Ian Katz in New York
The American rock group REM, unremarkable looking thirty-somethings whose catchy tunes are hummed by teenagers, have become the highest paid group in the world after signing a record $80-million contract with Warner Brothers.
The deal could trigger a rush of “me, too” demands from other established artists, just as a series of vast pay cheques for Hollywood stars have forced up wages in the film industry.
The members of the group, which has dominated the US rock scene for almost 10 years and sold more than 30-million albums, will be aged nearly 50 when they deliver the last of five albums promised under the deal.
Warner Brothers executives announced that they had re-signed the band that had been at the centre of a fierce bidding war since it delivered the last of six albums under an earlier contract with the company.
The deal outstrips the $70-million contract between Virgin Records and Janet Jackson signed in January, and dwarfs other mega-deals with acts such as Madonna and Michael Jackson.
Under the contract, REM will receive a $10-million signing bonus, a $20-million advance against royalties from the six earlier albums, and $10-million for each of the five new albums. The band will also receive almost a quarter of the price of each album sold.
The band members will split their windfall equally between them, just as they share all songwriting credits.
Recording companies are under pressure to pay over the odds for high-profile acts to prove they are big league players and to gain leverage to help distribute less celebrated artistes.
Warner Brothers was particularly desperate to keep REM after having been shaken by a recent boardroom battle. Two senior executives defected last year to David Geffen’s DreamWorks, confident that they could take REM with them.
With drama befitting an awards ceremony, Warner Brothers’ president Steven Baker was handed a telegram from the band as he addressed a strategy meeting of company employees.
The crowd broke into a standing ovation when he reported its contents. “This is a watershed moment for Warner Brothers Records, an incredible new beginning for the company,” he said.
“I can’t describe how proud we are that REM is allowing Warner to continue our association with them.”
The band was formed in 1980 after guitarist Peter Buck met singer Michael Stipe in an Athens record store where Buck worked. They were joined by bass guitarist Michael Mills and drummer Bill Berry.
Their debut album, Murmur, earned them a cult following, but they exploded into the mainstream in the early 1990s with Out of Time and Automatic for the People.
Until this year, Madonna topped the pop earnings charts with a $60-million recording and film deal signed with Time Warner in 1992. The Rolling Stones secured a meagre $45-million for three albums.