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“We are unwilling in any form or fashion to let the damages provision stay.”
——RAC attorney Jay Cooper
RAC RAP: ARTISTS COUNTER ALTSCHUL PROPOSAL
Coalition Considers RIAA Seven-Year Statute Compromise Effort
The worm has turned again in the Recording Artists Coalition/Recording Industry Association of America faceoff over California Labor Code section 2855, otherwise known as the seven-year statute.

RAC attorney Jay Cooper responded Monday to RIAA rep David Altschul’s officially sanctioned compromise proposal for amending the statute. Revisions to the statute are currently before the California legislature in the form of Sen. Kevin Murray’s SB1246, which seeks to eliminate the “damages clause” for recording artists and establish that employees in every industry are equal under California law.

In his response, Cooper outlines two points. The first, concerning the damages clause, which allows labels to sue for lost profits if an artist vacates a contract after seven years without delivering the agreed-upon number of albums, states firmly that the artists do not intend to negotiate on the issue. “This is the whole basis of our dispute,” Cooper writes. “We are unwilling in any form or fashion to let the damages provision stay.”

However, one new wrinkle appears to be the idea that money advanced by a label to an artist for an album or albums might be refundable if the artist doesn’t deliver the product within seven years and chooses to walk: “We are perfectly agreeable to the notion that any advances made during the term for term albums should be returned 100% if the artist exits the agreement…without delivering those specific albums,” Cooper’s response states. “We are not trying to walk out on money that has been paid to artists without providing the corresponding service.”

Point number two involves the notion of tacking, or re-setting the seven-year clock when a deal is renegotiated. “Although difficult, we are willing to once and for all agree to some form of tacking,” Cooper states, seeming to signal that the artists, some of whom were known to object to the concept, have come to terms on the matter.

However, the artists are now demanding that tacking only be allowed if a renegotiated deal meets certain conditions, and it’s a safe bet that the labels will have a counterproposal of their own for these. Of any new deal that re-sets the seven-year clock, Cooper says, “It must be a substantially different and new deal that includes substantial royalty and advance increases, the reversion of masters as well as being non-cross collateralized.”

The California Senate Judiciary Committee, which last month held an informational hearing on music business practices as it considers SB1246, has asked both sides of the seven-year issue to try to reach a compromise position before the Committee takes further action.

While such a position may not yet be completely hammered out, the good news, at least, is that the two sides are talking.

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