Many of us dream about making a living from doing music full-time. We asked some of the top names in the business what it takes to pay the bills with the bass. Be sure to also check out our accompanying feature on producer Mike Elizondo and Dave Pomeroy's piece on the Musician's Union.
“COMMERCE RUINS ART.” That very old, un-credited sentiment can be applied to any contemporary art form. In the case of music, it could refer to the preference of major labels to clone a rival’s successful artist at the expense (pun intended) of signing and developing their own original talent. But high ideals aside, for us present-day bassists a more realistic statement might be, “Lack of commerce greatly hinders artistic pursuits.” Like it or not, it takes coin to coexist with and create on your instrument. Moreover, the road to those riches requires not only a branching out of your musical skills but an ample understanding of the business side of, well, “the business.” True, the two disciplines have traditionally engaged in an oil-and-water-type blend, but look at it this way: On your local scene, likely the more financially secure figures are bandleaders, club owners, contractors, band bookers, and agents. Are they the most musically talented? Usually not. So what does that say about your potential if you can add some of their business acumen to your artistic gifts? Fortunately, there are more successful businessmen/bassist role models than ever. We reached out to a cross-section of these corporate-savvy sorts to see how they navigated the oily waters and for their advice on our best paths. So stop playing for a moment and take notes.
DUFF McKAGAN ON FINANCE
Duff McKagan has learned every hard lesson rock & roll has to offer, only to come back a stronger person, musician, and businessman. So when he launched his finance column for Playboy with the words, “Existence is a comfort zone for most musicians,” it comes from firsthand experience. He laughs, “I grew up one of eight kids, with a fireman dad; we didn’t know anything about money. When I got my first big check from Guns N’ Roses for like 80 grand, I was terrified of it!” He continues, “What even the more fortunate musicians have to realize is your peak earning years will be brief—one record, maybe two, before it starts to fall off. So you have to plan for a short career and invest wisely, knowing you’ll be playing for pizza after that.” As for the rest of us? “The best move for the average musician, if they haven’t done so already, is to immediately set up a portfolio consisting of stocks and bonds, as well as a retirement account. A basic formula is, if you’re 30, have 30% of your portfolio in tax-free bonds and have 70% in the market. As you get older, keep pruning back the amount in the market—at age 50 your portfolio should be split equally between the two. Personally, I’m a slowgrowth, wealth-preservation guy. I have 40% of my money in blue chip stocks, 15% in high-risk, and another 15% in medium-risk. Take an interest in the market and educate yourself, and investigate retirement accounts for self-employed individuals, which most musicians are.”
One advantage McKagan feels he’s had is always being in bands that play original music. “I’ve never been a working sideman having to find gigs and play cover songs. If you can establish yourself as a partner and co-writer in a band and start your own publishing company that’s the best way to make major money, if it comes. As a nonwriter, you’ll get some performance royalties, but nothing like a writer’s share. When you write as a band, the only trick is to figure out how to split the writing credits. In my band Loaded we have a formula: everyone gets 5% of each song to begin with, and the main writer gets 40%; then we figure out the remaining 40% based on who contributed more in each song.” As for the question of signing with a label or financing your own CD, Duff cautions, “First of all, as a band, you really have to look under all the rocks—licensing, T-shirt sales, and so on—because nobody is selling records like they used to, not even close. The Presidents Of The United States Of America really set the tone when they made a record for five grand and it sold five million copies! So they kept the lion’s share of the per-record sales, and that woke everyone else up. If you’re a smaller, indie-type band, doing it on your own is probably the way to go.” He concludes, “It’s rough out there, but I have a strong sense that younger musicians are a lot smarter than I was, and that’s a real positive.”
HAROLD GOODE ON INCORPORATING
When it comes to bass players, Marcus Miller is about as good a business model as you’ll find. Miller’s Hannibal LLC has separate subsidiaries for his film scoring, record production, touring, and solo projects (his 3 Deuces label has regional distribution with JVC in Japan, Dreyfus Jazz in Europe, and Concord in the U.S.). The man behind the Miller corporate conglomerate is Harold Goode, Marcus’ business partner, investor, and Executive Vice President of Hannibal—he’s also a highly successful government-connected businessman with his own technology and software consulting firm in his native Washington, D.C. Like most, Goode acknowledges it’s difficult to make a living as “just a bass player” anymore, with multi-streams of income being the way to go. His suggestion? Start thinking like a businessman, take stock in the services you can provide, and incorporate.
Explains Goode, “Let’s say you’re a bassist for hire, but you also have bass students, or a Pro Tools studio, or you build or repair gear, or compose, arrange, or do copy work. Incorporating is going to provide a tremendous amount of advantages, beginning with more tax write-offs. This includes your mileage to lessons or gigs, web fees, and everything from gear to your car, which become assets and liability deductions.” He continues, “Another key is that the largest acquirer of services nationally is state and local government. This can be anything from a local 4th of July party to a State Department tour. As an individual it’s very difficult to get that work, but if you’re incorporated, you simply register with the government to get a certified ‘cage code’—which is easy to attain online in a day—and then you can do business on the state/local level and with the federal government. In addition, the government has all kinds of grants and small business loans you can apply for, and they even send you notices with different types of business opportunities.”
One other advantage, says Goode, is your relationship with other companies, specifically endorsement deals. “If you approach a Fender or an Ampeg and say, I have 50 students or a web site that has high traffic, here’s my corporate tax I.D. number, it’s much more appealing to them. You’re giving them something back, and supporting each other as business partners, which can lead to future collaborations like clinics. Also, you open yourself up as an entity someone can invest in—we’ll get you a building for your 50 students or studio or music production house.”
How to proceed? “The first step is to get a lawyer to write up your articles of incorporation—you can find these people online—and file for incorporation in the state you live in. That will cost you around $250. Figure at least another $250 per year to operate, plus taxes owed, so be sure you’ll be bringing in enough income to merit incorporating. The next decision is what kind of corporation you’re going to be. The two most prevalent types in the music business are a Limited Liability Corporation (LLC) and an S Corporation. Your lawyer can best advise according to your needs, but generally an LLC is a little less complicated. What’s important is both limit your liability; should a problem arise with a client, they only have legal retribution against your corporation and not you personally, your home, car, or bank account.” He adds, “One other consideration is your state tax laws. Many companies incorporate through Delaware, where there is little to no state tax. You may want to consider an outside state if the tax laws are more favorable.”
Goode sums up, “Musicians have looked at themselves as individuals for so long it’s hard to change their mindset. If you compose a song and sell it, you need to start a publishing company to collect your royalties. Incorporating can be looked at the same way. You should always treat whatever you do in music like a business; you’re a business entity that provides services. You’re in partnership with people; your employer doesn’t have a bass player, he has a partner. There are outstanding adult education business courses online and at local community colleges; consider taking one, it will change how you view your career.”