Artist Managers Consider Suing Over Unpaid P2P Settlements

Authored by Mark Hefflinger on February 29, 2008 - 9:19am.

New York - Managers of top recording artists are considering legal action against major record labels, saying that Universal, Warner Music (NYSE: WMG) and EMI are dragging their feet in distributing hundreds of millions of dollars in settlements from copyright infringement lawsuits against file-sharing firms like Napster and Kazaa, the New York Post reported. "Artist managers and lawyers have been wondering for months when their artists will see money from the copyright settlements and how it will be accounted for," attorney John Branca, who has represented Korn and The Rolling Stones, told the Post. "Some of them are even talking about filing lawsuits if they don't get paid soon."

An estimated nearly $400 million, including $270 million from Napster and $100 million from Kazaa, has been awarded to the labels -- but the managers say little of this money has found its way into the hands of artists.

"They will play hide and seek, but eventually will be forced to pay something," artist manager Irving Azoff told the Post.

Record label sources told the Post the labels are figuring out how to divide up whatever money is left over between artists, after hefty attorneys' fees are paid.

"If anything has been paid so far, it has been minimal," Jay Rosenthal, legal counsel of the Recording Artists Coalition, told CNET News.com.

"They are certainly going to claim that the legal costs have eaten up the proceeds, but I don't believe that is the case."

For its part, Warner told the Post that "nearly all settlement monies have been disbursed," while spokespeople for Universal and EMI have stated that they intend to share the settlements with their artists.

The other major, Sony BMG (NYSE: SNE), was not party to at least the Napster lawsuit, as Napster received financial backing from, and was eventually acquired by Bertelsmann.