Recording Artists Can Now Audit Record Companies

[doug osborne]

My local California State Senator Kevin Murray has had a bill signed into law by Gov. Schawartzenneger which is a great step towards helping musicians get money they are owed by record companies.

 

The bill allows those under contract to record companies to audit sales to confirm they have received proper royalty payments. Seems simple enough, but until now, this has been at the sole discretion of the record company unless you sue, and most courts in CA would not take these cases.

 

Now, you can have an approved auditor, including an auditor working on contingency, go through the books and see if you have been paid properly.

 

CA SB 1034

 

BILL NUMBER: SB 1034

SB 1034, Murray. Recording contracts: royalties.

Existing law prescribes the rights of parties to contracts for

various types of services.

This bill would authorize a royalty recipient under a contract for

the production of sound recordings, notwithstanding any provision of

the contract, to audit the books and records of a royalty reporting

party, as defined, to determine if the royalty recipient has earned

all of the royalties due pursuant to the contract. The bill would

require the royalty recipient to retain a qualified royalty auditor

to conduct the audit ...

 

[DJDM]

That's a substantial concession for them to make... they must be getting desperate.

[DJDM]

Or perhaps the economic toll really has been worse than realized and they've simply lost their lobbing power in CA? Interesting...

[boosh]

Hey Dawg,...any explanation why none of the audiostreams on your website seem to work on my winamp player?

[DJDM]

Originally posted by boosh:

Hey Dawg,...any explanation why none of the audiostreams on your website seem to work on my winamp player?

There is a solution but I don't want to hijack the thread here. I'll PM ya.

[doug osborne]

Hey Dawg,...any explanation why none of the audiostreams on your website seem to work on my winamp player?

 

There is a solution but I don't want to hijack the thread here. I'll PM ya.

Thanks! It's only because I'm an idiot .

 

I have tweaked the mixes, but I haven't fixed the links. Only so much time with day job, kids, girlfriend, etc....

[doug osborne]

Originally posted by DJDM:

Or perhaps the economic toll really has been worse than realized and they've simply lost their lobbing power in CA? Interesting...

It started with the flurry of testimony in Sacramento a few years ago by some big names California Lawmaker Wants Music Contract Law Repealed

Jan 9, 2002 12:00 PM

 

A California state senator on Monday launched a legislative assault against the music industry on behalf of recording stars such as Courtney Love and Don Henley who have been crusading to free artists from record company control. California State Sen. Kevin Murray (D-Culver City) introduced the bill this month to repeal an amendment won by the music industry in 1987 that keeps recording artists tied to personal contracts longer than talent in other industries such as film and television.

[ani]

Do they have another very deceptive law written into the fine print that would give more authority for the state to change laws without voter consent?

 

Whenever a law is TOO GOOD TO BE TRUE, I'd be looking at the fine print to find out what rights citizens are signing away.

 

Not saying it's what happened out your way, but here in Kansas City; the politicians promised that the moneys earned from casinos would be used to place money into the school districts as an incintive to to gain voter approval to allow the casinos in. After a few years passed and no funds had been released, a new bill was presented to the public to "RELEASE" the funds for the schools. However, in the same bill that was written to release the casino tax earnings for the schools, they also wrote that a 7/8 vote among members of the house would allow them to change the laws without voter consent. Of course the bill was voted down and the money out of the casinos NEVER made it to the schools.

[doug osborne]

Whenever a law is TOO GOOD TO BE TRUE, I'd be looking at the fine print to find out what rights citizens are signing away.

As I read this law, I see no mechanism to actuallly get the label to pay the musician. I guess lawsuits will be flying after the audits.

 

Many, many recording contracts are signed in CA. Most recording contracts have not-very-fine-print that states audits will be done by the label at their discretion. That is what has been addressed with this law.

[Duddits]

I'm very skeptical that this type of audit would be successful.

 

The record companies can represent their gross vs. net to the auditor to shroud actual profit, similar to Hollywood-style accounting.

 

Furthermore, the cost of a genuine audit of one of these companies would be prohibitive to the artist. The audit would cost more than any artist could ever hope to get.

[Dennyf]

Originally posted by Duddits:

I'm very skeptical that this type of audit would be successful.

 

The record companies can represent their gross vs. net to the auditor to shroud actual profit, similar to Hollywood-style accounting.

 

Furthermore, the cost of a genuine audit of one of these companies would be prohibitive to the artist. The audit would cost more than any artist could ever hope to get.

Exactly the first thoughts to cross my mind.

 

Words to live by in the world of business:

 

"Figures lie, and liars figure."

[Philip OKeefe]

The bill allows those under contract to record companies to audit sales to confirm they have received proper royalty payments. Seems simple enough, but until now, this has been at the sole discretion of the record company unless you sue, and most courts in CA would not take these cases.

 

That's always been possible - assuming you had a good attorney and were savvy in your contract negotiations. I would never suggest that anyone sign a contract without an audit clause in it.

 

Of course, the downside to auditing is the potential for later retaliation aganst you by the label.

 

Publishers and writers have been able to audit record companies over mechanical royalties for years... but again, the downside of doing so is potential retaliation. Those publishers who are affiliated with the Harry Fox agency in NY can have Fox do the audit on their behalf... with the added bonus of Fox will do so for several people they represent all at once, and not just one single publisher - thus keeping the identity of the "source" of the audit anonymous.

[ani]

Just out of curiosity; is the Fox news channel associated with the Harry Fox Agency? Never thought about that until now. Anyone know?

[Philip OKeefe]

There's no affiliation Ani.

 

In 1927, the National Music Publisher's Association established HFA to act as an information source, clearinghouse and monitoring service for licensing musical copyrights. Since its founding, HFA has provided efficient and convenient services for publishers, licensees, and a broad spectrum of music users.

 

With its current level of publisher representation, HFA licenses the largest percentage of the mechanical and digital uses of music in the United States on CDs, digital services, records, tapes and imported phonorecords.

 

From

 

http://www.harryfox.com/about.html

 

 

(Edited for a type, and to add that "HFA" is short for the Harry Fox Agency. )