musicNEWS: Labels Agree To Pay $50 Mil In Back Royalties
The settlement comes after a two-year investigation by New York state Attorney General Eliot Spitzer's office. Spitzer spoke with reporters at a news conference where he explained that new procedures are being put into place as part of the settlement that will insure that artists and their descendants will receive the royalty money that is owed to them.
“Once the recording companies have received royalties, those royalties have to be disbursed to the artists who are owed those funds," Spitzer said. "There are many artists who struggle. ... They depend on the stream of royalties."
The companies that agreed to the settlement include SONY Music Entertainment; Sony ATV Music Publishing; Warner Music Group; UMG Recordings; Universal Music; EMI Music Publishing; BMG Songs; Careers-BMG Music Publishing; BMG Music and the Harry Fox Agency.
Spitzer told reporters that $25 million of the previously unpaid royalties has been distributed to the artists, with $25 million still due.
The settlement includes an agreement that the record companies will make “good-faith” efforts in the future to locate artists that have royalties coming to them. However, if an artist cannot be located the money will revert to the state.
The RIAA says that their member companies already attempt to track down artists that are owed royalties and have begun turning over the unpaid money to state governments to hold until a legitimate recipient can be located.
"The RIAA member music companies are committed
to ensuring royalties are paid to those who have earned them," said Steven
Marks, general counsel for the RIAA. "The agreements announced today with
the New York State attorney general are the results of two years of cooperative
efforts and reflect our members' determination that the focus stay on making
sure royalties get to their deserving owners: the artists."