Musicians vs. Labels

Most aspiring musicians dream of the day they will sign a contract with a major record label. Too often, the dreams become nightmares from which they can escape only much later in life.

So stated Don Henley, Courtney Love, Patti Austin, LeAnn Rimes, and other musicians in appearances before the California Legislature's Select Committee on the Entertainment Industry during the first week of September. The artists came to Sacramento to plead for changes in California contract law which they hope will free them from a form of indentured servitude that controls not only how their creations can be marketed, but also when and where they may play—even if privately and for free.

California contract law has a "Seven-Year Statute" that limits to seven years the length of time workers can be held to service contracts. In 1987, the music industry succeeded in having recording contracts exempted from the law. This, according to the musicians who spoke at the hearings, allowed record labels an unprecedented degree of control over the careers of artists under contract—including delaying or withholding the release of material already recorded, or holding artists financially responsible for albums they don't deliver. Country stars The Dixie Chicks, who are embroiled in a lawsuit against Sony Music Entertainment for accounting irregularities, were among those appearing. Courtney Love also testified. She and her band Hole are waging legal war with Universal Music over five albums their label claims it is owed. Love has also sued over accounting problems.

The contract law exemption is "unconstitutional because it singles out the record industry," according to Don Engel, attorney for The Dixie Chicks. "These contracts are unconscionable, signed by entry-level artists who mostly have no power." Country diva LeAnn Rimes testified that she was only 12 years old when she signed a contract with Nashville's Curb Records. Now 19, she will be 35 before she fulfills the contract—if ever, she claimed. "At 12, I didn't understand everything in my contract," she commented. "All I knew is that I really wanted to sing." Her contract also spells out where she can live: her choice of Texas or Tennessee.

Don Henley, The Eagles drummer and songwriter, has long been at the forefront of the artists' struggle against oppressive contracts. A co-founder of the lobbying group called the Recording Artists Coalition, Henley was instrumental in having a "works for hire" provision repealed from federal law in the last months of the Clinton administration. "The deck is stacked, and has been stacked for 60 years, in the recording companies' favor," he told the California senators. In recent years, powerless performers have resorted to bankruptcy filings as a tactic to escape bad contracts.

The music industry supplied a number of executives and representatives to bolster its case, which revolves primarily around the risk that a label assumes when it signs a new act. Binding contracts are necessary, according to Recording Industry Association of America senior vice president and general counsel Carey Sherman, who stated that "90% of all new acts lose money." He cautioned legislators not to "turn one-sided anecdotes into stereotypes of an entire industry. Labels are no more alike than all artists are alike." A San Francisco Chronicle report on the hearings quoted Sherman as calling some of the artists present "arrogant superstars who forgot that the industry once took a chance on them." Music industry marketing executives claim that it takes a minimum investment of one million dollars to "break" a band—that is, to do the necessary groundwork to gain it some public recognition.

Of the Recording Artists Coalition, Moody Blues manager Miles Copeland said, "They're attacking the livelihood of the record company. The position artists are taking will have a very detrimental effect on new artists." The changes in contract law sought by musicians "would have an impact on record companies operating in California," according to Roy Lott, deputy president of EMI Group PLC's EMI Recorded Music North America. "They'd either need to move the record company out of state or change the nature of their relationship to recording artists." California, New York, and Tennessee dominate the US recording industry. Changes in California law won't affect contracts signed elsewhere.

Henley and his colleagues hope to do for musicians what Olivia de Haviland did for actors in the 1940s. She successfully challenged Warner Brothers' contract policy, ushering in an era of free agency for actors and putting an end to the old Hollywood studio system. Many musicians have already stepped outside the system: Ani DiFranco has been very successful with her own Righteous Babe label, and pop stalwarts Prince and Peter Gabriel have both resorted to direct marketing to sell their recordings.

The California hearings are being chaired by Sen. Kevin Murray (D-LA), who was formerly a music agent with the William Morris Agency. Murray described the hearings as "informational only," but said he believes changes should be made to the statute. "I don't think the system works," he stated. "If you don't sign a contract, you don't have a career in the record industry. But you can't decide you don't want to be part of the system either." Describing his experience with the issue, Murray said, "What surprises me is that a lot of artists use their celebrity for charity, but they don't fight for their own self-interest."