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Topics of discussion will include what damages are available to record companies under the existing California Labor Code Section 2855 (b).
RAC vs. RIAA: THE NEXT EPISODE
Artist Advocates, Major Label Reps
to Testify in Hearing
The cogs of government are turning. Tomorrow (3/19), during its regular, weekly meeting, the California Senate Judiciary Committee will hear testimony from representatives of both sides of the seven-year statute issue.

The informational hearing before the seven-member Committee, which will delve further into the specifics of Sen. Kevin Murray’s SB 1246, is set to begin at 1:30 pm and will last up to five hours. Those expected to testify on the artists’ side include attorneys Jay Cooper and John Branca and manager Jim Guerinot. In addition, a couple of actual artists may show to tell their personal stories as well as provide the requisite photo ops.

The RIAA's Hilary Rosen will be testifying, and members of the newly formed California Music Coalition—which argues that changing the current law will drive music-industry jobs out of California—are expected to participate as well.

On the agenda are opening remarks from Committee Chair Sen. Martha Escutia (D-Montebello) and background from Murray, followed by approximately 10 minutes of testimony from each side. The remainder of the hearing will consist of Senators browbeating witnesses from both sides with increasingly strident questions and high oratory, culminating with one or more standing and shouting, "Have you no decency, Senator McCarthy?!"

Just kidding.

According to inside sources, topics of discussion will include the following: Just what damages are available to record companies under the existing California Labor Code Section 2855 (b), the so-called music industry exemption to the seven-year statute, including a discussion of certain damages vs. speculative damages and possible defenses to damages claims; a dissection of the risks incurred by a label in putting out records, including advances, recoupment, etc. and what is charged back to the artist; contract renegotiations and when "tacking" takes place; contract practices, including "standardized" new-artist contracts and firm deals vs. option deals; and the timetable of an album release, including how touring and promotional duties take up time and whether touring benefits primarily the artist, the label, or both.

The artists’ side is expected to come in packing charts and graphs detailing the RAC’s arguments and explaining royalty breakdowns and contract language.

On Wednesday (3/20), a two-hour meeting with both sides and Sen. Escutia and Senate President Pro Tem John Burton (D-San Francisco) will take place in Sen. Burton’s conference room. The artist side will include Sen. Murray, RAC lobbyist Darius Anderson, managers Guerinot and Irving Azoff, attorneys Cooper and Branca and possibly Don Henley.

After its introduction on Jan. 7, Murray’s bill was sent to the Judiciary Committee (1/17), amended (see Hits Daily Double, 2/22), read a second time in the Senate and re-referred to the Judiciary Committee (2/21). The bill seeks to eliminate the music industry exception to the seven-year statute and declare all California residents equally protected under the Labor Code’s provisions.

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