While Yankovic filed a breach of contract suit March 30 against Sony Music Entertainment alleging he was underpaid more than $5 million, Tower of Power recently entered a class action complaint against Warner Music Group that claims the company “has deprived plaintiffs and the class members of tens of millions of dollars in royalties.”
According to court documents obtained by the Tennessean, Yankovic says he’s owed more than $2 million for songs downloaded through iTunes, Amazon or cell phone companies as ring tones. The case, filed in a New York federal court, also raises a new claim in the royalty battle between artists and labels because Yankovic alleges he’s also entitled to a cut of Sony’s profits from the company’s deal with YouTube.
Sony apparently gave the Google-owned site access to its content in exchange for an equity stake in the company years ago. And because Yankovic’s song “White and Nerdy” was one of YouTube’s most popular videos at the time and made up a portion of Sony’s worth to YouTube, Yankovic claims he is owed a share of Sony’s profits from the deal.
Yankovic also seeks compensation for legal awards, settlements, overpayments and underpayments from Sony, the suit says.
Tower of Power’s class-action suit, filed in U.S. District Court in California, gives a glimpse behind the curtain of Warner Music Group’s recording agreements with artists.
According to court documents, the standard WMG agreement uses two equations to calculate royalties owed to artists – physical products sold, which typically generate royalties of 10 percent, and master recordings licensed, which provide royalties of 50 percent. The suit claims WMG’s agreements with digital content providers like iTunes constitute licenses and, as such, should provide artists with royalties of 50 percent.
Instead, the company has treated digital downloads as sales, resulting in royalty percentages that are “less than half of what it should be applying in its computation,” Tower of Power alleges.
WMG “systematically, knowingly and intentionally miscalculated the royalties due to plaintiffs and the other class members,” the suit says. “As a result, [WMG] under credited and/or underpaid each and every class member, while also deriving substantial financial benefits from its leasing/licensing of these master recordings.”
Tower of Power is seeking class certification, an injunction that would bind WMG to the terms of its recording agreement and compensatory, exemplary and statutory damages.
Eminem, Peter Frampton, The Allman Brothers Band and Cheap Trick filed similar suits over download royalty rates in recent years. Em was reportedly awarded between $17 million and $20 million from Universal and 50 percent of all revenues from iTunes downloads last year; Sony settled out of court with The Allman Brothers Band and Cheap Trick.