×
You will be redirected back to your article in seconds

Universal May Try to Nullify Recorded-Music Deal With Prince Estate

UPDATED: When Universal Music Group announced in February that it had completed a recorded-music deal with Prince’s estate, one sentence stuck out. Not only would the company license the majority of the artist’s recordings since 1996, but also, “beginning [in 2018], UMG will obtain U.S. rights to certain renowned Prince albums released from 1979 to 1995” — the years that the artist was signed with Warner Bros. Records and released his most commercially successful recordings by far, including the “1999,” “Purple Rain,” “Parade,” “Batman,” and “Diamonds and Pearls” albums.

That sentence sent reporters digging through their notes, pulling out their calculators and hounding reps for both record companies. Prince had cut a new deal with Warner in 2014 that sources say garnered him the rights to the majority of his work released on the label (albeit with certain key exceptions). So how was UMG’s claim possible?

Ten weeks later, it turns out the deal may not be all it was cracked up to be. Sources say that representatives for the estate — including the estate’s initial, temporary administrator, Bremer Bank; Comerica Bank, its current administrator; and special advisers Charles Koppelman and L. Londell McMillan, the latter of whom led the recorded-music deal — may have misrepresented the terms of the Warner assets, and Universal may attempt to nullify the deal and seek a full refund of approximately $30 million. (The news was first reported by the Wall Street Journal.)

If that happens, the estate and Comerica — which this week named a new special adviser, Spotify executive and former Lady Gaga manager Troy Carter — will be forced to put the recorded-music assets back up for auction. (A source tells Variety it is possible that Universal could simply revise the existing deal for a lower price, but such an outcome is unlikely.)

Looming over the situation is the reality that Prince’s biggest hits are 25 to 35 years old and in many ways are rapidly losing value. “Every day these assets aren’t being exploited, that’s lost money that you’ll never get back,” one source says. “And the longer they’re tied up, the more you lose.”

Prince’s fierce efforts to gain control over his music further complicate the situation: As part of those efforts, he allowed many of his recordings to become unavailable — many of his albums are out of print, his music was unavailable on YouTube for years before his death, and in July 2015 he removed it from all streaming services except Tidal (it has since become more widely available). While those tactics may have tightened his financial control over his music, they also removed much of it from mainstream culture; millions of people are much less aware of his music than they might be, had it been more widely available.

Indeed, Koppelman alluded to an expiration date for the assets in a January interview. “Deals have a gestation period,” he said. “If you’re talking about Broadway or movies, even if you did the deal today, [the product won’t be ready for the marketplace until] two years down the road. How relevant will it be then? I’m not sure. The public grows up every day and the attention span doesn’t last forever.”

Given that scenario, a source tells Variety that all parties are seeking to resolve the matter as quickly as possible, and hope to avoid court proceedings that would tie up the assets for months or years. (Koppelman, McMillan, and reps for Universal, Warner and Comerica either declined comment or had not responded to Variety’s requests for comment at press time.)

In a statement released Monday, Carter said: “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.

“While the existing recorded music rights agreements were not overseen, negotiated or consummated by the Estate’s current team (which includes personal representative Comerica Bank & Trust N.A., Entertainment Advisor Troy Carter, entertainment attorney Jason Boyarski of Boyarski Fritz LLP, and the Minneapolis law firm Fredrikson & Byron, P.A. that serves as general counsel to the Estate), the team is nonetheless in the process of assessing all rights relating to Prince’s recorded music and continues to be dedicated to cultivating, maximizing and protecting all of the Estate’s intellectual property rights.”

One might well ask how such a situation could have happened, with two banks, two experienced music-industry advisers, two major record labels, a judge and multiple attorneys involved — even given the chaos surrounding Prince’s estate. The artist died suddenly of an accidental overdose on April 21, apparently leaving behind no will and his business affairs in disarray.

The problem, sources say, may lie in the complexity of Prince’s 2014 deal with Warner. That deal, negotiated by Warner Bros. Records chairman/CEO Cameron Strang, was struck as the rights to albums from Prince’s Warner catalog were becoming eligible to revert to him. (A 1976 revision to U.S. copyright law allows creators of intellectual property to reclaim ownership 35 years after a work is first released or published; the first of Prince’s 18 albums for the label was released in 1978.) The 2014 deal, for which Prince was represented by attorney and CNN commentator Van Jones, had different terms for certain albums: Warner retained the rights to soundtrack albums to Warner Bros. films — including Prince’s biggest-selling albums, “Purple Rain,” “Parade,” and “Batman “– in perpetuity. But the other albums were subject to varying terms, territories (Warner retains non-U.S. rights to most recordings in perpetuity), formats (digital vs. physical), and term lengths.

One source tells Variety that the complex terms of the 2014 deal would be easy to misrepresent or misunderstand if read quickly or cursorily.

Koppelman and McMillan signed on as special music-industry advisers in June and, with a January 2017 due date for the first installment of a $100 million estate-tax bill, quickly set to work securing the late artist’s music assets. In addition to updating the 2014 Warner pact (clearing the way for the November release of the Prince 4Ever compilation and a forthcoming deluxe edition of “Purple Rain,” both with unreleased tracks) and the Universal recorded-music deal, those include a publishing pact with Universal, performing rights with Irving Azoff’s Global Music Rights, and merchandising with Universal’s Bravado. Those deals also cleared the way for much of Prince’s music to be made widely available on major streaming services; from July 2015 until February of this year, Prince’s music was limited to the Tidal streaming service, via a deal made by the artist that is currently being contested by the estate.

Koppelman and McMillan’s arrangement as advisors to the estate, which sources say netted them a 10 percent commission on each deal, ended when Bremer voluntarily stepped down as administrator. However, McMillan remains deeply involved, as he represents four of Prince’s six likely heirs (although his representation of one of them, Alfred Jackson, is disputed by another attorney); Van Jones represents two.

While the Universal deal gave the company rights to most of Prince’s non-Warner material as well as the hundreds of unreleased recordings in his much-vaunted “vault,” sources say the company was far more interested in the proven hits from the ‘80s.

This latest development suggests that the legal battles around Prince’s estate will become even more tangled and complex in the months and years to come.

More Music

  • Nancy Matalon

    Spirit Music Group Names Nancy Matalon VP of A&R, Announces Additional Hires

    Publishing company Spirit Music Group, which recently saw a $350 million recapitalization, has made some key staffing moves. Nancy Matalon, a veteran A&R executive who’s worked wit the likes of Fergie, Jennifer Lopez, Public Enemy and Echosmith, among others, has been appointed vice president of A&R. In addition, Spirit has promoted Melanie Santa Rosa to [...]

  • Little Shop of Horrors review

    Off Broadway Review: 'Little Shop of Horrors'

    With its strains of kitschy doo-wop and its sci-fi B-movie inspirations, the quaint 1982 musical “Little Shop of Horrors” hardly seems a thing of modern-day revivalism, even despite its touches of S&M. Yet this year alone, not only is there an Off Broadway production of the blackly comic “Little Shop” featuring Jonathan Groff of Netflix’s [...]

  • BBC's Little Mix Talent Show to

    BBC's Little Mix Talent Show to Be Produced by Management Firm's New Shingle, ModestTV

    The BBC has confirmed its Little Mix talent show, which the pop band’s management firm, Modest!, will produce through a new banner, ModestTV. “Little Mix The Search” will be exec produced by Andrea Hamilton, who has partnered with the management outfit to launch the new operation. Her entertainment show credits include “The Voice” and “Strictly [...]

  • NORTH HOLLYWOOD, CALIFORNIA - OCTOBER 15:

    Midland Turns L.A.'s Dormant Palomino Club Into a Honky-Tonk Brigadoon

    Would it be too much to ask Midland to give up its burgeoning-country-star status and move west to become the humble house band at a newly reopened Palomino club in L.A.? It doesn’t seem a lot to beseech for a good cause, however unlucrative it might be for the group’s fortunes and fame. The famed [...]

  • LOS ANGELES, CALIFORNIA - OCTOBER 16:

    Idina Menzel, Bebe Rexha Take the Stage for Justin Tranter's 'Beyond' Benefit Concert

    We’re here, we’re queer and we’re writing your favorite songs was the theme of Beyond, the third annual benefit concert that Justin Tranter and his CAA agent, Jenna Adler, organized to benefit GLAAD at the Sunset Room in Hollywood on Wednesday night (Oct. 16). Beyond a music showcase, its mission is to highlight the annual [...]

  • Taylor SwiftMTV Video Music Awards, Arrivals,

    Vivendi's Third Quarter Results Up Nearly 17%, UMG Still Rising

    Vivendi saw its third quarter revenues increase by 16.7% to €3.97 billion ($4.4 billion) compared with the third quarter of 2018, once again boosted by the growth of Universal Music Group, while Canal Plus Group remained stable. For the first nine months of 2019, Vivendi’s revenues reached €11.3 billion ($12.5 billion), an increase of 14.6% [...]

  • Parliament-Funkadelic and George ClintonIEBA Annual Conference,

    George Clinton, Bootsy Collins, Sheila E. to Perform in ‘Grammy Salute’ Airing Friday

    Parliament-Funkadelic stars George Clinton and Bootsy Collins, along with Sheila E. and many others, perform in the “Grammy Salute to Music Legends” airing as part of PBS’ “Great Performances” series Friday night. The show, the fourth annual all-star concert offering a primetime spotlight for the Academy’s 2019 Special Merit Awards recipients, premieres nationwide Friday, Oct. [...]

More From Our Brands

Access exclusive content