For Mike McKool, lead counsel for Quincy Jones in the veteran producer’s lawsuit against the Michael Jackson estate, the crux of the case came down to a definition of one word: royalty.
On July 26, a Los Angeles jury awarded Jones $9.42 million in damages (he sought $30 million), finding that the producer had been underpaid in royalties for music used in the “This Is It” documentary and two Cirque du Soleil — both successful projects that came after Michael Jackson’s 2009 death.
McKool argued, and the jury seemed to agree, that while the estate entered into a lucrative rearrangement of its deal with Sony Music — a joint venture in late 2009 — Jones was left out. And while the estate contended that the terms of the deal no longer dealt with sales and tangible recorded assets agreed upon with the original contracts Quincy signed — he produced three albums with Jackson: “Off the Wall,” “Thriller,” and “Bad,” between 1979 and 1987 — McKool says, “You can’t just change what you call it, or change the way you’re paid, and deprive the royalty holder.”
Following the decision, Howard Weitzman and Zia Modabber, attorneys for Jackson’s estate, commented: “While the jury denied Quincy Jones $21 million – or more than two-thirds of what he demanded — from the estate of Michael Jackson, we still believe that giving him millions of dollars that he has no right to receive under his contracts is wrong. … Any amount above and beyond what is called for in his contracts is too much and unfair to Michael’s heirs. Although Mr. Jones is portraying this is a victory for artists’ rights, the real artist is Michael Jackson and it is his money Mr. Jones is seeking.”
McKool, who is chairman of the firm McKool Smith, spoke with Variety the day after the verdict about the significance of the case’s outcome and what comes next.
Quincy Jones is receiving a third of the $30 million he asked for. Would you consider that a win?
The jury went our way on almost all of the liability findings. So we were super pleased with that. But to us, the main value in this verdict is that it legitimized the view that a royalty holder in the entertainment business cannot be deprived of royalties because the parties who owe that obligation decide to rearrange their relationship and [the way] money is flowing. The jury found that the joint venture funds were subject to Quincy’ss royalties — and that is important for him as a future income stream, as long as those immensely popular songs continue to be exploited.
How is it that Jones is entitled to royalties from remixes he didn’t do?
Because they didn’t give him the opportunity. Both contracts said that Michael Jackson will not allow anyone to do any remixes until [Jones is] given the opportunity. No one called, wrote, or gave him that opportunity — and Quincy has been doing remixes in the very recent past, up until 2016. So if you have an obligation like that, and you don’t fulfill it, you can’t get around it because he didn’t do [the remixes]. It was a complete failure by the estate — they were his productions of 29 songs and Michael would not have wanted someone else to be tampering with them.
Who is responsible for policing such payouts?
It’s the artist’s or the producer’s responsibility. They have audit rights. When somebody else is handling all the money, and making all the decisions, the only way to police it is to have auditors [who] take a period of time that’s as much as ten years and make claims.. Quincy’s had the same auditor for about 30 years.
Michael Jackson’s death in 2009 spurred a huge spike in his music sales. What did that mean for Quincy?
One of the obvious signs that all was not well was the change in the way Quincy was treated after Michael died. Our claims really went to that period. Upon the death of a superstar artist — like Prince or David Bowie or George Michael, and certainly the King of Pop — record sales, streaming and other license revenue went through the roof. The estate was able to use that, because Sony’s contract giving [the company the] right to distribute was about to expire — and negotiate a huge increase of the percentage of the funds that was going to the estate. That was the whole crux of our case: however Michael Jackson’s royalty was adjusted, Quincy’s royalty should be adjusted. The estate took the position, that since they didn’t get royalties anymore, that they got this enormous amount of JV profits that he was not entitled to share, he was only entitled to share under his original formula. That violated the requirement that, as the artist’s royalties are adjusted, the producer’s has to be adjusted. The jury clearly they found that this JV profit was just an increase in royalty called by a different name.
Do you think this will impact how recording contracts entered into decades ago are interpreted?
I think this decision will protect all royalty holders.
What happens next?
The defendants made eight motions for a mistrial, which is the most I’ve ever seen, so I would anticipate a motion for judgment notwithstanding the verdict. In other words, ignore the jury’s verdict and motion for a new trial. That would be par of the course for a case like this.
