#98 Leaving Key Member Clause
13 Leaving Key Member Clause
The “leaving key member clause,” sometimes called the “leaving member provision,” is a section of a recording contract that addresses what happens if a member of a recording group leaves, is kicked out, or if the band splits up. This provision typically gives the record label several options:
- Keep the departing member as a solo artist under the same terms as the group contract
- Retain the remaining members under the same terms
- Terminate the agreement with either the departing members, the remaining members, or both.
The label can even mix and match these options. The idea is that the record label inserts this clause to protect its investment in the group. If the group breaks up, the label wants maximum flexibility to recoup its losses. The clause becomes controversial when it comes to handling any unrecouped balance. Many people mistakenly think of the unrecouped balance as debt, but it is not. If you end your recording contract with a $1,000,000 unrecouped balance, the record company doesn’t put a lien on your house or car. Instead, it’s an internal accounting system that determines when the record label must pay additional royalties beyond the advances that an artist has already received under the contract.
There is a nuanced debate about whether being “unrecouped” is actually bad. Most managers and artists assume it is, but business managers and musicians with quantitative finance backgrounds-like myself-often argue it’s not always negative. In fact, it can sometimes mean you were paid more than you should have been. Regardless, what is truly problematic is when your new band, retained under the “leaving key member clause,” is forced to carry some or all of the previous band’s unrecouped balance. Unfortunately, this happens-and it happened to me when Camper Van Beethoven broke up. I don’t recall the exact percentage, but it wasn’t the whole balance; it was something around 40% of CVB’s debt. At least it wasn’t 100%, as some contracts require. So, before Cracker received a single advance or recorded a single note, we were already in the hole.
Well I arrived late night in
Southern California
Got a ride from Jackson
To my old place in the Hollywood Hills
“Congratulations you’ve been declared
The band’s key member
Here’s the recording contract
and all of the unrecouped debt”
Ironically, many people saw me as “the lucky one” because I got the recording contract while the rest of the band was dropped. However, this turned out to be good for some of the remaining members: Chris, Greg, and Victor immediately secured a brand new (zero unrecouped balance!) recording contract with IRS Records.
But maybe I was lucky. It would have been a tough sell for me to come up with a 20-song demo and shop it to a bunch of record labels, especially as grunge was about to sweep across the entire rock music landscape. Imagine trying to shop the songs from the first Cracker record in 1991:
“Yeah, here’s the singer from Camper Van Beethoven.”
“Is it grunge?”
“No, it’s sort of country rock.”
“Pass.”
That’s not far from the truth. When I turned in the first Cracker record, our A&R guy basically warned us to lower our expectations, since we were putting out a country-leaning rock record at a time when alternative radio was dominated by Nirvana.
Drove my Valiant out to my Redlands
Storage locker
The door was open
The lock laying on the ground
All my gear was gone
Just a crate of vinyl records
Sold them all for cash
At Rhino Records that afternoon.
After Camper Van Beethoven broke up, I drifted around for a while. As I mentioned earlier, I stayed with my grandfather in the UK, then went to Morocco (see the song “Sidi Ifni”), and later Virginia. Eventually, I returned to California, where my manager, Jackson Haring, and future attorney, Brian McPherson, let me stay in my old apartment while I tried writing songs with a few people, including eventually Johnny Hickman.
When I got to LA, I went out to Redlands, CA. I’d left my car at my parents’ house, and all my belongings were in a mini storage unit. My car-a 1964 Valiant station wagon-was fine, but my storage locker had been mostly cleaned out. Someone had cut the lock, apparently just the night before, and taken almost everything: most of my music gear, recording equipment, and my vast vinyl collection. A few records remained. This was extremely disheartening. I considered giving up right then and there-just getting a regular job. I looked up some old friends in Redlands, and we went out and got drunk that night. I woke up the next morning at my parents’ house, slightly hungover, angry, and determined to double down on my music career.
I took what was left of my vinyl records and sold them at Rhino Records in Claremont, California, netting maybe $300. I had about $2,500 in the bank. I drove to Guitar Center in Hollywood and spent about $2,000 on a Tascam 688 all-in-one 8-track recorder, two Shure dynamic microphones (57 and 58), an Audio-Technica small-diaphragm condenser, and an Alesis HR-16 drum machine. Fortunately, I’d taken my two main guitars to Europe, and I’d left a bass and a few other guitars at my parents’ house, so I didn’t have to buy new instruments. I don’t remember the exact figures, but I do recall having about $800 left to my name, and I was determined to make it last until I could demo a few songs for the label.
Wait a minute-what about that record contract? That’s the thing: you get the advance at the commencement of recording, or at least pre-production. The problem was that I was still under the old contract. Damn leaving key member clause! A new deal would have given me a small signing bonus-some walking-around cash. I knew I could probably talk the label into giving me some money a little early, but I’d need a few song demos first. That was my plan.
So I set up a little studio in my old apartment. Bryan McPherson had taken my room, so Jackson and Bryan let me sleep on the couch, and I started recording in the kitchen during the day while they were at work.
I took that cash and my last
Two thousand dollars
Bought a Tascam 688
And some microphones
Set it all up
In the kitchen of Bryan McPherson’s apartment
The record company contract
Leaving key member clause
I already had a few songs in the works, although none were fully finished. One of them was “St Cajetan,” which started as a riff and chord progression I came up with before a Camper Van Beethoven gig at St Cajetan’s-a Catholic church that sometimes served as a music hall at the University of Colorado Denver. I also had a lyric idea: “All I want is a cool drink of water.” That line was inspired by a conversation I had with one of the clergy there. When I asked what St Cajetan was the patron saint of, he paused and replied in broken English, “Complicated… one thing is the man that tells you where to dig a well.” I thought, “Interesting-a dowser, a well diviner. So, St Cajetan, all I want is a cool drink of water.” As it turns out, that’s not quite accurate; St Cajetan is actually the patron saint of bankers and gamblers. Still, since dowsing has a shady history and is basically a form of gambling, maybe the connection isn’t so far off. But I digress.
So I had this guitar riff, chord progression, and one line of lyrics. Johnny Hickman was an old friend from Redlands-we’d even played in some of the same bands (though not always at the same time). I invited him to Los Angeles to try writing together. We started with St Cajetan. Within an hour, he had added a powerful guitar riff and backing vocal melody, transforming the song into more of a southern rock anthem. We tried another song, then another. In about a week, we had five or six songs. They weren’t perfect, but it was clear we had a knack for writing together.
What I didn’t realize was that Hickman was just as broke as I was. He had borrowed money from his mother just to make the drive from Kern County to the writing sessions. One morning, he showed up at the apartment with a black eye. It turned out he’d given his last $20 to the clerk at the Circle K gas station and put a small amount of gas in his car. The clerk gave him change for a ten. A huge argument ensued, and Hickman got punched. The cops came and it was looking bad for Hickman since he’d come around behind the counter. Eventually, a good Samaritan suggested they count the cash drawer. The clerk had $10 too much and gave Hickman his money back, along with an apology. The funny thing was, after that we went into this Circle K all the time for beer and cigarettes-it became our tradition.
Johnny Hickman comes in
with a black eye just out of Kern County
A Circle K argument
Over incorrect change
Couldn’t make up my mind if this was a good
Or terrible omen
But he took out his frustrations
Playing guitar on every song
I could barely get by on my
Bug mechanical royalties
But the record company parties
Kept us fed and drunk
There were local girl flirtations
In the Hollywood dive bars
The record company contract
Leaving key member clause
It’s a wonder we got anything
Done at all
It’s a wonder we ever left
+++++++++++++++
Bryan Howard: bass
Jeremy Lawton: piano and organ
David Lowery: vocals and guitar
Carlton Owens: drums
Matt “Pistol” Stoessel: pedal steel
300 Songs 
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