American rocker Eddie Money has reached an out of court settlement with Sony Music regarding the payment of royalties on digital revenues. He was one of many US heritage artists to sue one of the majors following the landmark ruling in the case between FBT Productions and Universal Music.
As previously reported, there has been much dispute over what share of download revenues record companies are obliged to pay to artists whose record contracts precede and therefore do not mention digital. The question is whether download money should be treated as record sales or licensing income – artists usually get a much bigger cut of the latter than the former.
Eminem collaborators FBT successfully sued Universal on this issue, arguably setting a precedent that can be used by other artists with pre-iTunes record contracts to increase their cut of digital income. A plethora are now suing, with all three majors facing litigation on this issue.
Sony Music, which faced some of the earliest lawsuits in this dispute (pre the FBT v Universal fight), has been trying to reach out of court settlements, by offering a slight increase on the cut of download money shared with artists.
Money sued the major in June last year. Initially his lawsuit was focused exclusively on the digital royalty issue, but was subsequently expanded to include allegations of dodgy dealings on the major’s part regards royalty reporting and deductions made on CD income. Sony tried, unsuccessfully, to have the case dismissed late last year.
Money’s case was linked up with the separate and previously reported lawsuit being pursued against Sony by Toto, both of which have the digital royalties issue at their heart. More recently both cases have been subject to so called ‘discovery disputes’, with both the artists and the label claiming that the other side was failing to provide documentation that was required for the case to proceed. The judge overseeing the cases last month required the artists to provide Sony with various documents by last week.
Out of court negotiations clearly continued as all that was going through the motions, and last week, according to Law 360, the Money camp reached a deal with Sony which sees the artist drop all his allegations against the major. The terms of the arrangement are not known. Though the Toto case is seemingly still ongoing.
It was the second of these disputes to be resolved last week, The Doobie Brothers’ Michael McDonald having settled with Warner Music too. It’s in the majors’ interests to keep these disputes out of the courtroom, where dangerous and costly industry-wide precedents could be set, though with so many artists suing, that might not be possible. Meanwhile artists outside the US watch with interest as they consider their own position regards the digital royalties they are being paid by their former label partners.
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