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"Record companies try to make a profit and they know that 90% of their artists will not succeed. They pay vast amounts on advances, promotional and marketing costs for these artists and rely on the handful of artists who succeed to recover their losses and make a profit."
——the RIAA's Cary Sherman
MUSICIANS GET SEVEN-YEAR ITCH
California State Legislature to Hear Arguments From Artists, Biz Regarding Contracts

Courtney Love and Don Henley will lead a charge of pop artists at a hearing in the California state legislature Wednesday (9/5) to denounce what they claim are corrupt business practices by big recording companies, Reuters reports.

The hearing before the Select Committee on the Entertainment Industry in Sacramento will focus on California's so-called "seven-year statute," which restricts entertainers from being tied to any company for more than seven years. Due to a controversial amendment in 1987, musicians lost protection under the statute and music labels won the right to sue them for undelivered albums at the end of seven years.

In February, Love sued her label, Universal Music, aiming to get out of her contract and spotlight what she describes as "repressive and unfair working conditions" faced by many recording artists.

Henley, of course, has also been victimized by record labels, most notably having suffered the indignity of a multimillion-dollar contract.

Opponents of the amendment, led by Love and Henley, claim young artists are often forced to accept impossible terms when signing a recording contract, depriving them of bargaining power.

"These contracts are not mutual. It's a one-way arrangement. Artists should be treated as all the people in the state of California," said attorney Jay Cooper, who represents Sheryl Crow and several other performers, and who plans to testify at the hearing.

The list of folks testifying on the industry side inlcudes EMI North America Deputy President Roy Lott, MCA SVP Jeffrey S. Harleston, Warner Bros. SVP Mark Goldstein, Sr. and  Miles Copeland (Ark 21 Records and other ventures).

"Record companies try to make a profit and they know that 90% of their artists will not succeed. They pay vast amounts on advances, promotional and marketing costs for these artists and rely on the handful of artists who succeed to recover their losses and make a profit," said Cary Sherman, Senior Executive Vice President and General Counsel of the RIAA, who is also, perhaps unsurprisingly, among those presenting testimony. "It's a risk-pooling arrangement and has succeeded in forming the most vibrant music industry in the world."

Lawyers who represent artists disagree.

"When an artist comes in, they sign anything. The labels modify the contracts by their actions because they don't want albums as quickly as the contract requires," said Don Engel, an attorney for the Dixie Chicks, who are currently trying to leave their label, Sony, because of alleged royalty underpayment. Sony has countersued for breach of contract (hitsdailydouble.com, 7/17).

"Whenever there's a situation in which one class of citizen is being singled out for treatment, it needs to be looked at," said Noah Stone, spokesman for the Recording Artists Coalition, a group co-founded by artist rights activist Henley in 2000.

The group currently claims 125 members, including Crow, Tom Petty and Alanis Morissette. Many stars in the group are planning to attend the hearing, Stone said.

"There is clearly some ambiguity in the law and we will investigate how to clarify the law for both artists and their employers," said State Sen. Kevin Murray, the committee chairman. "Virtually every industry in California, with the exception of the record industry, is held to personal-service contracts that cannot legally run longer than seven years."

While the Dixie Chicks' suit does not involve the seven- year statute, the trio is accusing Sony of cheating them out of more than $4 million through a variety of allegedly fraudulent accounting practices. Such practices are expected to be central to hearings and other lawsuits.

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