Breaking Benjamin Dispute Lays Bare Dirty Laundry Behind The Scenes Of Record Label Deals
from the take-a-look dept
Last month, we posted an excellent video by entertainment attorney Martin F. Frascogna of the Fascogna Entertainment Law firm, deciphering some of the tricks of the trade in a standard recording industry contract, and showing how a band could still end up owing $500,000 even after selling a million albums. Most of that discussion was theoretical, as most record deals are kept confidential. However, due to a legal dispute involving the band Breaking Benjamin, that band’s full contract was filed as part of the court documents in the case (embedded below). We asked Fascogna if he’d like to analyze the actual contract, and he did us one better, and did a full analysis of the lawsuit itself as well. He also created a new video — embedded in the story, about the role of trademark for bands. Enjoy.
Breaking Benjamin?s internal struggle has left the group in shambles. I promise this will only get worse, but, in the interim, the dispute has me mildly wanting more. Chalk this up to the fact that I didn?t know people cared so much about the group, nor did I know they had so many albums out on the market, which is partially the cause of their internal problems to begin with.
Internal disputes are commonplace in the music industry, and honestly I?m thankful — otherwise I would be an unemployed attorney. Call it snooping but I decided to poke around into the vast 98+ page suit/band agreement/and recording contract. It?s a fascinating soap opera. The dispute is filled with villains, heroes, bad actors, flashes of comedic relief, and loads of drama. Before breaking down the intricate legal components, it?s important to first understand the players, potential players, and the significant roles each play.
Benjamin Burnley ? The group?s front man put the entire controversy in motion. Essentially, Burnley was under the impression he fired fellow band members Aaron Fincke and Mark Klepaski. Stated in their Band Agreement, any internal dispute would be handled via arbitration. If you don?t know what this means, arbitration is a method of settling disputes outside of court. This route is extremely common in the music industry because arbitration records typically remain private unlike court documents that can be publicly accessed. Burnley, via his legal counsel Brian Caplan and Jonathan Ross, requests to activate the arbitration clause in the band agreement and demands an award of $250,000. More on the amount later.
Aaron Fincke and Mark Klepaski, through counsel, James Oschal of Rosenn, Jenkins and Greenwald LLP, claim the Band Agreement is null and void therefore making an arbitration clause irrelevant. They request that the Pennsylvania state court hear the case and dismiss the validity of the arbitration clause. At this time, they are not seeking any monetary damages. Believe me that?s coming.
Hollywood Records ? Currently they are a non-factor but I promise they?ll become the star of this dispute in no time. Basically all the label wants is to release the album(s) allegedly agreed upon between the label and band. Sideline this thought for a minute as it will become a significant legal stance later on.
The time frame of events will also prove to be vital in this case.
- January 2009 ? Burnley, Fincke, and Klepaski enter into a Band Agreement.
- March 2010 ? Breaking Benjamin allegedly enter into a Recording Agreement with Hollywood Records.
- March 2010 ? Burnley allegedly communicates to band members, Fincke and Klepaski, along with the band’s attorney, Nick Farrara, that he didn?t want to proceed with the Recording Agreement.
- March 2011 ? Burnley dismisses Fincke and Klepaski from the band.
- June 6 2011 ? Burnley seeks arbitration and a remedy of $250,000 from Fincke and Klepaski.
- DATE UNCLEAR ON COURT DOCUMENTATION ? Fincke and Klepaski request a declaratory judgment from the Pa. State Court.
There three principal legal issues in the dispute:
- Is the Band Agreement valid because the Band Agreement essentially dictates who entered into a contract with Hollywood Records? Meaning ? Did Breaking Benjamin as a collective group OR as Finckle and Klepaski acting as individuals and unauthorized representatives of the band sign the Recording Agreement.
- Who owns the Breaking Benjamin trademark? The trademark dictates how the band proceeds with future recordings.
- What happens to the Hollywood Records Agreement?
- Bonus: Because label haters probably want me to dissect the Recording Agreement into a bloody carcass, due to the cyber-bullying and arm-pulling, I?ll reluctantly do so. However, I warn you that during this time of the legal dispute, the Recording Agreement is somewhat irrelevant as the Band Agreement and the Breaking Benjamin internal drama must unravel first.
THE BAND AGREEMENT:
Every major recording artist has an internal Band Agreement (if they don?t, they should). The agreement dictates how overall band business is handled in times of dispute, fund disbursements, etc. Courts traditionally look no further than the Four Corners Rule, meaning they only look at what?s taking place in the four corners of the legal document (i.e. ? Band Agreement) that the group collectively signed. Sometimes the group?s intentions allude to one conclusion but the actual language interprets otherwise. In the Breaking Benjamin Band Agreement, it?s unmistakably clear that Burnley started the group, is the creative force behind the group and essentially dictates the group?s decisions. Evident in the agreement, Burnley can dismiss a fellow band member for ?just cause.? This is interesting. This type of language is fairly standard in a ?Band Agreement? but not so standard in a ?Partnership Agreement.? These are two different agreements entirely. Some groups operate as a partnership, meaning each active member plays an equal role. For example if the group is made up of four members, each member essentially has a 25% stake and so forth. Here, through legal arguments stated by both sides, they use the language interchangeably ? Band agreement and Partnership agreement. If the document is indeed a Partnership Agreement, this entire dispute could quickly end because Fincke and Klepaski, acting as a majority vote, could enter into band decisions on behalf of the group without Burnley?s authorization. Oddly enough, this legal stance hasn?t been made nor does it appear it?s going to be. The big city attorneys must know something I don?t. Because we?re led to believe the group has entered into a Band Agreement (as opposed to a Partnership Agreement), the contract?s four corners language will run the show.
The contract clearly states that Burnley can dismiss members with ?just cause,? that disputes will be addressed via ?arbitration? and that any ?departed member has no right to ?ID Materials License Terms? nor shall they have the right to utilize the group trademark? as addressed in Section 5. Lastly, ?all decisions must be collectively made,? which makes it clear we?re dealing with a Band Agreement. A Partnership Agreement would allow for a majority vote, not collective. In addition, apparently back when the group was friends, there is some language anticipating Burnley?s poor health and slew of unstable disorders and how it could affect the band?s income stream. For example, the agreement would become invalid should Burnley decease or become disabled prior to any studio album completion. Personally speaking, this is where the drafter of the contract went wrong because they didn?t identify what happens if this clause is activated, rather it just states that the contract becomes null and void.
Because the agreement in place appears to be a Band Agreement (not a Partnership Agreement), (a) no departing member has rights to a trademark, (b) all band decisions must be decided upon by all three members, and (c) Burnley could dismiss members with ?just cause.? Therefore, since all three members agreed to these terms it appears (1) Burnley?s request for arbitration is valid, (2) Breaking Benjamin (as a group) didn?t enter into a Recording Agreement with Hollywood Records because Burnley, allegedly, didn?t agree to the terms, and (3) the dismissed members couldn?t enter into a Recording Agreement on Breaking Benjamin?s behalf because they weren?t authorized to make this decision.
WHAT HAPPENS TO THE TRADEMARK –
Because a band isn?t worth too much money if they don?t have a trademark, who will own the Breaking Benjamin trademark after this entire ordeal? For example, should it be Burnley, he could then hire new band members and continue touring, recording, promoting, etc. under the name Breaking Benjamin. Should it be Fincke and Klepaski, they may/may not be able to hire new members and keep operating under the name Breaking Benjamin without the group founder Benjamin Burnley. Trademark ownership is no joke because depending upon who legally filed for the mark (i.e. ? the name on the registration form with the USPTO) and what the agreements say about the rightful owner(s), somebody will have to stop using the mark. Trademark ownership essentially means leverage and control because whoever owns the mark has both. To explain this further, I’ve created this video, which breaks down why trademark is important to music professionals.
WHAT HAPPENS WITH HOLLYWOOD RECORDS?
The recordings being disputed are (1) a remake of ?Blow Me Away?, and (2) the ?Rarities? project. In order to be granted permission on these additional projects, Hollywood Records would have to secure the authorization of all the active members of Breaking Benjamin. Under this agreement, just as the previous Hollywood Records agreements with the group, Hollywood Records would be granted universal territorial rights with the recording, along with various other legal nuances such as trademark use, etc. Universe? Hollywood Records clearly anticipates a large expansion project. Oddly enough ?universal territorial? rights are somewhat standard, as this got started when some overly cautious attorney was concerned about radio signals being sent out into outer space and who would legally own the music. Yes, I?m serious. Personally, I like to protect my clients throughout the galaxy just in case there is some intergalactic distribution system established during my lifetime, but that?s neither here nor there….
The Hollywood Records contract proves pretty standard for a Recording Agreement. They scream big numbers, make grand promises, etc., all while the actual language of the contract slowly chips away at Breaking Benjamin?s potential income stream.
Just as my earlier video states, you?ll see huge reductions with recording costs (Section 5), Reserves deductions, Advances, etc..
Carefully drafted and tactfully scattered throughout the Recording Agreement, Hollywood has built in an insurance policy to assure they don?t get left out in the cold. Individually, these clauses may not mean a lot but you have to piece them together like a puzzle to see the major effect. The Recording Agreement, much like all major label agreements, has four really sneaky language elements that assures they?ll never get screwed over:
- ?In our reasonable effort?
- ?Unique Services?
- ?Notice must be mailed?
- ?Members will be joint and severally liable?
This doesn?t appear to be alarming on its face, right? Unfortunately all of these statements pack a heavy legal punch. ?In our reasonable efforts? is what?s referred to as cautious language. Let?s decode that statement to find its real meaning – ?we?ll try really really hard (subjectively speaking).? Apply this language to the Hollywood contract and they have essentially agreed to make their best efforts to agree to the terms with Breaking Benjamin. They may not have to fulfill the contract, but they?ll try really really hard. Ouch, this is getting shaky already.
How about ?unique services?? Contractually speaking, Hollywood acknowledges that the band is unique (i.e. ? there is nobody else in the entire universe like them). What a great stroke of ego for a band, but what this means is if the group can?t carry out their contractual obligations due to the fact that they are so ?unique,? the label will be unable to recover from such damages because they can?t find a comparable group which could mitigate the damages. Oh no, this is getting worse.
Perhaps the two silent killers come with the last two clauses. ?Notice must be mailed? means that if a group can?t perform their obligations, they must provide the label with a written notice. Here, based upon their previous contracts with Breaking Benjamin, Hollywood Records could take the stance that they were under the impression they could move forward on additional projects plus they were under the impression based upon Fincke and Klepaski statements that they could do so. Because no formal notice was mailed, no breach occurred. Right? It?s a legal argument, which may play out soon enough. Finally, buried in the contract Hollywood states that each member will be held jointly and severally liable. This means that if one party has done something wrong, they will all be held accountable. This alone will hang the group.
Breaking Benjamin has some tough times ahead. As the courts will likely determine Fincke and Klepaski were rightfully dismissed from the group, that?s also about the time Hollywood Records will come calling with their own suit about Breaking Benjamin. At least that?s what I would do if I worked as counsel for Hollywood. Unfortunately Burnley, Fincke, and Klepaski will have to reunite to defend the case. It?s beside the point who?s a member of Breaking Benjamin and who isn?t at that point, because in Hollywood Record?s eyes, authorization by one member means authorization by all. If Fincke and Klepaski agreed to the project, so did Breaking Benjamin. The group will be sued and then Fincke, Klepaski, and Burnley will once again turn to the Band Agreement to determine who?s paying who.
Filed Under: breaking benjamin, contract, record label
Companies: hollywood records
Comments on “Breaking Benjamin Dispute Lays Bare Dirty Laundry Behind The Scenes Of Record Label Deals”
Who the hell is Breaking Benjamin?
Or are they just breaking my balls?
Re: Who the hell is Breaking Benjamin?
I can not believe you dont know who Breaking Benjamin is. they are only the greatest band that has ever lived. look them up.
Fuck the record labels. The only music I am getting is directly from the bands, otherwise it is pirated.
Wait, so you do want the music the major labels are putting out? Seems to me, the honorable plan of action would be to refrain from giving major labels any of your intention, pirated or otherwise. Otherwise, you sound like a kid who breaks open gumball machines because you think a quarter is too much to ask.
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no, he sounds like a kid that wants a gum ball, but the only widespread seller is the MOB. They use this money to break grandmas’ kneecaps, kill kittens, and kick puppies.
He finds out that these people have a way to make gumballs for minimal cost, and are giving them away. This sounds much better than giving the kitten killing, puppy kicking MOB a quarter.
Now you could argue that refraining from partaking in the gumball would be the high road, but how will they know what I really want a “clean” gumball, and not no gumball if there isn’t interest in gumballs at all.
Anyways, that I think is my first and only attempt at a gumball analogy for this. Most of these fail due to not have a magic machine that takes very little power and make limitless copies of gumballs, but pretend such a device exists.
ben needs to drop the label, seriously…
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I’m a huge fan of the band and I feel like the members atat questions was pushed by the label put out the re mixes and there for should not be the ones to get the finger pointed at. It should be the label and I think breaking benjami should make up and get back to what they do best. Making kick ass rock music
BREAKING BENJAMIN FAN FOR LIFE!
THANK YOU FOR SAYING IT. I wholeheartedly agree with you.
The record companies are unnecessary in this internet age.
all you need is a basement studio and an internet connection (and some band members, obviously) and you can create and upload you music directly to the consumer.
This is interesting, and I haven’t finished reading the materials, but I’m wondering what your legal basis is for making the distinction between a “Band Agreement” and a “Partnership Agreement” is.
Obviously, whether they are actually a common law partnership might be important, but even if that’s the case it would seem the terms of the agreement on, e.g., how decisions are made would control (that said, I know nothing of PA partnership law).
Breaking Benjamin has been one of my favorite bands over the last decade or so.
Re: This sucks...
I totally agree with you. they are the best band around. But hopefully Ben will come out on top.
“because in Hollywood Record?s eyes, authorization by one member means authorization by all. “
That may be so in Hollywood Record’s eyes, but not necessarily the eyes of the law. If Hollywood Records either knew of the band agreement (i.e., that all decisions had to be made collectively), and/or should have known, then there’s no apparent authority for two members to bind any other members or the band as a whole (under typical common law agenrules; maybe PA is different).
And if Benjamin objected before Hollywood sold the albums, they “should have known” there was no agreement.
I agree. If the band agreement states that Burnley alone has the authority to make all decisions for the band, then the other two had no right to sign the contract in the first place? seems pretty cut and dry to me, the contract between hollywood and the band is null and void because Fincke and Klepaski are not authorized to sign contracts on behalf of Breaking Benjamin.
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Well, it gets a little trickier if Hollywood Records had reason to believe Fincke and Klepaski could sign on behalf of the band, especially if Burnley did nothing to dispel that notion (or even encouraged it).
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hang on your saying that if Fincke and Klepaski had no legal capacity to enter into the contract then Hollywood Records can still state that the contract is binding?
The only thing tricky about it would be Hollywood trying to get damages (if they can) off someone.
To me Fincke and Klepaski had under the stated Band agreement no Legal capacity whatsoever to enter into any contract without the agreement of Burnley. In fact Fincke and Klepaski had knowledge of this and it could be construed that they therefore only gave an illusory promise/consideration to Hollywood Records.
In fact if they did enter into an agreement knowingly without legal authority that is absolutely ‘just cause’ to remove them from the band and seek damages.
The contract as it stands with Hollywood should be voidable though, especially since Burnley states he did not want to enter into it at time of creation. Though Hollywood might have an actionable claim against Fincke and Klepaski for misrepresentation.
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“hang on your saying that if Fincke and Klepaski had no legal capacity to enter into the contract then Hollywood Records can still state that the contract is binding?”
Not exactly. I’m saying that if Burnley knew they were doing so and stayed silent, the actions of all involved may have had “legal capacity” to bind Burnley.
It’s been awhile since I looked into “apparent authority” law, but that’s my recollection.
You just don’t get it Mike. Obviously we need stronger laws to prevent piracy, scratch that, THEFT to protect artists or future bands might end up owing record companies even more money after selling millions of albums.
Just to point out that it wasn’t Mike who wrote the article.
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I know. I was attempting to parody other posts that sometimes show up in the comment sections. Assuming Mike is the author is a common trope in the troll posts in these parts.
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You missed the word ‘freetard’ and the fact that it is Friday. I give you a C+ for the troll, merely because you did blame Mike when it was a different author.
You’ll never be an all-star troll with material like that though. The ‘scratch that’ part gave you away.
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It counts as trolling if I was shooting for laughs?
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Bad trolling isn’t funny.
Mike, I think you have to be careful when reading the Hollywood records agreement, particularly the term “BANDS” or “BAND”. What constitutes BAND would be defined at the top of the contract, and does not always directly relate to any existing band agreement that might be out there.
Further, because the contract is written not only to the band but creates the old jointly and severally language, and provides for 3 signature areas for the band members, it would appear that each of the members entered into the agreement not only as the BAND but as individuals as well.
As the piece points out, the questions would be what the band agreement does or does not do. While it binds them to work together, does that mean that all decisions must be unanimous, or can a simple majority bind all players?
There is a lot here, most of it not to do with label contracts (and it’s content) but rather a more simple question of who signed each document, and if less than 100% of the band members signing the agreement is still binding.
There might also be the question of good faith, that if Burnley didn’t want the agreement, he should have moved expeditiously (that word is popular today!) to have it quashed. He should have clearly contacted the label as well as the other band members, it appears he only contacted the other band members (and moved to dismiss them from the band).
With the info presented here, it looks like he may not have taken clear enough steps. But I am almost certain that plenty of communication is not being documented.
Cripes this post is depressing. Interesting, but depressing. Seems like lambs being led to the slaughter when a band signs a deal. Seems like no matter what way they went, it would have turned into one giant legal clusterf**k.
It’s really sad that to play ball in the “traditional” music industry, you can’t even strum a chord without having a gaggle of lawyers at your beck and call. Good for the lawyers, bad for everyone else.
It also kind of dashes the common argument from some copyright extremists that artists aren’t supposed to have to be businesspersons, figuring out what models work well for them, etc. Since they’re supposed to just be artists, busily creating and performing.
No matter what, they DO need to be business savvy, or have someone trustworthy to be savvy on their behalf.
As Dave Barry would say, Breaking Benjamin Franklin would make a great name for a rock band. But that would have been illegal. Instead they had to go for a shorter crappier name version. This is what’s wrong with intellectual property!
Why would that have been illegal?
Am I the only one who thinks its funny that, thanks to the RIAA, Breaking Benjamin is broke (or at least in the hole for $500k)?
Wait, what did the RIAA do?
Breaking Benjamin Dispute Lays Bare Dirty Laundry Behind The Scenes Of Record Label Deals
i run an indie –
The number of lawyers, artists and managers who bleat about how unfair the majors are is unbelievable.
most of these bands/managers/lawyers are sooo desperate to sign to majors and don’t even check out what the indies have to offer. Our deals are definitely fair.
we need to earn a living. If a band does a deal with us and takes our $ then they have to live up to their part of the bargain.
Quite a bummer, they’re a very good band, my favorite. I but I do feel that Ben is very controlling, I mean, he fired everyone that made up the original band, for foolish reasons. He probably got bored with them, so he fired them. Maybe all those cigarettes finally fucked his brain, cause he’s a little crazy right now. But I do hope things settle down, and he gets back to doing his thing
It wasn’t the cigarettes, it was the alcohol. And honestly, alcoholism really is not something to joke about or to poke fun at. It is due to a genetic predisposition and is something that cannot be helped. Ben Burnley is not “crazy.” Rather, he has suffered neurological damage due to a detrimental habit that he had very little control over. Those who suffer from addictions do not choose continue them. It is much more accurate to say that they become imprisoned by them. This man is more deserving of sympathy than of scorn. Have a heart.
ALL WE NEED HERE IS A BIT OF NEGOTIATION AND UNDERSTANDING!
Over my career I have negotiated hundreds of millions of dollars worth of shopping center leases, land contracts and commercial property sales. The key to all successful deals is that all sides are content and happy with the deal. First, the three parties need to look at the positive side and all arguments aside, look within and decide what each wants to be happy. Second, Consider what key components made BREAKING BENJAMIN successful in the first place and if all three cannot get back together, then replace what is missing (the VAN HALEN – DAVID LEE ROTH syndrome). Third, Atlantic would probably have a positive cash flowing popular group than a lawsuit and the surviving group should sit down and renegotiate a deal fair to all parties concerned.
To spend the next 5 – 10 years arguing is the WRONG MOVE and will only just magnify the losses.
Where are they now?
well now it’s 2012 and it’s been a quiet year…we have heard nothing from the band…just recently i heard on the radio that the band will have new material out by the end of the year..no word yet on whether or not Ben has hired other members…but recently on my breaking benjamin fan page on facebook, fans are eager to hear news on BB…fans dont care about the legal battles but they do care about if the band will recontinue with their music careers…
lol ur fuckin retarded
Just wanted to say thank you to the author of this page. It was well written and very informative. Hope Ben starts playing again soon
Man thats crazy, who knew this would explode like this?? This sucks they couldn’t have worked something out, I mean why’d the guys think they could make decisions without Ben? I could go on & on but anyways I’m with cm, I hope to see Ben doing something soon, he’s such an amazing musician/singer/writer. I miss BB so much, they’re one of my favorite bands ever!!!!!!! :'(
First of all if I were Ben I’d sue also, considering the Valora mix was done without his consent; which sucked ass. But at the same time, no one is benefiting from this, except for the ambulance chasing lawyers. throw them a bone Ben,and move on. I anticipate your stories and voice. Fuck em.
Wow, I never thought that so much would be going on behind the scenes… I always wondered what the actual state of the band was, so thanks a lot for this very well written article that explained the things in such detail. These are sure tough times for Benjamin and the rest of the band, but I hope they will make it through somehow. And also I hope they switch to another label and study the contract better this time.
Ben won the lawsuit. Finally, some good news! He needs a full band now :/
It’s such a shame that it came this, does anyone know why Benjamin kicked the other two guys out the band?