As details about a serious 2008 fire that destroyed hundreds of thousands of master recordings owned by Universal Music Group continue to emerge, the company’s SVP of Recording Studios & Archive Management, Pat Kraus, today issued a memo to the staff that Variety has obtained. The memo follows in full:
Today, I’m writing to you at the request of Sir Lucian following his note about the 2008 fire at NBCUniversal Studios to update you about the steps we have taken to provide our artists with transparency and answers as quickly as possible.
Since last week, we have taken the below steps:
- We’ve created a worldwide team of more than 30 people from UMG to work on this project;
- This group features highly skilled professionals including archivists, recording engineers, producers, developers and musicologists that will handle everything from receiving, logging and tracking requests to archival research, data analysis, A&R administration and asset retrieval;
- We’re bolstering those efforts with more than 40 outside professionals from Iron Mountain (our media storage partner) to work solely with us;
- This combined team of more than 70 professionals will be responsible for timely and open responses to artists about the status of musical assets under our care, as well as the extent to which certain assets were lost.
With this team in place and responding to requests as promptly as possible, I wanted to also remind you that, if an artist or their representative inquires about the status of archived assets, please immediately ask them contact me at [redacted].
We will continue provide you with updates.
The fire, which destroyed an estimated 500,000 master recordings by artists ranging from Billie Holiday to Nirvana, took place in a facility UMG had rented from NBC. Sources close to the situation have acknowledged that UMG’s management at the time was not entirely forthcoming about the extent of the damage.
Many artists have said they were unaware that their masters had been destroyed. Yesterday the New York Times published a long list of artists whose masters are believed to have been lost in the fire. Although UMG has acknowledged that the damage was devastating and many thousands of masters were lost, it has contested the extent of the damage claimed in the articles.
In the weeks since news of the extent of the fire’s damage broke, Universal’s chairman and CEO Lucian Grainge issued an internal memo stating that “we owe our artists transparency” and a rep for the company says it has had staffers “working around the clock” to assess the damage and keep artists informed.
However, late last week attorneys representing Soundgarden, Hole, Steve Earle and the estates of Tupac and Tom Petty filed a class-action lawsuit against the company, seeking some “50% of any settlement proceeds and insurance payments received by UMG for the loss of the Master Recordings, and 50% of any remaining loss of value not compensated by such settlement proceeds and insurance payments.” In a 2009 legal action against NBC over the fire, UMG reportedly valued its losses from the fire at $150 million.
UMG appears already to have been paid damages for the fire. “Even as it kept Plaintiffs in the dark and misrepresented the extent of the losses,” the lawsuit reads, “UMG successfully pursued litigation and insurance claims which it reportedly valued at $150 million to recoup the value of the Master Recordings. UMG concealed its massive recovery from Plaintiffs, apparently hoping it could keep it all to itself by burying the truth in sealed court filings and a confidential settlement agreement.” Although UMG did not own the facility, the lawsuit attempts to cast the blame on the music company by claiming it was aware of fire hazards in the building.
Despite the extent of the damage, a major-label attorney told Variety on Thursday that artists’ attempts to sue UMG over the fire faced a steep challenge, because contractually most if not all of the physical master tapes were the property of UMG — not the artists. For that reason, the company was under no obligation to inform effected artists about the damage, the attorney said. The ownership distinction here comes down to the difference between the master tape or hard drive as a physical object, which in nearly all cases is the property of the label, as opposed to the copyrighted intellectual property (i.e. the sound recordings) contained on that master.