• Donny Willis

ARE THEY PLAYING FAIRLY? The War on Record Deals is Reignited by Artists and Managers

Azoff is leading the charge once again, this time with the Music Artists Coalition, an activist organization he co-founded with Henley, Maren Morris, and manager Coran Capshaw in 2019. The Black Music Action Coalition (BMAC), Songwriters of North America, and SAG-AFTRA are all part of the campaign. (The bill also contains a clause that requires TV production studios to exercise an opportunity to extend a contract within a year of an actor's work on a previous season.) The Recording Academy and the Future of Music Coalition have also shared their support for the initiative.

The bill was scheduled for a vote on April 22 before the California State Assembly's Committee on Labor and Jobs, but it was removed from the calendar the day before and will now be considered in January 2022, Gonzalez tells Billboard, to allow lawmakers more time to study the issues.

“We've been trying to get the supporters and opponents to speak about some of the issues quickly, then involve the group and encourage the creatives to have a voice and talk about some of their issues directly with some of the members,” she says. COVID-19 limitations, however, slowed the process, so Gonzalez chose to postpone the hearing, and AB 1385 is now a two-year bill.

Although labels are flush with streaming dollars, artists and managers are pushing for change. According to the Recording Industry Association of America (RIAA), the recorded music industry in the United States is now worth $12.2 billion, up 9.2 percent since 2019 and 82 percent in the last five years. Although the law will face fierce resistance from record labels, the inevitable debate will provide an incentive for artists and promoters to highlight other problems with recording contracts, such as the more favorable cost structure of a streaming industry that does not have production or distribution costs.

Representatives for creators believe that social concerns should frame this discourse as well, particularly at a time when artists of color often dominate the streaming charts and the Black Lives Matter movement has brought attention to issues of racial inequity. BMAC co-founder/co-chair Prophet, who manages Asian Doll and Money Marr, says, "This country is in a different position than it was 19 years ago." “It is that energy that can be used to power the engine that is needed to alter this particular law.”

Many of the same artist organizations lobbying for this bill collaborated with the Recording Industry Association of America (RIAA) and the labels it represents earlier this year to successfully lobby for a music-industry exception to Gonzalez's AB 5 legislation, which restricts the use of independent contractors. After determining that Gonzalez was sympathetic, artists' organizations continued to collaborate with her on the FAIR Act. “We received phone calls after the bill was introduced,” says Mitch Glazier, chairman and CEO of the RIAA.

If the bill passes, it "might make a label think twice about signing a California artist," according to Glazier. And without a way to recover damages, “the whole business model” that allows labels to invest in unproven actions would collapse. (According to label sources, only 10% of acts make enough money to support the other 90%.)

Artist managers claim that their acts should be handled similarly to athletes and actors under California law, although the RIAA and labels argue that such a distinction is inappropriate for artists who split their time between recording and touring. “If you're a professional athlete, you're contracted for a certain number of seasons. Filming [a series] can take a certain amount of time if you're an actor,” Glazier says. “An artist is asked to make an album and then supposed to tour, and the more the record sells, the longer the tour will be.” Setting contract terms based on time rather than productivity, he claims, is bad for both parties and takes control of the artistic time clock away from the artists.

There are other topics to consider. According to artist supporters, the way labels count the number of albums delivered is obsolete, making it difficult for artists to meet their contractual obligations. Prophet claims that mixtapes, which weren't previously considered album releases since they were promotional, now produce sales on streaming platforms but also don't "count against your contribution." Caron Veazey, a fellow BMAC board member and artist producer, tells the same thing about guest appearances and soundtracks. The FAIR Act does not answer these concerns, but managers claim it will allow artists to leave or, more likely, renegotiate their contracts. "Let's take a look at those bits," Veazey says.

(Avenged Sevenfold, Metallica, Henley, and Courtney Love have contested the current law by suing their labels to stop paying the fines set out in it, and Warner Bros. Records sued Avenged Sevenfold when the rock band attempted to quit after seven years while still owing albums.) Those cases were all resolved without going to court.)

If passed, the FAIR Act will benefit artists who have been signed to a label for at least seven years and have probably experienced some level of success during that period. (By then, most major labels have dropped artists that aren't profitable.) Acts who perform well, on the other hand, typically renegotiate their contracts well before they expire, earning better terms in return for adding more albums to their existing contracts. This legislation would give artists more bargaining power as it makes it easier for them to quit.

If the FAIR Act passes the Labor and Employment Committee next year, it will go to the State Assembly's Committee on Arts, Entertainment, Sports, Tourism, and Internet Media for a second hearing, followed by a hearing before the Appropriations Committee. If the bill passes all three panels, it will be voted on on the assembly floor, and if it passes, it will be sent to the state Senate.

Gonzalez hopes constructive negotiations between both sides will take place about the "pretty complicated problems" now that the process has been extended by eight months. “Obviously, we don't legislate very much in the entertainment industry, so these are all new ideas for many of my colleagues, and I want to make sure they fully grasp the viewpoints before voting.”