“As I was working with my manager and my new attorneys on my lawsuit with the Universal Music Group, we realized that the most unfair clauses in my contract applied to ALL recording artists.” –Courtney Love, “Letter To Recording Artists”
Every business partnership between recording artists and the companies who invest in them the way venture capitalists invest in startups must undergo the offer and negotiation process before finalizing any record or publishing deal. The contract, above all, explains the binding terms, conditions, and obligations that establish what can and can’t be done during the agreed duration of said partnership. No amount of wealth, celebrity, or influence can override what the writing says once the contract is signed.
Earlier this month, Migos filed a malpractice lawsuit against their former attorney Damien Granderson, accusing their long-time counsel of using his position and power as their lawyer to benefit their record label, Quality Control. From the Migos’ perspective, this clear and obvious conflict of interest cost the group millions of dollars in lost earnings.
When you consider the binding nature of a contract, an artist’s lawyer is supposed to be an asset, a confidant working to secure the best deal for the talent. These allegations against Granderson are a stark reminder that, if you can’t trust your own lawyer, you surely can’t trust the label to do what’s in your best interest.
Kanye West signed his co-publishing contract with music publisher EMI—who is now owned by Sony/ATV—in 2003, before the completion and release of his 2004 debut album, The College Dropout. On January 25, 2019, the Atlanta-born, Chicago-raised superstar filed two lawsuits to a Los Angeles Superior Court: One against his publishing company in pursuit of terminating their 16-year contract, and the other suing UMG Recordings, Bravado International Group, and Roc-A-Fella Records for unpaid royalties.
Various music blogs and websites published stories about the case, the best being, “Understanding Kanye West’s Label Lawsuit: Why ‘Ye Is Fighting the Record Industry” by Complex associate editor, Shawn Setaro.
Setaro’s article highlights how the lawsuit against EMI brought California Labor Code Section 2855 into a present-day, high-profile court case. Based on what the public knew then, it appeared the 21-times GRAMMY Award winner found a way to earn declaratory relief from his publisher who, per a report by TMZ, owns the rights to over 200 Kanye West songs.
“It [Section 2855 of the Labor Code] basically said that one can’t employ anybody for more than seven continuous years, without the opportunity for them to seek employment elsewhere at the end of that period should they choose to do so.” –Jay Cooper, Entertainment Attorney, “Understanding Kanye West’s Label Lawsuit: Why ‘Ye Is Fighting the Record Industry”
Unlike a major label record deal, where the contract stipulates the artist must deliver to the record company a set number of albums, Kanye’s publishing deal is based on him owing EMI an undisclosed amount of songs. Although the specific number has not been made public, more of the contractual terms became publicized as the case unfolded.
For one, EMI, per the publishing contract, has a clause in place that makes New York the exclusive jurisdiction for any and all controversies pertaining to their agreement with the Jesus is King rapper. Kanye’s attempt to use a California Labor Code in a California courtroom was grounds for them to counter-sue with a breach in contract accusation against their controversial client.
As such, the clause allowed the publishing company to move the case to a federal New York courtroom, where they stood firm that, after seven extended modifications—the latest being in 2014—and tens of millions of dollars advanced, their deal was not only fair, but all terms were agreed upon by all parties involved.
After failing to receive declaratory relief from the contract through Section 2855 of the Labor Code, one of hip-hop’s most outspoken artists quietly spent 2019 going back-and-forth with his publishing company, finally settling the lawsuit out of court this past January.
Fair is a funny word to use concerning artists and their relationship to publishing companies and record labels. Considering how the publisher and record label are always the financial benefactors in these deals, they decide the terms best for their businesses. It’s up to the artist and their team to negotiate what’s best for them. It’s at this juncture when artists must not forget they are their own brand, their own billboard, and the boss of their own business.
So, what did Kanye, after seven modifications, actually agree to? And why, after receiving millions of dollars for his song rights, did he view the terms as unjust?
“The contract and the extensions required at least three ‘full new compositions’ each contract year for the initial years, at least six compositions in later years, and at least seven during the last two one-year option periods.“But a contract year isn’t actually a year in length; it is the length of time it takes to deliver the compositions, the suit says. And the compositions also are strictly defined; they must be written solely by West on studio albums at least 35 minutes in length, released only by major labels paying specified royalties.“As a result, West’s lawsuit says, ‘EMI could purport to require Mr. West to continue to render exclusive services to EMI for years, perhaps even for the rest of his life.’” –Debra Weiss, “In dueling suits, Kanye West alleges contract ‘servitude,’ while music publisher claims deal breach”
In EMI’s countersuit, we learned of another stipulation: The publishing company will retain ownership of Kanye’s publishing 12 years after he completes the terms. When you consider, back in October 2018, the living hip-hop legend admitted in a nine-minute Periscope video that his publisher refused his multi-million dollar offer to buy back his publishing, this nugget is significant.
Not only is Kanye unable to buy back his publishing rights, but he must also continue operating as a full-time recording artist—writing, recording, and producing compositions and major label albums as his primary occupation, essentially, unable to retire from recording and releasing music.
In their teens and 20s, most recording artists intend to create until the end of their lives. When music is your life, why stop? Why retire? Why not work forever? In a business that rewards consistency and longevity, playing the long game, from a commercial perspective, is the only game worth playing.
In the record business, companies and labels will exchange copyright ownership for millions of dollars to valuable talent. As the saying goes, high risk, high reward. There’s nothing more valuable to an artist than their freedom and ownership. Offering both under a long-term contractual commitment can make the artist rich faster than sustaining their independence—but is it a fair trade?
Mark Cran, who was on the counsel of the late English singer and songwriter George Michael in the 1992 case Panayiotou v. Sony Music Entertainment, didn’t think so. He argued his plaintiff was a victim of an unfair contract in an industry that benefited from keeping the recording artists in deals to their disadvantage.
George Michael, 30 at the time of his lawsuit, signed to Innervision Records as an 18-year-old member of the unknown pop band Wham!. He rose to prominence as a pop giant throughout the 1980s. Innervision, distributed through CBS Records, sold Michael’s original contract to Sony in 1987. One year later, the world-renowned star signed an eight-album deal with the label.
Following the release of his 1990 sophomore album, Listen Without Prejudice Vol. 1, Michael felt his record label no longer aligned with who he was as an artist. He called his deal “professional slavery.”
George Michael’s decision to sue Sony in an effort to terminate his contract was a landmark case for the record business. David Lister, a long-time journalist at The Independent, believed, at the time, that the case had the potential to change record labels’ ability to sign acts under such long-term deals.
“If George Michael wins the case to make his contract with Sony unenforceable, it will have enormous repercussions, probably ending the tradition of artists being signed for years to a single record company, giving them the freedom of movement that film stars have among studios,” Lister wrote, teasing a future that provided artists much-needed fluidity.
At the time of his lawsuit, George Michael’s worldwide royalties over the previous five years amounted to 16.89 million pounds, compared to Sony’s 95.5 million. Michael’s gross profits were a little less than 7 million pounds, while Sony’s were over 52 million. These numbers show the vast disparity in how much money the musician made compared to the lion share his label received.
Mark Cran wanted to use this data in support of his plaintiffs to show the court the imbalance of financial power artists have compared to their investors.
Sony, much like with EMI’s rebuttal to Kanye’s lawsuit, contested the deal was fair because Michael agreed to those terms, and that financially, the record business can only sign and invest in new acts through profits made by their biggest signees. Without extensive contracts, the model of advancing large sums of money wouldn’t be sustainable.
When Drake raps, “I keep the fuckin’ lights on in the buildin’, man, my record deal should be 500 million,” it’s not just a braggadocious stunt. His enormous success as a recording artist helps to pay the bills at OVO, Young Money, Cash Money, Republic Records, and his publisher, who, like Kanye, is EMI.
No matter how much artists compete against one another, the songs they make, the albums they sell, and the tours they embark upon all fund the companies they’re signed to. Contractually, that’s who profits in exchange for investing in their dream. Oh, and the judge dismissed George Michael’s case, leaving the pop star in a “slave deal” he couldn’t legally escape. In an interview years later, the late star admitted he regretted the lawsuit.
It’s worth noting that, in the 2018 Periscope video, Kanye tells “Big John” and “Marty” of Sony/ATV that he won’t use the “S” word; that he wasn’t Prince; that he wouldn’t write it on his face. These are all references to the infamous period in the early 1990s when the late musical genius appeared in public with “slave” written on his face. That moment in history is still one of the most polarizing public disputes between a record label and a renowned recording artist.
Dating back to 1992, Prince, who began his recording career in 1977 by signing with Warner Brothers at 18 years old, earned the most lucrative contract of his career following the 1991 commercial success of his 13th studio album Diamonds and Pearls. One blogger, who goes by Scififilmnerd, has an excellent financial breakdown of the record contract on his Prince Vs Warner Brothers BlogSpot:
“On 31 August 1992, Prince signed a new recording contract with Warner Bros. It would reputedly earn the star $100 million. It would fund six albums, each with an advance of $10 million, and provide joint-venture funding for Paisley Park Records, another new label, and payment for Prince in the role of vice-president of A&R, including a suite of offices in the Warner building in Century City, California.”
From the label’s perspective, offering a multi-million dollar contract to a cult-like figure of Prince’s esteem means encouraging the self-producing songwriter to manufacture years of chart-topping records and commercially successful albums, and helping to build a roster of hungry new stars, utilizing his position as vice-president of A&R to attract and amplify rising talent.
Upon signing, Prince, like most artists, was happy about the mutually-agreed-upon terms. Even though his album sales were uneven following the stellar success of his highest-selling album, the timeless 1984 classic Purple Rain, he was in the position to embark on a new career arc.
Two months after the ink on his new deal was dry, the Minnesota legend released his 14th studio album, O(+>, to warm and positive fanfare from both the media and fans, but the sale numbers didn’t soar high enough to appease Prince’s expectations. His reaction was to blame the label. It was their fault, he thought. They marketed the wrong single. Their promotion, or lack thereof, not the music, was to blame.
Like a marriage, a union is only as strong as the parties’ ability to communicate. Once the husband or wife begins feeling unheard, the cracks start to crumble. In Prince’s case, as the artist, he wanted control. Warner, as the label, wanted him to follow their formula. They didn’t see eye to eye; money be damned.
Soon after the release of O(+>, the artist Warner signed as a young man decided to become a hellraiser. What started as internal resistance soon became artistic self-sabotage and creative public rebellion.
The complete fallout between Prince and Warner is well documented on Scififilmnerd’s BlogSpot. In the fourth chapter of his breakdown, he notes how a conversation between Prince and Mo Ostin, the head of the label, sparked the downfall. Essentially, Ostin reminded Prince during a phone call that the label owned his forthcoming album before he even started to work on it. “This guy just told me that whatever ideas I have in my head are not mine,” Prince reportedly said following the call. “They belong to Warner Brothers.”
Contractually, Warner Brothers did own the Gold Experience; they owned Prince’s next few albums. Not only did they want those albums, but they also wanted them to be successful. That’s not how the artist saw it, though. The creator felt his creations were trapped and would remain trapped as long as he was a Warner artist. Instead of taking them to court, Prince fought them with a pleasant bitterness. He challenged them on stage; in the studio, in interviews, everywhere he could except the courtroom until they let him free.
Prince knew it was not in his best interest to go to court. Although Michael’s case played out in a European courtroom where some hoped the employee laws would support the artist, the judge sided with the record label. The terms were clear, made in writing, and he agreed to them. Which is relevant to all artists: Your contract is your career. No amount of wealth, celebrity, or influence can override what the writing says once the contract is signed.
Based on these three stories, among thousands of others, it’s clear the music business has a massive issue with balancing what’s best for the artist’s business and what’s best for keeping the entirety of the recording industry afloat. When you consider how complicated contracts are to comprehend, how exactly does the artist level the playing field? You can say, “Get a good entertainment lawyer,” but where does one find suitable, trustworthy counsel? Especially when the artists are young men and women who only know their craft, not the business. Ignorance is not bliss.
In Courtney Love’s Letter to Record Artists, she rallies for her industry peers to come together, hoping to form a union since there isn’t one. Unfortunately, the letter Love wrote in 2000 is still relevant in 2020. Without a union, who supports the best interest of the recording artist?
“Recording contracts are unfair and a single artist negotiating an individual deal doesn’t have the leverage to change the system. Artists will finally get paid what they deserve when they band together and force the recording industry to negotiate with them AS A GROUP.” –Courtney Love, “Letter To Recording Artists”
Don’t ever get it twisted: the music business can make you rich, but it will cost you. Your contract will tell you how much and for how long. Please, sign carefully.