Record Biz Coughs Up Royalties

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http://www.eonline.com/News/Items/0,1,14029,00.html

 

Record Biz Coughs Up Royalties

 

by Julie Keller

May 4, 2004, 1:00 PM PT

 

Just what P. Diddy needs: more Cristal money.

 

His Puffyness, along with such well-heeled music types as Dave Matthews, David Bowie, Dolly Parton, Gloria Estefan and hundreds of other musicians, could soon be getting a little bit richer.

 

In an unusual show of solidarity (though it was, technically, forced), the world's biggest record labels have joined together to pay a whole bunch of recording artists back royalties amounting to more than $50 million.

 

For some of music's big guns, the payout is fairly negligible when you consider their multimillion-dollar bank accounts--Matthews is owed about $14,000, while Bowie will receive about $10,700, according to Rollingstone.com. But that kind of cash could be huge to a number of starving artists.

 

The settlement, announced Tuesday in a press conference by New York Attorney General Eliot Spitzer, is the result of a two-year investigation into the royalty accounting practices of record companies and music producers.

 

As part of the deal, the five major labels--Universal Music, Sony Music, EMI, BMG and Warner Music--will pool their artist info and post ads to find any performers with whom they may have lost contact in an effort to make good on any unpaid royalties. If the artists can't be found, the money will revert to the state.

 

"Once the recording companies have received royalties, those royalties have to be disbursed to the artists who are owed those funds," Spitzer said at the news conference.

 

While several big-name musicians will benefit from the deal, it could also result in much needed paychecks for one-hit-wonder artists who have disappeared from the music scene.

 

"There are many artists who struggle...They depend on the stream of royalties," Spitzer said.

 

According to Rollingstone.com, in the cases of deceased artists like Waylon Jennings, Dizzy Gillespie and Frank Sinatra, the money will go to their estates. Heirs to the late vocalist Tommy Edward ("Love Is All We Need," "It's All in the Game") are in line to collect one of the larger payouts, about $230,000.

 

The companies have already paid about $25 million in royalties, according to the Los Angeles Times, and they are due to cough up another $25 million in IOU money in the coming weeks.

 

Spitzer's legal maneuver is likely to prompt a major overhaul in the accounting practices of the music biz.

 

Under the terms of the settlement, the companies will also have to report their efforts to Spitzer to make sure they are complying with the deal.

 

For their part, the record companies swear that they didn't intentionally stiff their clients but that many performers move around from label to label so much they are hard to find.

 

"If we can't find people," an anonymous record exec told the Los Angeles Times, "we can't give them a check."

 

Spitzer seemed to agree, saying he's not accusing anyone of shady business dealing--he just wants unpaid musicians to get what they are owed.

 

"It's not like there was a grand conspiracy to cheat them out of these big sums of money," he said. "It was just a failure to do what should have been done. That's why we have this settlement."