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Musician's future tour earnings not shared on divorce

Monday, 20 January, 2020

Mostyn J has rejected a wife's argument that her musician husband's share of ticketing and merchandising income generated by future band tours was a matrimonial asset susceptible to being shared in her financial remedy claim.

The case concerned the bass player of a well-known band, who received several types of income in the form of royalties, as well as income from touring. Mostyn was required to capitalise the value of these income streams and produce a clean-break agreement consisting of a Duxbury capital sum and a time-limited maintenance arrangement, along with child support. The parties had been married for 15 years, and had six children aged from six to 20.

There were five separate royalty income streams: the musician's own composition royalties; payments from broadcasts of the band's songs; a share of royalties from songs composed by other band members; a share of recording royalties; and a share of ticketing and merchandising income. Each had different 'multipliers': numbers conventionally used to convert revenue streams into a capital sum, depending on how secure they are and whether they can be sold off.

On expert advice, Mostyn assessed the total income from the first four streams at GBP4.45 million a year, capitalised at GBP10.2 million.

The wife also argued that the fifth stream, future touring revenues, represented a matrimonial asset susceptible to being shared. Mostyn, however, is the originator of the standard judicial guidance on this point, as given in the case of B v S (2012 EWHC 265 Fam). He accordingly dismissed this income stream as pure future earnings that could not be predicted, especially as the band's lead singer had already announced he wants to take a two-year break from touring. It was thus irrelevant to the financial settlement, although relevant to child maintenance. A similar conclusion, that it is now settled law that income is not a matrimonial asset capable of being shared, was reached in the recent case of O'Dwyer v O'Dwyer.

Excluding this income stream, the total assets thus came to GBP10.2 million, of which the wife was granted half, plus maintenance of GBP42,786 a year until the clean-break date. He also ordered the musician to pay GBP12,600 a year child support for the four minor children still living with the wife, plus their school fees. This too was based on his own guidance, this time in the case Re TW & TM (Minors) (2015 EWHC 3054 Fam).

The orders made in the wife's favour amply met her reasonable needs after repaying her debts, he concluded (CB v KB, 2019 EWFC 78).

Sources