The world’s top five music companies, in a deal announced on Tuesday, agreed to pay $50-million in unclaimed royalties to thousands of artists, including stars such as David Bowie and Dolly Parton.
The agreement followed a two-year investigation by New York Attorney General Eliot Spitzer’s office that found many performers and writers had not received royalties because the music companies had been negligent about maintaining contact.
”The recording companies have an obligation to perform adequate due diligence and maintain information about the artists to whom they owe this money,” Spitzer told reporters.
”What we found is that, quite simply, they were not doing it,” he added. ”Rather than perform the hard work and effort of tracking down the artists, they were letting these funds accumulate in their accounts.”
The companies included Sony Music Entertainment, Warner Music Group, Universal Music, EMI Music Publishing and BMG Songs.
While the vast majority of artists who will benefit from the settlement are relatively obscure, there are also a handful of prominent performers such as Bowie, Parton, Liza Minnelli, Sean ”P.Diddy” Combs and Gloria Estefan.
According to Spitzer, the record companies responded rapidly to the investigation and $25-million had already been disbursed to those who were owed money.
Most of the remaining $25-million would be returned in the ”near term,” he said.
Under the terms of the agreement, the record companies undertook a series of measures, including listing the names of artists and writers who are owed royalty payments on company websites.
They will also post advertisements in leading music industry publications explaining procedures for unclaimed royalties.
Any monies that remain unclaimed will be turned over to the state in line with New York’s Abandoned Property Law.
The agreement marks an ironic twist to the royalties issue, which is more commonly raised by the recording companies, complaining about lost income due to piracy and internet downloads.
”This is the flip side to that issue,” Spitzer said. ”Once the recording companies have received royalties. Those royalties have to be dispersed to the artists.”
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.” – Sapa-AFP