Warner Music Group claims in newly released court papers that Madonna's Maverick Records has lost $66 million since 1999. The labels are in a dispute over the value of Maverick and who will control it
Warner Music Group claims in newly released court papers that Madonna's Maverick Records has lost $66 million since 1999.
WMG says in a recently unsealed Delaware court filing that Maverick's principals -- led by Madonna and Guy Oseary -- would have to cough up $92.5 million on top of a buyout price if they want to take control of the label. That figure includes the cited $66 million in losses along with an outstanding $20 million loan and other unrecouped costs.
WMG claims Maverick generated $50 million in profits, shared between WMG and Maverick, prior to 1999.
The court-filed disclosure, originally filed March 24, is the latest wrinkle in an ongoing spat between Maverick and WMG over the value of the label and who will control it after this year. WMG has an option to buyout the 60% of Maverick it doesn't currently own when the labels' joint-venture agreement expires on Dec. 31.
According to the court document, if Maverick cannot raise the money needed to buy itself out of WMG's control, WMG would convert the label into a "purely passive economic interest," over which Maverick would have no operational control and from which Maverick could regain no profit until WMG recovers its $66 million in losses as well as the outstanding loan.
As previously reported, Maverick on March 25 filed a $200 million breach-of-contract suit in California Superior Court in L.A., seeking to terminate the joint venture. The suit charges WMG with inaccurate accounting practices that understated the value of the label. WMG's March 24 filing was a preemptive action against Maverick, asking a judge to declare that Maverick's claims baseless.
As part of the buyout process, Maverick must value the venture. WMG then has the option of taking a buyout at that price, or buying out Maverick's stake at the same price.