[With this article Cosmik Debris begins a series that will delve into many issues that face musicians trying to make it in the music world today. What kind of deal can one expect from a major label? What kinds of tricks are they notorious for pulling? How can the pitfalls be avoided? During this series we will present many voices and many points of view. We begin with music attorney Dina LaPolt, who sheds light on a very nasty practice that must be examined and done away with ASAP.]

The 7-Year Rule and What Does that Really Mean???

It means, "Indentured Servitude" and here's why...

[Pictured: Don Henley]
FACTS: The California Labor Code Section 2855 (written 56 years ago, mind you), states that anyone working under a personal service contract cannot be held to that specific contract for more than 7 years. BUT in 1987 record companies secured an amendment to the Labor Code that excluded recording artists from this law. Why??!! Because there is no union for recording artists (only AFTRA for vocalists and AFM for studio musicians), and until the Courtney Love lawsuit and Recording Artists Coalition headed up by Don Henley and Sheryl Crow, the voice of the recording artist was not heard in congress. Record labels, through the shrill and shrieky voice of the RIAA (Recording Industry Association of America), were able to run amuck over recording artists because most recording artists never had any money or power.

RESULT: If an artist tries to "jump ship" after 7 years (i.e., tries to leave her record company to go to another record company before she turns in all records under her recording contract), then under the 1987 amendment, the record company can sue her for all undelivered records left under her record deal. (However, as a practical matter, all the major record companies are "in bed together" and not one of them would even attempt to sign an artist until the artist's previous record company gave the new record company the "green light"). So ... if you haven't figured it out yet, most record deals go on ... and on ... and on ... and on ... for a lot longer than 7 years. The old time Hollywood movie studio business of tying up an actor for life (which died 50 years ago) is still alive and well in the music business. Here's how ....

INDUSTRY CUSTOM: The custom in today's music industry is that record companies ride out successful albums for as long as they possibly can before accepting "new records" from its artists. Why would a record company want to dump millions into a new record which may compete with the old record that is still selling 20,000 units a week? The answer is: They don't. The 1987 Labor Code Amendment specifically allows record companies to tie artists up for more than 7 years by allowing record companies to define a "year" as a "record." Accordingly, most record companies require 7 records from its artists before the recording contract is over. However, how many artists do you know that release 1 record per year? The answer is: None. In today's music world, record companies never accept new records every year from its artists. Instead, record companies will only accept new records every 2 to 3 years. Take for example Alanis Morissette's blockbuster debut, "Jagged Little Pill." This album was on the market for over 3 years before her record company "allowed" her to start recording another record. At least Alanis is successful ... what about the artist who isn't?

[Pictured: Courtney Love]
Thankfully, Senator Kevin Murray (D-Culver City), has been chairing a series of hearings in the California State Legislature which analyze the contractual rights and music industry practices; many of which are completely unfair to recording artists who, virtually, have no bargaining power as a new artist getting signed to a record company. These hearings, along with Courtney Love's lawsuit against Universal Records, and the efforts of the Recording Artist Coalition are only a series of efforts by artists and their representatives in an attempt to change the way the music industry does business.

Some illustrations of past artist efforts are as follows:

In 1979, Olivia Newton-John sued her record company (MCA) alleging that her deal was only for a 2 record commitment with 3 additional options for 1 year each. You and I (and Olivia) thought this was 5 years right?? Well, the courts sort of agreed and since 1979 the record companies have made sure that each "contract year" is defined by the "delivery of a record" instead of a 12 month period. As a result, most recording agreements state something like "each contract period" will end somewhere between 9 to 18 months "after delivery of the last record required for that period." Sneaky huh? So much for Olivia trying to help. Thanx Olivia.

Years ago, Frank Zappa wanted out of his deal with Warner Bros. Records, however, Frank still had to turn in 4 more albums before his deal with Warner officially expired. So, Frank recorded over 45 songs and walked in to the president of Warner Bros. Records and basically said, "Here are my next 4 records ... I'm done." Guess what happened? That's right ... record companies added a new provision in their recording agreements. That provision states that an artist "cannot start recording a new album" until somewhere between 6 to 9 months "after the release of the last album delivered." So much for Frank's help as well...

As you can see from the illustrations above, the more artists try and change things, sometimes it gets worse! So, what can you do to make it better for yourself while everyone else is out running around trying to get the laws changed??!! Answer: Make sure that you understand each and every issue that will come up in the negotiation of your record deal so you can make educated decisions. Remember ... the first 5 pages of a recording contract will give you everything and the next 95 pages of the agreement will slowly but surely chip it all away unless you understand the loopholes. The more you know, the more you'll make.

[Pictured: LeAnn Rimes]
Recently, LeAnn Rimes went to California's State Capitol Building and testified in one of Senator Murray's hearings. "When I was 12, I was thrilled to sign my record contract with Curb Records, and at that age I didn't understand everything that was in my contract," Rimes told state senators. "I just turned 19 in August 2001 and if I record at the rate of 1 record every 2 years as industry custom mandates, I will be 35 years old before my contract is over." Although LeAnn had a music lawyer who negotiated her record deal, how much bargaining power does a new artist really have?

According to prominent music lawyer Owen Sloane, who represents the likes of Steve Winwood and matchbox 20, "it is a fallacy to believe that all new acts have no leverage. When an artist is the subject of a bidding war, they have enormous leverage in terms of an agreement." Sloane further states, "an artist's representative sometimes misuses that leverage to extract large advances from the record companies rather than negotiate better royalty terms or other contract provisions that then become the subject of a dispute when the artist is successful and advances are no longer important."

Well, I agree with Owen Sloane. I tell all my artists, "You will never get rich off an advance." In this industry, knowledge is power and the more an artist knows about the business of music, the better off that artist will be. Take a doctor for example... a doctor knows everything about all types of illnesses and medications just as a history teacher knows about all the world's history not just history related to the United States. So ... as a recording artist, you must know about the music business not just the music.

NEW ARTISTS BEWARE: When you are negotiating your record deal, you only want to be tied to that label for the shortest amount of time possible to allow for either (i) re-negotiation of the deal if the you are successful or (ii) leaving that particular record label if the record company is not putting your records out or marketing your music successfully.

How many musicians and artists do you know that have said, "We signed a 7 record deal with so and so ... isn't that cool??!!" Your reply should be, "Not very cool." What they probably don't know is that their record deal is probably the last record deal that they will ever sign because it will probably go on for over 15 years of their career! Very simply put ... If you sign a record deal with a record company and the record company shelves your records stating that they are "not commercially or technically satisfactory" ... then you are STUCK! You cannot go to another label and you cannot make your record company release your albums unless you had a very smart lawyer who negotiated a "guaranteed release clause" in your recording agreement (which means that the record company is obligated to release your records within a certain period of time or your recording agreement expires!). Although this concept sounds good ... it is very rarely given to a new artist unless that new artist has some degree of "clout."

TIPS FOR THE NEW ARTIST GETTING SIGNED:

1. Make sure you have a music lawyer. You do not want a criminal lawyer or your Uncle Jim (who is a real estate lawyer) to negotiate your record deal. Just as you would not want a music lawyer to represent you in a drunk driving incident or a real estate transaction (you will surely wind up in the clink or lose your house if you do...).

2. Make sure you understand what your music lawyer will be talking to you about. For a complete understanding of the music industry and recording agreements you must read the book entitled, All You Need To Know About the Music Industry by Donald S. Passman. This book will be your bible to surviving in the music industry. [Ed. Note: Pick up the book at www.amazon.com.]

3. Have realistic expectations. It took 4 years for the Alicia Keyes record to come out and RCA would not release Wild Orchid's record even though they were on a world wide tour with Cher. Just because you sign a record deal does not mean that you are going to sell millions of records and be famous. Signing a deal is only the beginning.

[Look for another article in this series from Dina LaPolt in the next issue of Cosmik Debris Magazine.]


[Pictured: Dina LaPolt]
*Dina LaPolt is a music lawyer in Los Angeles, California at LaPolt Law, P.C. Her clients include the Estate of Tupac Shakur and Afeni Shakur's record label, Amaru/Interscope Records; Ed McMahon and the "Ed McMahon "Next Big Star" television show; the Outlawz and Outlaw Recordz, Inc.; Victoria Silvstedt, and Jasmine Guy, among others. In addition to practicing law, she is a panelist at various music conferences across the United States such as South By Southwest in Austin, Texas, Eat Em' Music Conference in Las Vegas, Nevada, and NEMO in Boston, Massachusetts. Dina is also an author and contributor to the Matthew Bender Music Law books, she has a Bachelor's Degree in Music, and sings and plays guitar in all girl band called, "Trophy Girl."

To contact Dina LaPolt and to find out more about her firm, please log onto the firm's website at LaPoltLaw.com.

[Disclaimer: The opinions expressed in this article are those of the author and do not necessarily reflect those of the publisher and editors of Cosmik Debris Magazine. This is also not to be taken to mean Cosmik Debris is not in agreement. This very same disclaimer will run with every article and interview in this series, no matter what view is being presented.]