King & Ballow
Disruptive Force Fit for Royalty...
Attorney Richard Busch continues to give the majors conniptions. In a now celebrated case, Busch's client F.B.T. Productions, Eminem's former production company, filed suits against Universal Music Group in 2007 and 2008 for alleged underpayment of royalties. Their argument: UMG should treat sales of digital downloads and mastertones of Eminem's music the same way it would treat a master license, under which the artist and F.B.T. would be entitled to a royalty rate of 50% of net receipts, rather than the traditional 12%-20% rate on retail sales of music. A federal jury rejected F.B.T.'s claim, but an appellate court overturned the ruling and the U.S. Supreme Court last year declined UMG's request to review the decision. While UMG downplayed the significance of the case to other artists, arguing that the ruling was only relevant to its contract with F.B.T., Busch is out to prove the major wrong. In December, he filed two similar lawsuits on behalf of Peter Frampton and the estate of Bruce Gary, the late drummer of the Knack. If Busch wins these cases, it could turn the recording industry's economic model upside down and have serious ramifications for the ability of labels to profit from digital sales of catalog titles.
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