Musicians attack labels over royalties

The musicians - including soul star Sam Moore and rapper Montel Jordan - and the legal representatives, spoke before the state Senate's Judiciary Committee in Sacramento on Tuesday.

They claimed record labels Bertelsmann, EMI, Time Warner Inc, Vivendi, Universal and Sony, were guilty of financial irregularities amounting to billions of dollars in unpaid royalties

Members of the record industry denied the charges, claiming the accusations were being thrown as part of a wider power struggle between artists and music labels.

The hearing was called by California Senate Judiciary Committee chairman Martha Escutia, and Senator Kevin Murray.

Senator Murray is trying to push through a bill to stop the record industry from being able to enforce contracts of longer than seven years, the maximum in other US industries.

Reforms

Singer Moore told how he had suddenly realised in his 50s that his retirement fund would only bring him $67 (£45) a month.

This was, he said, because his record label had never paid into it.

Jordan added that, despite selling millions of copies of his 1995 single This is How We Do It - and many albums - he owed money to his record label.

"I have sold many gold and platinum records. I've never had a money-making loss and yet I still haven't recouped," Jordan said.

Many of the lawyers also called for reforms, suggesting the recording industry develop a standard set of accounting rules.

Don Engel estimated that record companies routinely underpaid "10 to 40% on every royalty" and dared artists to challenge it without killing their careers.

Fair

But music industry representatives, including Steven Marks of the Recording Industry Association of America (RIAA) - a trade group for the big five labels - refuted the charges.

On the same day, the RIAA released a study backing its claim that the industry negotiated contracts fairly.

The report says it shows that recording contracts reflect terms agreed by all parties.

The study is based on an analysis of more than 500 recording contracts between artists and the five major labels between 1994 and 2000.

Its findings are that, in all but one of the cases examined, artists were represented in their negotiations with record labels by lawyers.

The study also states that deals renegotiated after albums became hits tended to be more financially rewarding to artists.

This proves, concludes the study, that the record industry shares its wealth with its hit-makers.