Sony Music Entertainment pledges to wipe unrecouped legacy artist debts

Thousands of artists who signed to Sony Music Entertainment before the year 2000 and did not recoup their advances will be eligible to profit from their recordings for the first time, under a new initiative proposed by the major label.

While Sony is not explicitly wiping artist debt, in order to account for any act who has reversion rights tied to recoupment, reports Music Business Worldwide, it has said it will pay royalties on sales and streaming to any act that has not received such payments since 2000, backdated to 1 January 2021.

A letter sent to artists on Friday said: “We are not modifying existing contracts, but choosing to pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music.”

A Sony spokesperson said it could not name the affected acts because of confidentiality agreements, but a source told the BBC it included “household names”.

The decision will particularly affect Black artists, historically subject to unequal treatment and unfavourable royalty rates by major record labels.

Artists who signed to the label before 2000 will also be able to receive royalties from streaming – a form of technology that did not exist when their contracts were drawn up.

The move is part of Sony’s Artists Forward initiative aimed at “prioritising transparency with creators in all aspects of their development”, and known as the legacy unrecouped balance programme.

Musician Rebecca Ferguson – who has been campaigning for music industry reform, including a parliamentary inquiry on artist welfare and treatment – hailed the move as “an amazing start”.

Tom Gray, founder of the #BrokenRecord lobbying campaign for the UK government to regulate the music industry, called it “pretty huge stuff even if it doesn’t go far enough. A major label accepting there is a problem and starting to do something about it.”

The issue of writing off unrecouped balances was raised during the recent parliamentary inquiry into music streaming economics. It is already policy at the Beggars Group labels 4AD, Rough Trade, Matador, XL and Young, which write off unrecouped debts on advances 15 years after the last record of a contract is released.

In June 2020, the music rights firm BMG pledged to address historic inequalities in its treatment of Black artists. In December, it published the results of the first stage of its investigation, reporting that it found a “statistically significant negative correlation between being Black and receiving lower recorded royalty rates” on four of the 33 labels in its catalogue, with the difference ranging from 1.1 to 3.4 percentage points.


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