How Joint Venture Was Developed for Touring Bands

This year, three bands boarded a vintage train for a tour through the American Southwest, performing concerts in five cities beginning in Oakland, CA, and ending in New Orleans. The bands ' Mumford & Sons, Edward Sharpe & The Magnetic Zeros and Old Crow Medicine Show ' formed a joint venture to manage their Railroad Revival Tour and control revenues and related intellectual property, including a documentary DVD. Matthew V. Wilson, an associate at Atlanta, GA's Arnall Golden Gregory who structured the deal, describes the arrangement in the following interview.

Q: What kind of deals have you handled before for music groups?

A: I am a general corporate lawyer for the most part, but have been involved in various entertainment deals through other lawyers at my firm, most of which have been on the local front. Everything from venue-type contracts with artists, booking bands from the venue standpoint, to publishing deals from the artists' standpoint and contracts between managers and/or promoters and their respective venues and/or bands. This is the first national-in-scope deal I've been involved in.

Q: How did you get in touch with these bands?

A: One of the bands, their business manager, is a colleague of mine, and he brought me into the deal.

Q: Your job was to create a joint venture for these three bands. What was the purpose of this venture?

A: It really kind of captured the collectively collaborative spirit they envisioned looking at the tour from the start of it. ' That was how they envisioned approaching the tour, planning the tour and taking from the tour in terms of monetary proceeds and intellectual property rights. They came in with the intention of being equal partners, and that's what we did. We formed an entity, an LLC, where each of the individual bands was a member, or shareholder. And then, from the operating standpoint, they agreed to share all the proceeds equally; agreed that any intellectual property that was created during the course of the tour ' [e.g.,] songs written collaboratively while on the train by the separate members ' would be owned by the collective unit rather than the individual bands. They determined everything would be shared on an equal basis.

Q: How is this different from how most tours are structured?

A: The traditional model for a music festival is to have a promoter ' or group of promoters ' who decides to put on the show ' and select[s] and hire[s] the talent and sells the tickets. After recovering their bottom line, the promoters walk away with whatever revenues are left.

In this situation, the bands wore all those hats. There were some national production groups and/or promoters that were involved with the specific concerts. But from a planning standpoint, the touring company, governed by the band's managers, the de facto board of directors, made the logistical planning of the tour ' running the train, selecting caterers, bringing a documentary film crew and ' agreeing to share whatever intellectual property rights were created, how those rights would be used going forward and who would benefit from the proceeds generated from those rights.

Q: So with this venture, the bands could recoup more of the tour's revenues, rather than having a national promoter take some off the top, right?

A: It was to give the bands more control of how the tour was run, and also give the bands the majority of the benefit from the tour ' everything from the good will associated with the name Revival Tour that was generated because this was the first one. These three bands had a large hand in creating any good will associated with the name. Whatever film footage was taken of them, either on stage or on the train or outside the train ' all of those various aspects were decided upon early on ' [and the bands] would have equal say in how it's used going forward ' whether they participated in future tours or whether they decide not to.

Q: Are you seeing any other bands interested in this type of venture?

A: I think it is something that could catch on.

This year, three bands boarded a vintage train for a tour through the American Southwest, performing concerts in five cities beginning in Oakland, CA, and ending in New Orleans. The bands ' Mumford & Sons, Edward Sharpe & The Magnetic Zeros and Old Crow Medicine Show ' formed a joint venture to manage their Railroad Revival Tour and control revenues and related intellectual property, including a documentary DVD. Matthew V. Wilson, an associate at Atlanta, GA's Arnall Golden Gregory who structured the deal, describes the arrangement in the following interview.

Q: What kind of deals have you handled before for music groups?

A: I am a general corporate lawyer for the most part, but have been involved in various entertainment deals through other lawyers at my firm, most of which have been on the local front. Everything from venue-type contracts with artists, booking bands from the venue standpoint, to publishing deals from the artists' standpoint and contracts between managers and/or promoters and their respective venues and/or bands. This is the first national-in-scope deal I've been involved in.

Q: How did you get in touch with these bands?

A: One of the bands, their business manager, is a colleague of mine, and he brought me into the deal.

Q: Your job was to create a joint venture for these three bands. What was the purpose of this venture?

A: It really kind of captured the collectively collaborative spirit they envisioned looking at the tour from the start of it. ' That was how they envisioned approaching the tour, planning the tour and taking from the tour in terms of monetary proceeds and intellectual property rights. They came in with the intention of being equal partners, and that's what we did. We formed an entity, an LLC, where each of the individual bands was a member, or shareholder. And then, from the operating standpoint, they agreed to share all the proceeds equally; agreed that any intellectual property that was created during the course of the tour ' [e.g.,] songs written collaboratively while on the train by the separate members ' would be owned by the collective unit rather than the individual bands. They determined everything would be shared on an equal basis.

Q: How is this different from how most tours are structured?

A: The traditional model for a music festival is to have a promoter ' or group of promoters ' who decides to put on the show ' and select[s] and hire[s] the talent and sells the tickets. After recovering their bottom line, the promoters walk away with whatever revenues are left.

In this situation, the bands wore all those hats. There were some national production groups and/or promoters that were involved with the specific concerts. But from a planning standpoint, the touring company, governed by the band's managers, the de facto board of directors, made the logistical planning of the tour ' running the train, selecting caterers, bringing a documentary film crew and ' agreeing to share whatever intellectual property rights were created, how those rights would be used going forward and who would benefit from the proceeds generated from those rights.

Q: So with this venture, the bands could recoup more of the tour's revenues, rather than having a national promoter take some off the top, right?

A: It was to give the bands more control of how the tour was run, and also give the bands the majority of the benefit from the tour ' everything from the good will associated with the name Revival Tour that was generated because this was the first one. These three bands had a large hand in creating any good will associated with the name. Whatever film footage was taken of them, either on stage or on the train or outside the train ' all of those various aspects were decided upon early on ' [and the bands] would have equal say in how it's used going forward ' whether they participated in future tours or whether they decide not to.

Q: Are you seeing any other bands interested in this type of venture?

A: I think it is something that could catch on.