Sony Music's royalty and accounting departments are under fire again, this time with country superstar Brad Paisley.
Brad Paisley is claiming the company misreported or improperly withheld $10 million from him. But with a new lawyer on the case, Sony may even be on the hook for a larger amount, as digital royalties are likely to become an additional focal point in the long-running case.
The suit began in 2010, when Paisley had Sony served with a summons in New York, over alleged miscalculations across a range of the country star's accounting and business dealings. In an amendment of Paisley's initial complaint made public on April 30th, Richard Busch, a lawyer for King & Ballow in Nashville, estimates Paisley's losses at $10 million, as stated, but also hints at a new direction.
Busch's involvement in the case could mean it's headed towards new territory (for Paisley, at least): digital licensing royalties. Typically, song licenses have a 50% revenue rate for artists, while sales are generally 12-20% depending on the artist. Why is this relevant to a case that's been percolating for four years? Because Busch is the lawyer who successfully challenged the accepted 12% rate for digital sales as licenses, successfully raising the rate to 50% on behalf of FBT Productions around Eminem's royalties. Busch argued that streaming plays are broadcasts, not sales, which would then carry the lower rate. Busch is currently attempting to do the same on behalf of 19 Entertainment, home to many successful 'American Idol' alums.
Now, it can be inferred from some requests in the new filing referring to "digital service provider sales reports," Busch is looking to bring Brad Paisley along for the ride as well.
The larger case of misreporting and arcane accounting errors could be resolved out of court in a settlement, a common conclusion to artists' audits of their labels books on them and the suits that often result. Indeed, Sony settled with a trifecta of '70s soul and R&B groups (The Zodiacs, The Silhouettes and The 5th Dimension, the latter responsible for recording the "Hair" medley "Age of Aquarius/Let the Sunshine In") in January for an undisclosed amount, according to documents filed in New York Supreme Court. As lawyer Owen Sloane characterized it to us: “You beat each other over the head with a two-by-four for a while and then you sit down to figure it out." The issue of digital licensing royalties seems to be something of a passion, and a successful one at that, for Busch. Any artist would likely welcome a jump of 38 percentage points in their digital licensing royalties, especially as the services continue to claim a larger and larger slice of listening audiences across the globe.
Representatives for Sony Music, as well as Paisley's manager, refused to comment on unresolved litigation.
Additional reporting by Ed Christman.