Music companies say check is in mail

$50 million to artists in back royalties

May 05, 2004|By Jeff Leeds | Jeff Leeds,LOS ANGELES TIMES

In an unusual pact with New York authorities, the world's largest record corporations have agreed to step up their efforts to track down a slew of recording artists who are owed back royalties of about $50 million.

As part of a deal announced yesterday by New York Attorney General Eliot Spitzer, the five conglomerates - Universal Music Group, Sony Music Entertainment, EMI Group, Bertelsmann Music Group and Warner Music Group - are expected to share their latest artist contact information with one another. They will also post advertisements in order to find thousands of performers who may have been lost in the shuffle in recent years, sources said.

The deal could provide long-awaited paychecks to many lesser-known acts who have disappeared from the pop charts, or to their estates. But the unpaid also included a number of prominent stars who shouldn't be difficult to find, among them David Bowie, Dolly Parton, Liza Minnelli, Sean "P. Diddy" Combs and Gloria Estefan.

"Once the recording companies have received royalties, those royalties have to be disbursed to the artists who are owed those funds," Spitzer said at a news conference announcing the settlement. "There are many artists who struggle. ... They depend on the stream of royalties."

The attorney general said about $25 million in royalties has already been paid, with the other $25 million still outstanding.

While the sum represents a fraction of the royalties that labels pay each year, the deal indicates that authorities are pressing for overhauls of the industry's accounting practices.

Amid sustained pressure from artists, a number of the companies have revamped their royalty accounting processes in the last two years. One such measure has been the introduction of shorter contracts that cut out royalty deductions that critics say obfuscate artists' real earnings.

Under the New York agreement, the companies are also expected to make periodic reports of their royalty payment efforts to Spitzer.

Any money that remains unclaimed will be turned over to the state in line with New York's Abandoned Property Law.

Stressing that he did not want to paint his relationship with the music companies as "adversarial," Spitzer said they had acted "wisely and properly" when confronted with the problem.

However, he could offer no clear explanation for why or how royalties were withheld from the better known artists who would have been easy to track down.

"I think it may be that some things weren't paid attention to as closely as they should have been," Spitzer said. "There was not a grand conspiracy to cheat them out of these sums of money. But perhaps I'm being charitable."

Agence France-Presse and the Associated Press contributed to this article.

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