Sony Music is being sued by American Idol winners including Carrie Underwood, Kelly Clarkson and their label 19 Recordings who say that the company's equity stake in Spotify sells them short. The music giant offered an interesting and, to artists, a rather damning defense.
Responding to a lawsuit by distributed label 19 Recording and its artists including Carrie Underwood and Kelly Clarkson over Sony's deal with Spotify, Sony Music said that it is not contractually required "to structure its affairs in whatever way yields the greatest royalties for 19."
According to the plaintiffs, Sony , which has an equity take in Spotify has "significant power to exert control over Spotify in order to not only dictate how revenue will be paid, but wrongfully and in bad faith divert money from royalties that must be shared to other forms of revenue that they can keep for themselves."
Sony says its their right to cut deals any way they want to.
Share Money From Lawsuit Wins With Artists?
Sony Says, No Way.
Artists also do not share when Sony or other major labels win a lawsuit against infringers, like they did with Limewire. Again, Sony's responds with a legal "Who cares, we don't have to!"
"Because no royalty provision required SME to share settlement revenue recovered 'on a general or label basis,' SME was free 'to retain the full amount of any settlements such suits yield,"
Read the full complaint below via the Hollywood Reporter