scalable.
 

 

Edited July 14, 2023 by jrixn1

[Steve Browning]

I think a lot depends on circumstances. I have been in both situations.

 

In one, we gigged a lot and we had a bank account and borrowed money to do a recording. We operated on a monthly basis and took out a set amount for all rehearsals and gigs (yes, we got paid to rehearse!). At the end of each month we deducted all the expenses and shared out the months profit. This happened each month. We even had a leased van as well. It worked fine because we had the income to cover it.

 

Now, I own the van, pa and lights. I bought them because (at the time) I was in a position to. I don't charge the band anything for their use, but that's my choice. It's a lot easier and there is no dispute. The other guys use their mics etc. I use the rig for other things I do and I let them use bits if they want something for another gig they have.

 

Having a bunch of people who are good friends share cost is fine but difficulties are almost bound to arise somewhere down the line and what happens if you want to sack someone? As already said, this could be a minefield. Kramer vs Kramer started out as a happy story!!

[Dan Dare]

2 hours ago, Burns-bass said:

Tim’s got this bang on. Splitting it into 5 makes no sense. And paying to join a band? Absolutely insane.
 

If the band is successful enough to generate a substantial income, you can set it up as a business. We did this when I was in a signed band. We actually took out a loan to pay for assets and recording and paid back from profits. There was no requirement for a new member to pay us. 

 

Also, you have to consider what happens if you treat it as a business. Do you all contribute equally?

 

The person driving the van, booking the gigs, storing the PA and managing the social media can all legitimately state they’re doing more. Do they earn more?

 

Socialism may not work in the real world, but the principles apply here. 

 

 

 

A PA is not a discreet whole. It's a collection of components - mixer, FOH, monitors, etc. Splitting it isn't akin to buying something like a vehicle jointly, where it would be impractical for one to own the engine, one the bodywork, etc because it operates as a whole and cannot easily be divided. I have just upgraded my mixer. It still works with the rest on my gear.

 

As far as storage, transport etc of the PA is concerned, if individuals own parts of it, they are responsible for that with the parts they own. It also solves the issue of one person using the PA for their own benefit, because nobody has the complete rig (they are free to negotiate with others to borrow/hire the rest of it if they wish).

 

If a PA is a small, main vocal only rig, it seems reasonable to expect the singer to provide and maintain it.

 

In a situation where someone joins an established band with jointly owned assets - PA, lights, etc - it may not be appropriate for them to be charged a "joining fee". However, I would consider it reasonable, were I in that situation, to be asked to contribute over time out of my gig fees in order to put me on a par with those who have done similarly, with the amount to be negotiated. This is especially the case if the band has bought out a previous member's share of jointly owned assets.

 

These days, I own a PA and charge a fee for its use to bands I play with. They are free not to use it and hire if they choose, but in practice, I'm a lot cheaper than doing that, so the situation never arises. I have to arrive early, set up, mix and then tear down and take it home afterwards, I do more work and have invested a significant amount in my system, so I should see a return on that. If it's a fun gig with friends, I don't charge, of course, but I do appreciate their buying me a pint (which won't break them - I'll be driving, so two is the absolute limit).

 

Socialism is great for those who put in less than others and not so good for those who put in more...

 

 

[Dan Dare]

2 hours ago, Greg Edwards69 said:

For example, we're lucky enough to have a soundman who owns the PA - the father of one of the guitarists. What he buys and how much he spends is up to him, same as how much I spend on a bass or amp. As such he gets an equal cut of gig money.

 

Handy if you can rely on the Bank of Dad (yours or someone else's) to insulate you from financial reality, but not universally applicable. As for "What he buys and how much he spends" being "up to him", I doubt you would be happy if he decided to turn up with gear he paid £150 for in Cash Converters...

 

The PA is not equivalent to your bass amp. Only you use that, but everyone relies on the PA.

Edited July 14, 2023 by Dan Dare

[TimR]

43 minutes ago, Dan Dare said:

A PA is not a discreet whole. It's a collection of components - mixer, FOH, monitors, etc. Splitting it isn't akin to buying something like a vehicle jointly, where it would be impractical for one to own the engine, one the bodywork, etc because it operates as a whole and cannot easily be divided. I have just upgraded my mixer. It still works with the rest on my gear.

 

If one member leaves and takes one of the speakers... or the mixer...

 

The PA will no longer work. 

[Dad3353]

For more decades than I wish to relate, I've always been the one to own, outright, the PA, lights, van etc for the bands I've been a member of. Any band mates (and others, if they're trustworthy...) can use any of the stuff if they want, if I/we are not using it. I charge nothing to anyone for any of this (it's all been paid for long ago...), and am beholden to no-one, and am free to do as I think fit. All my own drums, naturally, but I've also a wide selection of basses and bass amps, guitars and guitar amps (some of which are currently out on long-term loan to friends...). I've never been rich (obviously...) and have worked (in modest jobs that I liked...) to feed the family and acquire the gear I wanted. I don't feel that there have been any sacrifices, and I've never been betrayed in my open trust in others (except that one time when Laurent returned my bass drum having cut a 'port' of sorts in the resonant head; I was not pleased...). Karma..? I'll see about that later, when I'm old. Life can be so simple when one avoids complicating it (or maybe I've just always been lucky...). 

[PaulWarning]

3 hours ago, Greg Edwards69 said:

 

 

• Split the cost evenly between the existing band members.
• If someone quits then the rest of the band pay them market rate for their share.
• If a new person joins, they don't pay until the band decides to get new equipment.

 

this is exactly how it worked for the band I'm in, after 2 members left we agreed a value for the PA and me and the singer paid them for their share,  any repairs come out of band funds, of course in relies on people being reasonable about it, some folk aren't

 

[lemmywinks]

19 hours ago, Dan Dare said:

I'd suggest it's better for members to buy different parts of the PA as individuals. You can normally divide things roughly equally (not exactly, but close enough). One owns the mixer, two others the FOH (a side each), another the monitors and so on.

 

 

This is the best way IMO, I've done a few PA shares where members leave and want buying out which can be a PITA. At the moment we have the big items owned by different members, only the XR18 is group bought between 5 of us so an easy buyout if someone leaves.

[Dan Dare]

1 hour ago, TimR said:

 

If one member leaves and takes one of the speakers... or the mixer...

 

The PA will no longer work. 

 

Really? Replace the missing part with another of the same type and I rather think it will.