CA performers win audit power
p2pnet.net News Feature:- Recording artists in California will soon be able to conduct annual audits on any record company doing business in the state.
Yesterday, governor Arnold Schwarzenegger signed SB 1304 which in effect gives artists a way to compel the labels to allow searches for unpaid royalties.
New York state Attorney General Eliot Spitzer’s office recently found the Big Five record labels hadn’t been paying many of their artists and writers. This affected both star entertainers with numerous hit recordings “and obscure musicians who may have had only one recording,” said Spitzer. The labels were ordered to pay $50 million to musicians they’d had under contract.
And it seems one of the Big Five – Warner Bros – tried hard to screw elderly Sam Moore of ‘Soul Man’ and ‘Hold On! I’m Comin’ fame out of his pension. Now Moore is one of several music industry veterans suing Sony, Universal, BMG, Warner and EMI for failure to make or report royalties to their retirement funds.
In the meanwhile, the new California law also “holds down the cost of audits through means such as letting a single auditor work for several artists on the same label simultaneously,” says an Associated Press story here.
Before SB 1034, the right to audit which existed in the record industry was, “approaching the same level of abstraction as the right to vote did in the Deep South before the Civil Rights Act,” said AFTRA ( American Federation of Television and Radio Artists) president John Connolly told the California Legislature recently.
“Artist royalty rates are typically set around 12 percent to 16 percent of sales,” says the AP report. “But before any of the royalties reach an artist, they must usually cover promotion, production, packaging and other expenses. In addition, the labels withhold large percentages to cover discounts they offer to retailers as well as reserves for any returned goods.
“Up to this point, artists have faced the choice between paying for expensive audits, possibly uncovering less money than the cost of the audit, or not conducting the audits and losing out on royalties.”
Well – that takes care of California.
How many other states are there?
July 17th, 2004 at 10:07 pm
It may not make much difference in the end. The industry was violating the contracts they had themselves written. Next step is to change them. Contracts could be rewritten to force new artists to give up almost any legal right – of course this would not affect current or past contracts.
Unfortunately artists are on the very bottom of the industry food chain – getting paid last, when and if any money is left over. “Creative accounting” as they call it, has for a long time insured that the “expenses” will in most case exceed what would have gone to the artist. It’s almost as if the artists should be grateful to the record companies for not making them pay out of pocket.