Universal may seek a $30 million refund from Prince estate over recordings deal
Universal Music was feeling well smug earlier this year after securing all three of the big deals that had been put on the table by representatives of the Prince estate: getting the rights to rep the late musician’s songs repertoire, his brand and merch business, and much of his recordings catalogue too. Though, sources say, execs at the mega-major are becoming less keen on the latter of those deals now that they’ve had time to dig into the detail.
Under the recordings deal announced in February, Universal got control over all of Prince’s albums released since 1995, the vault full of Prince recordings never released, and some of the musician’s pre-1995 records at some point in some territories, principally the US. Reports suggested that the deal was worth about $30 million to the Prince estate.
While there is likely years worth of new material in the as yet un-navigated Prince vaults, Universal would have priced the deal in no small part based on the rights it was securing to represent the late musician’s big hits that pre-date 1995. That part of the deal was complicated because of Prince’s existing agreement with Warner Music. And, according to the Wall Street Journal, there are more complications than the mega-major realised.
Having famously and spectacularly fallen out with Warner Music, his original label, in the 1990s, Prince announced a new deal with the mini-major – now under new ownership and new leadership – in 2014. Under that deal, Prince gained ownership of a stack of copyrights in his recordings that had previously belonged to the record company.
Warner partly agreed to that return of rights to secure Prince’s official involvement in a big reissues campaign. But the record company also didn’t want the musician to test in court if and how the reversion right of American copyright law – that lots of aging songwriters are now using to reclaim song rights they previously assigned to music publishers – applied to sound recordings and record deals.
The copyright transfer element of that 2014 deal is seemingly rather complicated, with Warner retaining the rights in some recordings outright (mainly the soundtracks) and in others beyond the US, where the reversion right would not have applied.
It’s also thought that the rights in different albums revert at different times, and that the licences concurrently granted to Warner for some of those records also run for different time periods, with terms sometimes different for physical releases versus digital platforms. Warner may also have a veto on the exploitation of previously unreleased material in the vaults that was recorded while Prince was signed to the major back in the day.
Sources say that Universal has now discovered that the complexities of the Warner deal put more limitations in place over Prince’s most famous recordings than it realised when doing its $30 million deal. That has led to rumours that certain Universal execs are now accusing the Prince estate of misrepresenting what recordings were available and when.
Since the Universal deals have been done, there has been a change of management at the Prince estate, with Comerica Bank taking over from the Bremer Trust on administration duties, and former artist manager and Spotify exec Troy Carter taking over as industry advisor from L Londell McMillan and Charles Koppelman.
McMillan, a former attorney to Prince, had hoped to carry on advising the estate, but was blocked by some of the musician’s heirs, who wanted Van Jones – who negotiated that complicated 2014 deal with Warner – to do the job. Carter, who was only appointed last week, is presumably a compromise candidate.
His first task in that new part-time advisory role was to oversee the issuing of a non-statement about all the gossiping that was occurring in relation to the Universal deal, in the wake of the WSJ article that claimed the major might ask for its $30 million back.
That statement, issued yesterday, read: “The Prince estate is currently focusing on exciting new opportunities in all areas of entertainment and intellectual property, and looks forward to further preserving Prince’s rich cultural legacy. With respect to Prince’s recorded music rights, the estate has no further comment regarding inquiries relating to the contractual arrangements governing those rights”.
It added: “While the existing recorded music rights agreements were not overseen, negotiated or consummated by the estate’s current team, the team is nonetheless in the process of assessing all rights relating to Prince’s recorded music and continues to be dedicated to cultivating, maximising and protecting all of the estate’s IP rights”.
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