Artists Slam Music Industry Reporting
Tue Jul 23, 2002
By JIM WASSERMAN, Associated Press Writer
Credit Yahoo News

SACRAMENTO, Calif. (AP) - Singers and entertainment attorneys criticized California's $41 billion recording industry Tuesday, testifying that it routinely underreports royalties and cheats artists of millions of dollars.

The speakers were testifying before the state Senate's Judiciary Committee and alleged financial irregularities by the five global corporations that dominate the music business.

Music attorney Don Engel estimated that record companies routinely "underpay 10 to 40 percent on every royalty" and dare artists to challenge it without killing their careers.

"I've heard of this hearing described as a fishing expedition," said entertainment attorney Fred Wilhelms. "There are big fish out there."

The record industry denied the characterizations and cast the allegations in a context of power negotiations between artists and their lawyers and the record labels.

"That's what's going on here. No more, no less," said Steven Marks, senior vice president of the Recording Industry Association of America.

The industry also released an economic analysis that showed fewer than 5 percent of signed artists produce a hit record. Likewise, for every hit, the industry loses $6.3 million on albums that fail.

Among those testifying, singer Sam Moore, formerly of Sam and Dave, recalled learning in his 50s that his retirement fund would be $67 a month because his record label never reported income to his pension fund.

Singer Montel Jordan, who had the 1995 hit, "This is How We Do It," said despite 2 million singles from that release and several albums since, he still owes money to his record label.

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

Several speakers, calling for reforms, suggested the recording industry develop a standard set of accounting rules.

A bill introduced in the Senate would close a record industry exemption from state labor law and limit contracts to seven years.