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19 Recordings sue Sony Music for $10 million
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The company representing American Idol contestants such as Carrie Underwood, Kelly Clarkson and Jordin Sparks sued Sony Music for $10 million on Thursday over unpaid royalties. The lawsuit was filed in New York by British producer Simon Fuller's 19 Recordings, which brought the singing competition show to the US in 2002.
An audit was demanded by 19 Recordings and the singers who entered into deals with Sony because of their participation on American Idol and the lawsuit was filed after a review of Sony's books.
The main claim in the lawsuit was that Sony has underpaid some of Idol's best-selling artists by choosing royalty routes in lucrative streaming deals with Google, Apple and Spotify that benefit Sony, according to an article on Thursday in The Hollywood Reporter.
'We did not want to have to file this lawsuit, but Sony left us no choice, so this became necessary to protect our artists,' said 19 Entertainment's worldwide head of music Jason Morey to the trade publication.
As far as the streaming deals, the artists in their contracts receive 50 percent of royalties for 'transmission/broadcast' of their work and just a fraction for a 'sale/distribution.'
Sony has been counting all of the streaming sales through Google, Apple and Spotify as 'sales' instead of 'broadcasts' and depriving the artists out of their 50 percent royalty, according to the lawsuit.
The lawsuit alleged the discrepancy over streaming royalties has resulted in at least $3 million in damages.
Sony also was accused of improperly deducting money on television advertising campaigns from the royalties earned by artists.
The lawsuit alleged the improper deductions underpaid 19 Recordings by more than $800,000 during the audit period alone.
The plaintiffs also alleged they were unfairly charged for over-budget music videos without Sony providing information related to video costs.
The American Idol artists also were allegedly underpaid for their songs that appeared on compilation albums.
The lawsuit was seeking damages of at least $7 million and interest of $3 million.
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