The first case involved actor Jared Leto and his band 30 Seconds to Mars being sued by their record company EMI/Virgin. The record company filed suit against the band for damages totaling $30 million dollars. Mike Masnick, who writes for Techdirt.com shared the following thoughts on the legal actions by the band and the record company.
"It's always fun to remember stories like the following one the next time you hear some RIAA exec claim that it represents musicians. The RIAA (Recording Industry Association of America) represents the record labels and record labels are continually at odds with musicians -- sometimes to extreme levels. Wired reported that EMI/Virgin Records had sued the band 30 Seconds To Mars for $30 million recently. Wired now points us to the response from 30 Seconds To Mars, where the band notes that the lawsuit appears to have a lot more to do with the band opting out of its contract. The band points out that, under California law, a contract of more than seven years is not valid -- and the contract EMI held with the band was for nine years.
So why opt out? Perhaps this has something to do with it:
If you think the fact that we have sold in excess of 2 million records and have never been paid a penny is pretty unbelievable, well, so do we. And the fact that EMI informed us that not only aren't they going to pay us AT ALL but that we are still 1.4 million dollars in debt to them is even crazier. That the next record we make will be used to pay off that old supposed debt just makes you start wondering what is going on. Shouldn't a record company be able to turn a profit from selling that many records? Or, at the very least, break even? We think so.
The RIAA itself will be the subject of future research for me but this article is interesting to all who are in the entertainment business and wish to be fully compensated for the work we have done. 30 Seconds to Mars cited the De Havilland Law that states "no service contract in California is valid after seven years" This is great to know for all parties before signing a deal. The record companies seem to be experts at not compensating artist. Does the law where the record company is based take prescendent over where the artist are based? I am not aware if a similar law is in place in New York but what if a NY label signed a California band, does the De Havilland Law protect the band in the same way? The De Havilland Law is named after actress Olivia De Havilland after a successful lawsuit on her behalf which set the prescendent. It has been challenged but no definitive understanding of exactly the application to record deals has emerged because both sides are attempting to muddy the waters.
"In 1987, the record companies lobbied legislators to pass an amendment to the Labor Code Section 2855, which applies only to recording artists and allows record companies to sue recording artists for damages if the artists do not fulfill their original contract.
After seven years, this amendment is no longer relevant, according to Cappello, and artists have the legal right to terminate a recording contract without repercussions, he said."
It is ridicoulous for a record company to sell 2 million records by an artist and claim that they have lost money. It would be almost impossible. Without reviewing the entire contract between the band and record label, we don't know if they provided tour support. Marketing, distribution, recording cost, and advance should have all been more then covered with 2 million units sold. It is true that record companies are masters at manipulating the books to control artist and minimize what they need to pay to the artist. Joe Strummer form the Clash said it was a form of child abuse. Many artist sign deals at a young age and without proper representation. They have no real idea what they are signing and what the contract language means. George Michael ended up spending millions to be freed from his record deal. Strummer decided to "bore them out" because he didn't want to waste millions to be released form an unfair deal. He limited his work to film scores, producing, and performing the 1-2 songs per other artist albums or soundtracks that his contract allowed for and a few tours fronting the Pogues. When he was released he got back to music after signing a deal with Hellcat & Epitath Records. He selected them because of his managements experience with the label and the fact that Hellcat Founder Rancid's Tim Armstrong was a huge fan of Strummer's and he knew he would be treated well and fairly.
I believe artist should write into the language of their record deal that they have full rights to oversee all cost and review all accounting documents related to their business with the label. If the label is claiming to have spent $18 million on marketing for the band then they should need to produce detailed documents of where and how the money was spent. It would be wise for the artist to need to approve any spending on their behalf before it occurs. It will help keep the artist cost under control. Artist must act as an active participant in business decisions made involving their business! I know many artist don't like to think of their art as a business but it is! The artist who don't treat it as such usually end up broke and at the mercy of their record label.
Masnick, concluded his article with a very strong statement against the RIAA, that I felt was worth sharing. "So, at what point will the press and politicians stop buying the RIAA's claims that it's looking out for the musicians and trying to get them paid? The RIAA has always been in the business of not paying musicians."
In 2009, 30 Seconds to Mars and their record label settled their dispute and continue to work together. The exact terms and conditions of the settlement agreement remain unkown.
The next case I was drawn to is Courtney Love being sued by the parent company of her record label Vivendi Universal and her countersuit against the same label. This case has numerous similarities to the 30 Seconds to Mars case. The record company filed lawsuit because it claims that Love did not deliver the 5 albums that the contract called for. Love claims that the terms of the contract are unfair to artist, is an industry practice by record labels that operate under unfair contracts, terms, and work conditions.
According to ABC News, {"Labels, nevertheless, continue to intimidate artists who try to end contracts after seven years by suing them for lost profits, the attorney added. Cappello said this suit "will shake the very core of the way business is conducted in the music industry, and it will give countless musicians the financial and artistic freedom they do not currently enjoy."
"I'm one in a long line of artists who have tried to break free since the [Universal/PolyGram] merger," Love said. "Beck, Garbage, Sheryl Crow, and others have tried to leave or sue that company and they've all been shut down or threatened."
Crow's attorney, Jay Cooper, said, "Sheryl expressed some unhappiness but never threatened to sue, and eventually, we renegotiated the contract."}
Courtney Love's band Hole Celebrity Skin
The De Havilland Law appears to be best used not to be freed from a record deal but to renegotiate the deal. That is what 30 Seconds to Mars did and that is what Sheryl Crow did. It appears the labels can be pressured into striking a more fair agreement but if an artist wants to be free to sign with a competitor label they will fight it until the bitter end.
Perhaps labels should be more fair in the contracts they sign an artist to and their business practices. Yes, the record industry and those who work for it have become enormously wealthy operating the way they have but it has always been unfair. Now artist and their representation are becoming aware and informed enough to fight back. These battles going on are reshaping the industry even if it takes a long time. I do not expect the industry to start being fair because a few artist have managed to renegotiate or get out of their deals. However, continued pressure, loss or revenue and artist simply starting their own labels may force them to do so in the future. If you are an artist reading this you have been warned to be very cautious in your business relationships within the entertainment industry. Hole: Malibu
Brenda Sapino Jeffreys writes that, "The plaintiffs allege in the complaint that the defendants entered into a “limited licensing agreement” to use “Signaling Through the Flames” on their website and in certain venues, but that agreement expired on Feb. 1, 2011, after one year, and the defendants did not renew it. Lakewood spokesman Donald Iloff writes, “The music in question is 1 minute of background music which Lakewood Church had a license to use. The plaintiff is apparently confused about the scope of the license, and are now demanding $3 million for uses that are authorized. We think this is unreasonable.” This appears to be the main issue because both parties agree that Lakewood did at some point have the proper licensing agreement for the song. Is it still in force or has it expired. Did one or both sides not fully understand the terms of the agreement. It appears clear there has not been an intentional unauthorized use of the song. It seems that a fair agreement on compensation can be reached easily when there is a ruling on what the terms licensing agreement are.
The lesson in the above case and all of the cases is to fully understand the law, rights, & responsibilities. Hire quality experts to guide and approve any deal you are involved in. One of the best lessons I have heard from many legal experts over the years is that what a contract does not say can be more important then when the contract does say. If you are being recruited by a company for a record deal, film deal or any thing else and they are treating you well, being very kind to you, giving you gifts, taking you to expensive dinners, and telling you how much they love you. Understand that all those good feelings will not help you if you enter a dispute with the company. The only thing that will help you is to have handled your business like a true professional.
Joel Osteen "Don't Lose Your Joy"
Writing on these three cases made hear The Clash's Complete Control in my head while typing, so I decided to post it as the relevant record of the week. It is the Clash's response to their record label releasing their song "Remote Control" as the next single instead of the track the band felt was best and overall their feelings of mistreatment and manipulation by their record label and management. The song came to fruition when their manager Bernie Rhodes and Sex Pistols manager Malcom McLaren called the two bands together for a meeting and stated that they "Demand Complete Control". The meeting ended at that moment with both bands laughing hysterically as they stumbled out into the streets of London repeating the phrase "Complete Control" as the two bands headed off in different directions. The Clash's "Know Your Rights" may have been a relevant recording as well but I'll save it for another time.
Photo 1: Copyright@Sanderbaks.com
Mike Masnick's full article can be found here: http://www.techdirt.com/articles/20080820/0204472040.shtml
Hellcat Logo: Copyright@Hellcat Records
Photo 2: Copyright@JaredLeto
The full ABC News presentation on Courtney Love can be found here: http://abcnews.go.com/Entertainment/story?id=108872&page=1
Photo 3: Copyright@Courntey Love
Photo 4: Copyright@Joel Osteen
Brenda Sapino Jeffreys' full article can be found here: http://texaslawyer.typepad.com/texas_lawyer_blog/2011/08/recording-artists-and-record-company-owners-sue-lakewood-church-pastor-joel-osteen-and-co-pastor-vic.html
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