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Warner Music Group Launches Legacy Royalty Program to Pay Acts With Unrecouped Balances

As part of its 2021 Environmental Social Governance Report, Warner Music Group unveiled its new unrecouped advances program for legacy acts.

Warner Music Group is launching an unrecouped advances program for legacy artists and songwriters who signed with the music company before 2000 and haven’t received any advances since.

The company revealed the news in its inaugural Environmental Social Governance Report, released Tuesday (Feb . 1), making WMG the first major music company to release an in-depth ESG report. The document is a “vehicle to communicate to key stakeholders and a baseline for WMG to measure its ESG progress in areas including employee wellbeing, Diversity, Equity, and Inclusion, social impact, and climate change,” according to a press release.

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Under WMG’s new legacy royalty program, the company won’t apply artists’ and songwriters’ unrecouped advances to royalty statements for any period beginning July 1, 2022 or after. This means that while these creators will technically maintain an unrecouped balance on the docket, WMG will essentially ignore it and pay through any earned royalties moving forward. The program will also benefit producers, engineers, mixers and remixers.

In 2009, according to the report, WMG became the first major music company to implement a digital breakage policy that credits its artists with royalties on minimum guarantees and unrecouped advances paid to WMG by digital services. And in 2016, WMG was the first major music company to announce an equity proceeds sharing policy, through which its artists are credited with royalties on any proceeds from WMG’s sale of equity from digital services for entering into a license agreement.

Last June, Sony Music Group launched a similar program as part of its then-new Artists Forward initiative, which followed Beggars Group’s own program in 2015. Around the time of Sony Music’s announcement, Billboard reported that WMG was considering its own options, while Universal was also looking into legacy contracts and BMG was reviewing contracts of labels it acquired between 2008 and 2019.

This all comes at a time when, as catalog sales are soaring with artists like Bob Dylan and David Bowie’s estate selling their respective publishing catalogs for hundreds of millions of dollars, legacy acts are becoming more valuable than ever. In March 2020, at the start of the pandemic, Billboard reported that catalog (music older than 18 months) was being streamed more than current music; by mid-March, catalog streams were up 21.6% (171.29 billion from 140.88 billion) in the same corresponding period last year.

As for the rest of Warner Music’s 2021 ESG report, the music group touched on its COVID-19 response in addition to more sustainable merchandise, diversity, equity and inclusion initiatives and more. Read the full report here.