RE: The Who Mailing List Digest V9 #151

["Nigel Morton" <nigel@xxxxxxxxxxxxxxxxxxx>]

Hi guys, a while back one of the moderators of this list complained that I
was going "off topic" with one of my postings.  Strange then to see few
postings on this particular digest that are on topic.  Also, interesting to
see the posting from Schrade about a band being in debt to their label since
they broke up.  It's either an utter crock of shit, or they got the worst
legal advice in the world.  Band and label contracts are weighted heavily
against the artiste from the get go BUT to my knowledge not to an extent
where individuals are in debt!  Let me explain - when signing to a label  a
band or individual performer will get an advance for signing (there'll be
other advances as well during the course of the contract).  For the label to
get that, and any other monies paid by them on behalf of the artist, back
they do so by "recouping it" from sales made of the act's product via the
royalty they're paying to the act.  The liability of the act to repay the
monies advanced them DOES NOT EXIST whatsoever EXCEPT via earnings the act
would've made from album / cd / single sales and not from any other source.
What can happen is a group are refused release from the recording contract,
and this is either as a group or as the individual members who make up such
a group, whcih means that the label (the contract holders) have first rights
on releasing "new" material that may have been done by the individuals after
their original group split up. What this effectively means is that a
musicians career is over if they / he / she cannot get released from a
recording contract after the origninal signing group as broken up!  The
group or the individuals would not see any royalty earnings from record
sales until AFTER ALL advances have been recouped.  Recently, this has led
to disputes between acts and labels because once they've "recouped" then the
act should, theoretically be, the actual owner of the product because
they've "paid back" the loan.  George Michael had that argument with Sony
and I believe one or two others are now trying to get themselves released
from contract - Courtney Love; Don Henley etc because they argue correctly
that they owe the label nothing so why should the label retain copywrite
ownership in the actual sound recording?  It is worth mentioning that most
acts on signing to a major label would get a royalty rate of around 14%
based upon the DEALER price of the record NOT the retail price, that royalty
rate is also affected by "packaging deductions", the charge made by the
label to the act for the sleeve etc and bizarrely a "breakages deduction"
which is a throw back to the days of 78's when they were made from
shellac(?) and broke easily.  So, in the UK most albums have a dealer price
of between # 6.05 - #8.05, take an average of # 7.00, deduct a package
charge of 15% (this is a pretty basic sleeve), leaves #5.95, deduct the
breakages @ 10% leaves #5.355 on which the act then get's 14% = # 0.749 per
album sold!  The act has recieved a signing advance of # 25,000, plus
#100,000 recording costs (there are other advances as well but I'm trying to
keep this simple) so the label are in debt to the tune of #125,000 and for
the act to repay that amount in full they need to sell 166,889 copies of
their album!  And, the way the labels are legally entitled to get their
money back is from PRODUCT sales!  If they don't release the album or it
doesn't sell, then the individuals are NOT personally liable for the debt
EXCEPT from earnings they may make that can be recouped by the label - these
come from sales!

NM