California’s Fair Act, Addressing Seven-Year Rule, Will Separate Issues of Musicians From Actors

Asilvero via Wikimedia Commons

The issue of predatory recording contracts, which can tie a musician up for longer than seven years, will be considered separately from its counterpart in the acting world, it was announced on Monday by a coalition of trade groups including SAG-AFTRA, Music Artists Coalition, the Black Music Action Coalition, California Labor Federation and Songwriters of North America. Assembly Bill 2926, known as the California Fair Act, was introduced on Feb. 22 by Assembly Member Ash Kalra and calls for more reasonable time limits in which a record company can exercise its agreement with recording artists, and that talent be able to terminate a personal services agreement once the time limit has been fulfilled, in addition to other issues related to working for multiple employers, contract renegotiation and additional artist protections.

In a statement issued on April 18, the groups said: “After many conversations with legislators and our label and studio counterparts, the artists and unions have agreed to bifurcate the two critical issues in AB 2926 (Kalra), the Fair Act. Although there are two issues, they both reflect an imbalance of power and equity, and one thing remains clear: they must be addressed. Recording artists must get reprise from one-sided, never-ending agreements, and actors must escape the exclusive holds that keep them from working when they want to work. The engagement and passion from the creative community makes it certain that these issues will not go away until there is a solution.”

The seven-year rule has a long history in the entertainment industry, dating back to Olivia de Havilland’s lawsuit against Warner Bros. in 1943. In 1987, the recording industry obtained a carve-out from the Legislature, which exempted performing artists’ record contracts from the rule.

That means that labels can sign artists to multi-album deals that may extend well past seven years. The labels argue that they take on heavy upfront costs to develop and promote artists, and they need the ability to reap the rewards when they become successful. But artists frequently complain about being locked into long-term deals.

The Music Artists Coalition, led by Irving Azoff, argues that the cost to develop acts has plummeted in the era of TikTok and SoundCloud.

“Streaming has been an unprecedented bonanza for the record labels, but not so for artists,” Azoff said in March. “We must protect artists and modernize this archaic law.”

The artists tried to have the provision repealed in 2002, but the effort stalled in Sacramento.

Related to the bifurcation, the statement continued: “The unions and artists will advocate passionately for these two vital bills. We look forward to continuing to educate the Assembly and the Senate about the need to address these pressing concerns. They are critical to the continued success of these industries in California. California succeeds when the artists and employers in our industries work together.”

In response to the latest development, the California Music Coalition, representing 20 record labels including all of the majors in opposition to the proposed legislation, issued its own statement.

It reads, in part: “As a music community, from artists and songwriters to labels and publishers and beyond, we share common goals. We succeed best when we work together towards those goals. The decision not to proceed is a positive step forward for everyone who values a thriving and united music community. … This legislation would have badly damaged California’s music community — harming most working artists and especially diverse, new, and emerging voices. And it would deeply erode the jobs that form the foundation of California’s music economy all across the state. Because of these harms, this idea has been rejected multiple times by California’s legislature over the last two decades.”

The California Music Coalition further encouraged the music community to “link arms to work together to find solutions that grow the music economy and create new opportunities for all.”