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Archive for February, 2009

Eminem Sues Universal Music Group Over Digital Royalties in Landmark Case that Will Define Digital Royalties for All Artists

Saturday, February 28th, 2009


A trial that will help define what percentage of digital royalties an artist is entitled to has finally arrived after a two year journey through the judicial process.   Rap artist Eminem and his publishing company FBT Productions have sued Universal Music Group for $1.6 Million in alleged unpaid royalties.  Digital royalties are earned by an artist whenever music by that artist is downloaded online or through a ring tone for example.  The percentage of royalty payments that an artist and label will receive are usually included in an artists contract.  However for artists and labels that have been around long before the digital revolution arrived, determining who gets what percentage of the digital royalties becomes a concern.  Before ipods and ringtones became mainstream there were no contract clauses in an artists contract discussing digital royalties.  The dispute between Eminem and Universal seeks to define whether the digital music will be considered a license or a further distribution of the music.

“Eminem’s lawyers argue that downloads should fall under the “licensing” agreements that cover physical releases such as CDs and vinyl records, but Universal Music Group says they are governed by “distribution” arrangements, which have lower royalty rates.  Whereas an artist might split licensing royalties 50-50 with their label, under distribution rates they often earn less than 30%.”

“If you give the music to a third party without cost to you, like manufacturing or packaging, that’s the same as a licensing agreement,” a member of Eminem’s legal team explained to The Wrap magazine. “[Universal] are characterising it as something else.”

I have to side with Eminem on this one.  Universal is not actually distributing any of the music, they are just allowing a third party such as iTunes to put the music on their servers.  There is no difference from releasing an actual CD and releasing a CD to the Internet.  If however Universal played a major role in getting the music into a third party’s hands and actually “distributed” and marketed the music, then Universal could come out victorious.  The affect on other artists may turn out to be a case by case issue, hinging on whether a label significantly distributed and marketed the music.  In the end I think this will be a major win for all artists worldwide who have never been able to take advantage of all of their digital royalty rights.

UPDATE:  Eminem loses case to UMG  This is a big blow to musicians worldwide.  I am sure this issue will come up again and if anything the public is more aware of the issue.  As a consolation Eminem did receive $159,000 in accounting errors from the payment of royalties.


If an Agent Doesn’t Stick Up For Their NFL Client Then Who Will?

Wednesday, February 11th, 2009

houston20texans20logoIt happens all too often in the NFL, players playing injured, stepping it up for their team against the better judgment of outside medical consults that the players were never told they should have.  Players are told to rely on their team doctors because they think the team doctors and staff know what is best for them.  This is false.  Teams and coaches are always looking to bend the rules and do whatever it takes to get ahead, which doesn’t include the best interest of the players.  Players are reluctant to challenge team managements wishes for fear that they will be labeled as a malcontent and become expendable, foregoing millions in salary.

Last week there was disturbing news coming out of Houston Texas in which Stevenson accused the Houston Texans of requiring lineman to participate in an illegal contact practice last May in violation of the NFL Collective Bargaining Agreement (CBA).  According to the NFL CBA spring drills must not involve contact or pads.  One player, former Houston Texan player Dan Stevenson has decided that labels and lost salary are a moot point once a player suffers a career ending injury.  Stevenson suffered a right shoulder labrum tear after participating in the allegedly illegal drills last May.  Stevenson has stood up for other players who still are playing in the NFL or are looking for new teams.  The CBA rules are meant to protect players from becoming injured in the offseason.  Stevenson became expendable when he was injured last May during the illegal contact drills which possibly caused him a career ending injury and a loss of millions of dollars in future earnings.  Stevenson with help from a personal injury lawyer is not afraid to stand up to the Texans now that he is no longer with the team and his NFL career is in jeopardy.  However other players on the team choose not to fight the team for fear of becoming blacklisted in the NFL.

An average NFL players career is just under 4 years and most players may only spend a few years in the NFL.  This means that NFL players need to make the most of their NFL chance and earn as much money as they can in a short period of time.  It is an NFL players’ agent’s duty to recognize the gravity of a situation such as having his player participate in illegal contact drills which could lead to career ending injuries.  An agent who is familiar with the NFL CBA should recognize the gravity of the situation and be able to file an NFL grievance on the players behalf.  Most players have no idea of what their rights are and need an advocate to represent their rights and the rights of all NFL players.

The NFL needs to hand down severe penalties against teams like the Texans who break NFL CBA rules which are put in place to protect players.  If swift action is not taken, teams will continue to take advantage of players, causing the average players career to be even shorter than it already is.

ESPN’s Outside the Lines took an in depth look at what happened in Houston, Texas last May.  Click here for the full story:

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