Owner wins suit against Sony BMG.
Cleveland International Records owner Steve Popovich learned what his label’s logo on a CD is worth. A federal jury today (May 27) awarded Cleveland International Records owner Steve Popovich more than $5 million after the predecessor label of Sony BMG Music Entertainment failed to include it on compilations with Cleveland's Meat Loaf recordings.
The unanimous verdict in the U.S. District Court for the Northern District of Ohio found Sony liable for breach of a 1998 settlement agreement.
Meat Loaf became a rock icon in the late 1970s with the help of Popovich and his partners, who settled a royalty dispute with Sony Music in 1998.
As part of that settlement, Sony agreed to include the logo in a specific way on "all forms and configurations of the masters," says Popovich's attorney David Webster of Webster Kvale in Cleveland. These masters included 25 recordings such as "Bat Out of Hell" and "Dead Ringer."
The industry custom and practice in artists' contracts is for the parties to agree that failure to include a logo on records is not a material breach of contract, with the label agreeing to then include the logo on future pressings. Logos are rarely included on compilations.
Yet Webster says the settlement agreement was a "truly unique agreement" that included hard-fought language to include it with all releases. He says about 10 million compilations failed to include the logo.
Among the witnesses who testified for Popovich to explain the contract terms and the value of a logo were former CBS Records chief Walter Yetnikoff and former Capitol Records president David Berman.
The jury decided that failure to include the logo was worth $5,057,916.
Nathaniel Brown, VP media relations for Sony BMG, says the company disagrees with the result and plans to appeal the verdict.