Eminem's Side Wins Quiet Victory in Royalties Case; Artists, Check Your Contracts!

A quiet victory does not necessarily mean a small victory. And a royalties triumph for Eminem does not necessarily extend to other musicians -- or does it?

The Supreme Court declined to hear an appeal by Universal Music Group, upholding the Pasadena appellate court ruling that Eminem's former production company, F.B.T. Productions, is entitled to half of the profits from downloaded tracks and ring-tones distributed by Universal Music Group. Universal had paid F.B.T. 12 percent of sales.

The ruling could have significant financial benefits for Eminem and F.B.T. as well as legal implications for many other artists. "For us, this is probably a $40 million to $50 million issue," Joel Martin of F.B.T. told the Detroit Free Press. "Every artist who has this sort of language in their contract is now going to go back to their record company and say, 'OK, so what do you want to do about (download royalties)?'"

The case will go to trial to determine damages if the two parties cannot agree on a figure.

So, what does it really mean for other artists?
Here are a couple suppositions. Leave your own in comments.

via Music News Online

Industry observers say the case could affect more than just Eminem's royalties, and at a potentially high cost to other recording companies. Some industry observers think it could affect as many as 90 percent of all contracts signed before 2000.

A large percentage of record contracts like Eminem's, which was signed in 1998, predating the digital era, spelled out smaller royalty payments for music sold in physical form than music licensed for other uses, for movies, for example.

via the Free Press

Universal and some industry observers have said it will have few ramifications beyond Eminem. Most current hit artists already have contracts that explicitly spell out download royalties, and many other deals have been reworked in recent years.

"We've been waiting for this from the Supreme Court, but we've been talking with the artists about it, and they've been very interested," said Billy Wilson of the Motown Alumni Association, which had filed an amicus brief in the case. "And it's not just Motown artists, but many others in the same situation, who now have the same opportunity to renegotiate their contracts -- and renegotiate the structure of the music industry, really."


It's pretty shocking that huge company like Universal Music Group wouldn't have preempted this lawsuit with some sort of amendment to the contract or other action. Now, we're left to wonder whether this will become a bandwagon for artists with outdated language in their agreements. Will other artists who coasted from the late 90s into the digital millennium have their shot at a cool stack of cash?

Check your contracts, Britney, JLo, Christina, Backstreet Boys, Spice Girls -- maybe you'll have your day in court (and now, some of you probably need the money)!


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