Are you planning on organising a music festival this year? What’s involved is undoubtedly a lot of research and planning. Organisers often spend a significant portion of their time securing artists and events so it can be easy to overlook the legals. But how do organisers best protect themselves in case issues arise? A musical festival business plan will be your playbook that you can show to any potential sponsors or artists and will articulate your strategies and end-goals (i.e. is the festival for profit or promoting the arts?). We step you through how you can mitigate against this risk by drafting this plan.
Step One: Business Structure
You will first need to decide on a business structure. How will you apportion liability between the organisers and will the festival be for profit or non-profit? The most common structures available include:
- Incorporated Association: An incorporated association can protect the organisers as it limits liability to the membership fees required to continue membership in the association. Incorporated Associations will be appropriate for music festivals which will operate on a not-for-profit basis.
- Company Limited by Guarantee: A company limited by guarantee is also suitable for music festivals which will be not-for-profit. The personal liability of the organisers is limited to the amount of money they nominate, as guarantors, in the event the company winds up.
- Proprietary Limited Company: A proprietary limited company is suitable for festivals which aim to generate a profit. Organisers who are either shareholders or directors will have their personal liability limited by the amount invested in shares in the company. This is one of the advantages of a company structure over other forms of business structures, such as a sole trader or partnership structure.
Each business structure has a separate registration process, and different costs and legal implications. You will, therefore, need to consider which is most appropriate to you.
Step Two: Budget and Funds
In preparing your budget, you will need to set out the funds clearly and consider the following:
- Artist costs (travel expenses and accommodation – especially if the festival is out in a rural area);
- Product costs (equipment hire, venue hire, light and sound);
- Marketing costs (posters, brochures and advertisements);
- Staff costs; and
- Insurance.
You may also consider funding options and as such, should investigate any applicable sponsorships or grants from the Commonwealth, state or local governments. For example, each financial year the Department of Communications and the Arts provides funding to support the presentation of arts and cultural activities. Their applications close in the last week of every March and September. Additionally, ‘auspicing’ is another financing option available for festival organisers. Auspice agreements are used to assist community organisations fund their activities.
Step Three: Insurance
Standard forms of insurance to guard against anything going wrong include:
- Public and Employer Liability: in the event someone is seriously injured at your event;
- Cancellation and abandonment insurance: in the event your festival is cancelled due to unforeseen circumstances.
The business insurance you require depends on the nature of your event. It may be useful to speak with an insurance broker who can provide quotes on one-day or ten-day insurance packages for festivals.
Step Four: Permits, Licences and Releases
It is likely you will require an “event permit” from your relevant council authority. Further, no music festival is complete without its food stalls and, perhaps, drink stalls. Along with these items come other necessary licences.
If you intend to take photos or film the festival, you may need a film location release from the relevant local council. Failure to obtain permission exposes you to the risk of losing your media.
Step Five: Intellectual Property
Will the artists perform covers or material created by other people? If so, you will need to obtain the necessary clearances and IP licence agreements to carry out these works. If the music is created specifically for your festival, you will have the option of determining who will own the copyright in the music – an IP clause can be inserted into the artist’s employment agreement.
It is also important you work up a buzz and register any necessary trademarks. Registering a brand can protect your reputation and promote your festival. A successful festival depends on effective advertising and marketing campaigns.
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It is clear that a lot of planning and effort goes into a music festival business plan. Your time spent planning and organising should not be taken lightly. Should you have any questions about organising a music festival contact LegalVision’s business lawyers to assist you with this. Questions? Call us on 1300 544 755.