#AmericanIdol Lawsuit Claims #Sony Stiffed #CarrieUnderwood and #KellyClarkson

 Newsflash from your Hollywood Attorney:

The legal claims from the company behind the hit reality TV show, seeking at least $10 million in damages, could ignite new controversies over whether recording artists are getting a proper share of digital income.

 New lawsuit filed on Thursday by 19 Recordings against Sony Music, the story of how the industry has leveraged American Idol into one chart-topper after the next is not without allegations of greed and corruption. The complaint filed in New York federal court and obtained by The Hollywood Reporter also explores some cutting-edge issues on the digital side of the business.

19 Recordings was founded by American Idol creator Simon Fuller and is now controlled by the show's owner, Core Media Group. In the lawsuit, 19, and by extension all of the artists -- including Kelly Clarkson, Clay Aiken, Carrie Underwood and Chris Daughtry -- who have entered into deals as part of their participation on Idol, claim that Sony Music has been systematically robbing them of millions of dollars in royalties. The lawsuit, seeking at least $10 million in damages, was filed after 19 exercised the right to audit Sony's books pursuant to recording agreements, and the parties couldn't come to any settlement.

Read Full Complaint Here... http://www.hollywoodreporter.com/sites/default/files/custom/Documents/ESQ/American_Idol_Clarkson.pdf

"We did not want to have to file this lawsuit, but Sony left us no choice, so this became necessary to protect our artists," says 19 Entertainment worldwide head of music Jason Morey. "Our complaint lays out the claims in great detail. Everything we have to say about the case is set forth in it."

Richard Busch at King & Ballow adds, "We have investigated this thoroughly and feel strongly about the claims."

Perhaps the biggest claim -- both monetarily as well as one that could impact record companies and musicians well beyond the Idol universe -- deals with the alleged underpayment of streaming royalties.

lawsuit says that Sony is accounting for the exploitation of master recordings here as "sales" or "distributions" rather than as "broadcasts" or "transmissions." The distinction might sound like semantics, but it is nevertheless important. By treating streaming music as sales, Sony is essentially saying that such deliveries are no different than downloads purchased on Apple or Amazon. And with that, Sony would be forking over significantly less money under the terms of the company's recording agreements -- the difference between a 50 percent royalty share for a "transmission/broadcast" versus a fraction of that for a "sale/distribution." The plaintiff says the discrepancy has resulted in at least $3 million in damages.

"Such exploitation can only be fairly described as 'transmissions' or 'broadcasts,' and, upon information and belief, are so described in the licenses or other agreements between Sony and the streaming services," says the lawsuit. "However, Sony has nevertheless accounted to 19 for all streaming income received at the lower Album rate as if the exploitation between the streaming service and the end user was described as a 'distribution' or 'sale' and, by so doing, Sony has breached the Recording Agreements."

The lawsuit then goes into other ways in which Sony is allegedly cheating on music from Idol alumni.

According to the lawsuit, "Sony's interpretation would lead to the absurd result of potentially allowing it the ability to conduct an unlimited number of TV and/or radio advertising campaigns in a given country for a particular Album without ever seeking 19's prior approval so long as each individual campaign, however limited, was within the specified required range."

The lawsuit says that Sony takes advantage by pretty much always delivering answers in its favor -- or, as the case may be, treating downloaded tracks as singles as much as possible. The plaintiff says this is unfair because there are no extra manufacturing, marketing or promotional costs associated with individual songs available for purchase separately. For its part, Sony claims that it has overpaid royalty participants on digital track downloads, according to the suit.

Source....hollywoodreporter

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