Coalition Eyes Measure To Repeal 7-Year Statute

Representatives of the Recording Artists Coalition (RAC) are in talks with top political consultants to arrange polling and focus groups for a possible California ballot initiative to repeal legislati

Representatives of the Recording Artists Coalition (RAC) are in talks with top political consultants to arrange polling and focus groups for a possible California ballot initiative to repeal legislation that ties recording artists to contracts for more than seven years. If RAC moves forward with the plan, it could put its Creative Artists Initiative on the ballot for the November 2004 election. About 373,800 signatures are required to get an initiative on the ballot.

"The ballot initiative is something that has to be looked at; it's certainly an idea that I think the board of RAC is interested in reviewing and will be getting some serious consideration," said Simon Renshaw, RAC board member and manager of Dixie Chicks. The initiative has yet to be brought before the entire RAC board.

The move comes after negotiations have stalled between record companies and artist rights activists to find a compromise solution. A legislative action introduced by California state Sen. Kevin Murray (D-Culver City), was put on hold last year and was reintroduced last month as a bill in a music industry package along with two bills that would clean up allegedly ambiguous record label royalty and accounting practices.

"There was a generous compromise agreement on the seven-year issue available to the artists," a Recording Industry Association of America (RIAA) spokesperson said. "It's hard to imagine a worse use of public resources -- or those of record labels and artists -- than a ballot initiative that will cost so much yet affect so few."

Such an initiative, from the focus-group phase to acquiring the necessary signatures to greenlight a ballot measure, could cost RAC as much as $600,000, not including the costs of advertising, which could amount to millions. RAC did, however, raise more than $2 million during a series of artist rights concerts last year and could put on more benefit shows. It would cost the record labels millions to launch an opposition campaign to the ballot measure.

Of the pending compromise agreement between RAC and the labels, Murray said, "It's a deal that, after extensive discussions, the artists did not take."

But the artist rights advocates and the record labels are making headway in reforming accounting practices. As a result of numerous royalty and accounting hearings, three of the five major label groups have outlined actions to reform and make their systems more transparent to artists. Warner Music Group has already begun to negotiate its artist contracts under a new, shorter form that has a less complex approach to calculating royalties and has improved its royalty terms for permanent digital downloads. Universal Music Group, which in December outlined new practices in an internal memo, has also implemented its actions. BMG Entertainment said it is phasing in its new accounting commitments.

Only Sony Music and EMI have yet to announce adjusted practices. If all five agree to new accounting practices, legislative action might not be necessary. But recording artists' exclusion from the California Labor Code's seven-year rule, which does not allow personal-service professionals to be tied to contracts for more than seven years, has yet to be resolved. Therefore, Murray said, a ballot measure might be the way to go.

"As a legislator, I always think it's better to work things out legislatively," Murray said. "But a ballot initiative is a legitimate option for the Recording Artists Coalition."

Combating piracy is one area where artists and record labels agree. Murray will chair an informal hearing on peer-to-peer file-sharing tomorrow (March 27) in Sacramento before the members of the Senate Select Committee on the Entertainment Industry. Representatives from such services as KaZaa and Morpheus as well as the Motion Picture Association of America, RIAA, RAC, and EarthLink are expected to speak.

The hearing will also address CD pricing and how the copyright infringement occurring on peer-to-peer services will next affect the film and television industries.