A Must Read***

[bknot1]

Getting Inside the Ashanti Lawsuit
Why This $2.6 Million Royalty Dispute Will Have an Impact on Every Producer/Artist
Relationship Big and Small By Moses Avalon

It started out oh so innocently in 1997. Genard Parker, an emerging producer, completed the first demos for an unknown 16 year-old artist, Ashanti Douglas through his small Atlanta-based production company, T.E.A.M Entertainment.
He paid for them out of his pocket as a favor to her mother, Tina, whom he was dating. Men do all kinds of things to impress women. But they also
know that business is business. He had Ashanti sign a contract with Mom as guardian. Ten years later, Parker was suing the multi-platinum “hip hop
princess” for $2.6 Million in Federal court claiming he had not been acknowledged in any way for Ashanti’s success. I was his key Expert Witness.
The case settled quietly and with little media fanfare. The reason: part of the settlement terms required lawyers on both sides to refrain from speaking
to reporters except to say, “We are very pleased.” Aside from the fact that stifling the verbosity of lawyers is probably a public service, the reality I
observed was that neither side was anything close to “pleased” with the result. Nor was I. These events, filled with sex, lies, ego and greed, created case law that will impact producers and artists at all levels in odd, annoying ways for many years to come. This is especially true when one considers that emerging artists and producers sign sloppily drafted spec-deals that pay on the back end without considering that it might wind up costing far more than if they just paid for each other’s services up front. Here is the inside skinny on
what can and did go wrong at the super-star level. Within a few months after Parker completed his demos, a Sony affiliated production company,
Noontime, heard them and wanted to sign Ashanti. Excited by the prospects, Tina asked Parker to release her daughter from their deal so she could
trade up to Noontime, which had name-brand producers and a healthy hit-making track-record. She offered Parker a “go-away” package that included a percentage of the royalties on Ashanti’s future “Noontime recordings.” Being his girlfriend there were probably a few other perks. Ashanti left T.E.A.M. and took a six-figure advance from Noontime for recording several songs. But shortly thereafter, she bailed on them too. This time her trade-up was a keeper: Irv Gotti, and Murder Inc. With a combination of Noontime’s demos and his own, Gotti (who was not yet the star producer he was to become) got her a deal on Universal Music. The rest is history. She went on to sell
an astounding six-plus million units and won a Grammy. She was all of 19. Yet, despite the millions paid to her in royalties, Parker never got a dime, or
an once of credit for his role in the process. He eventually tired from years of Tina’s promises and filed a lawsuit claiming $600,000 in back royalties and another million or so in lost wages from not receiving the credit he felt he deserved. To pay his lawyers, Parker sold his old Ashanti demos to a foreign
label for a few grand; the ones featuring her performance without the benefit of well… more experience in the studio, we’ll say. Ashanti filed a counter-suit for releasing of the old demos. It was war. Now, it’s probable that Ashanti and Tina believed that they didn’t owe Parker. How many times do rising
artists leave former producers in the dust? More often then not. Plus, in this case, the contract specified remuneration only from “Noontime recordings.”
None were released. This seemed like a legal nobrainer. No matter, Parker’s legal team had a brilliant, and never-before tried legal theory to get Parker paid. If Noontime dropped Ashanti after using reasonable efforts to get her a record deal—so be it. No money for Parker. But, if she “quit” Noontime
before they had a chance to get her a deal, then quitting should not mitigate her obligations to Parker. Otherwise, every artist could weasel out of paying
their original producer—who contributes the most risk capital—simply by quitting their next deal. This unique argument, if successful, could impact
the entire artist development business. Many artists leap-frog producers as they climb the ladder, often leaving a wake of fledglings with little more
than “I knew her when” bragging rights. But, what if quitting a go-nowhere production deal meant artists were still indebted to their past producer(s)?
Parker’s recordings lead to Noontime. Noontime lead to Murder Inc. and millions in sales. Was there a financial link? Did Ashanti owe Parker even
though his recordings were only demos that never saw the inside of a record store and never heard by the UNI executives who signed Ashanti? Lawyers and judges laughed at first. But to everyone’s surprise, the jury agreed with this theory and based on Ashanti’s royalty statements awarded Parker $630,000. They confirmed that if the law rewarded Ashanti for skipping around town then future artists would be free to set up intermediate
“proxy companies” just to create severance from the person who put up the risk capital. Who then would ever invest in a new artist? (And we thought
juries were unsophisticated.) Unfortunately, Parker would end up seeing only
a fraction of the $630 K because another sloppy but common practice in the music business reared its ugly head. Pay attention to this next part:
Shocked at the jury’s award, the judge reduced the amount to $50,000—Parker’s out of pocket expenses. For the back royalties, he said Parker’s lawyers failed to show that the theoretical Noontime/ Sony album would have achieved the same results as the albums actually released through Murder/Universal. To get the other $600,000, Parker would now have to prove an odd hypothetical in a new trial: that had Ashanti stayed with Noontime/Sony she would have sold at least the same number of albums.


Here’s where I came in. Parker hired new lawyers, Latif Doman and Daryl Davis who in turn hired me to come up with an argument. I looked at sales reports from several of the top female R&B singers on both Sony and Universal that were marketed in the same time-frame: 2001-2004. What I
discovered surprised everyone, including myself. Artists of like type on Sony sold an astounding 270% more albums during those years. It could then be argued, if Ashanti was distributed by Sony, she likely would have sold about three times the volume of albums just as other Sony artists of her genre (Beyonce, Alicia Keys and Jennifer Lopez).
Parker could be entitled to over $1.7 Million in damages by this logic. This testimony would be devastating to Ashanti’s case. Despite the fact that Sony and Universal are essentially the Coke and Pepsi of the record business,
Ashanti’s lawyers, Alan Kaminsky and Bill Archer would, in order to invalidate my theory, try to argue the exact opposite—that the two companies are vastly different and incomparable. They would need to convince the court that just because Ashanti sold millions on one label does not mean that she would have sold millions on a competing label, even through the competing label’s track record is about three times better. Just one problem: they were unable to find a music business expert who would support this position
under oath. They managed to scrape up and pay a few former Sony executives to say that Sony didn’t think Ashanti had the goods and that is why they didn’t pick up her Noontime deal in the first place. But that testimony was deemed irrelevant and inadmissible by the judge. Without witnesses, Ashanti’s counsel would have to hope the jury would ignore my empirical testimony in favor of being star-stuck by Ashanti’s appearance in court; a strategy that has worked in other celebrity cases. Unfortunately for them, several of the jurors were involved with music professionally and probably not fans of “produced” pop acts. One was a studio owner, who was more likely to be sympathetic to Parker. Kaminsky & Archer needed an ace in the hole to keep me off the stand. Minutes before I was to testify, they played one. It turned out Parker, like many other small to midsized producers, had never properly incorporated. In Parker’s case, he had a service—whom he paid and had a receipt from—file the corporate papers. But they never did. In most states, Parker’s entire award would be tossed on this technicality. In California, you are not even allowed to mount a defense or file a claim if you are not properly incorporated. Although this was a tough bit of bad luck for
Parker, the reality is that few home-grown production “companies” go though the trouble of even trying to file for a proper business license. The time
and expense required, the annual fees and filing quarterly tax forms is a bit much for many who are just starting out. Most just do a DBA for about
$100. But this provides no real layer of corporate protection. Without a corporate entity Parker would be personally libel if he lost the counter-suit.
With the Achilles heel in Parker’s case exposed and Ashanti’s “Sony is different than Universal” argument looking more and more ridiculous, neither
side was in a position to gamble on a trial. They settled on the court house steps. Parker got money, but a number far south of what a verdict could have
brought him. Considering his recordings were just demos it’s still not a bad pay-day. Is there a lesson here? I suppose you could dub in the old morals: there is no free lunch; a free demo is rarely free—especially if you become a star. We’ve heard it all before. In this case, using a cheap filing service cost Parker about one million dollars (that’s $330,000 in contingency fees for the lawyers out there). And a free demo cost Ashanti & Tina far more than if they had just paid Parker for them out of their milk money. Life would be a whole lot easier if we all just did the right thing. Another breach of contract suit awaits the hip hop princess from her former manager, Linda Berk, who claims she’s owed millions in back commissions after helping Ashanti become a star. Can’t we all just get a song?

Moses Avalon is a top-selling author of music business books and educational tools and an artists’ rights activist in the US music industry. Visit www.mosesavalon.com

from http://www.royaltyweek.com/issues/RW_Current.pdf

 

[BillyBo]

i dont know the business, i'm not going to act like i do.....

but Ashanti may have stepped on Parker to get ahead, but it sounded like it was agreed upon at the time. then i was reading and it sounded like if she "quit" Noontime that she would "default" back to her previous producer - which i might be able to understand depending on the grounds that she left him in the first place.

so now dude wants all kinds of money because Ashanti made it big. so what. he didn't do the work, he made her a demo. she should pay him for that demo and that demo only. if the contract spoke of any future royalties, then of course that would be a part of fees owed as well. but this "she would have sold more w/ B than w/ A" .... that's horse crap and it's fishing for a payoff. YOU WERE A STEPPING STONE. get over it. dang.

cha ching.

 

[bknot1]

I just think that was a expensive Demo...

what it is he made the demo that got her heard and her mom(his girlfriend at the time) promised royalties from future records..cause i do beleive the songs on the demo got use for the album(just made a new track for it)..

but hey i wasn't there..LOLOL

here is a sample agreement with notes on it that been on the net for awhile..

ARTIST PRODUCER DEVELOPMENT AGREEMENT

AGREEMENT Made this _____day of _________20___ by and between John Doe hereinafter referred to as " PRODUCER " of 50 Music Square West Suite 201 Nashville, TN. 37203 and Mary and Bob Smith hereinafter referred to as the “ARTIST "

W I T N E S S E T H

In consideration of the mutual covenants herein contained, it is hereby agreed as follows;

1. Producer agrees to provide production services as an independent producer and the necessary studio facilities to Artist, for the immediate purpose of producing and exploiting a master demonstration record (“ master demo “) and for the further purpose of assisting in the development of the Artist's career.

Number 1. This is a demo in order to shop artist to other labels. The master demo can be turn into a master should a record deal develop.

2. Producer agrees to produce ( 3 or 4 ) songs on the recording Artist into a mixed, finished recording of each song, for a fee of $ _________ To be paid as follows, 50% of total amount of recording cost will be mandatory, the balance of $_______shall be paid by certified check on or before the recording session.

Number 2. The Fees will be based on 3 or 4 songs and is only the production cost. The producer in some cases waves his fee. It is mandatory to deposit 50% of the total due. When a producer calls the union players for a session, he is responsible to pay them. The deposit only shows that the artist is in good faith and is not taking advantage of the producer or his staff. The producer's job is to find material for the artist, booking the studio, securing musicians for the session that fits the artist style. The fees are paid for services rendered, "work for hire" and non-refunded. The producer does not pay for any production cost and does can not guarantee any success due to the very nature of the music business.

3. Artist and Producer ( parties ) agree to seek an exclusive artist/producer recording contract with a nationally distributed record company ( RECORDING CONTRACT ), providing for (a) a commitment of at least two (2) double-sided singles in the initial year and at least one (1) LP, or its equivalent, a year in not more than four (4) option years, and (b) a basic combined artist-producer royalty of not less than sixteen per cent (16% )of one hundred per cent (100%) of the retail selling price, subject to customary adjustments for tape, foreign, record clubs, budget records, container charges, etc.

Number 3 only takes place if the producer gets you signed to a label. If he does not get you signed, Castle Records may offer you a single record deal not less than described in number 3 above. The 16% of 100% of the retail selling price is subject to change as the music industry changes.

4. The parties shall share equally in all advances and royalties received under the Recording Contract, and under any alternate or substitute agreement. The shares shall be payable only after recoupment of all recording cost are paid to the artist or investors as described in paragraph 2, above of this agreement.

Number 4. If a label advances you and the producer a royalty ( Example ) $20,000.00 And your production cost is $6,000.00. The total amount that is divided in half is $14,000.00 between you and your producer, you would get your production cost of $6,000.00 plus $7,000.00 a total of $13,000.00 and the producer would get $7,000.00.

5. Artist agrees that producer will continue as Artist's Producer for the full term, including any exercised options, of the Recording Contract, and of any alternate or substituted agreements with respect to the Recording Contract.

Number 5. This section protects the producer. If the producer gets you signed he is entitled to stay on as your producer unless a mutual agreement is made between all parties at the signing.

6. Artist agrees to execute, at Producer's request, a Recording Contract which contain terms a and conditions no less favorable to the Artist than those set forth above.

Number 6. Applies to number 3 above. Should Castle Records offered you a record deal, it shall not be less than the percentage offered on the APDA.

7. In the event that Producer has not negotiated a Recording Contract within a period of ONE (1) YEAR from the date hereof, Artist shall have the right to terminate this contract by written notice by registered certified mail.

8 . The parties agree that the term of this agreement shall extend for the full term of the Recording Contract, as same may be extended through the exercise of options, and such term as extended of any alternate or substitute agreements. If an option is not exercised under any such agreement, the term of this agreement shall be deemed extended for an additional six (6) months for the purpose of obtaining an alternate or substitute agreement.

9. In the event that the parties are unable to obtain a Recording Contract within nine (9) months from the date of this agreement, Producer may authorize the release, on a regional or national basis, of any master demo produced under this agreement upon the minimum royalty and the participation terms of Paragraphs 2 and 3 hereof.

10. As to any composition written or controlled directly or indirectly by Artist which is recorded and released pursuant to the provisions hereof, Artist agrees to assign to producer a fifty percent (50%) undivided interest in Artist's interest in the copyright of the composition, as well as the sole and exclusive right to administer and protect both Parties, interest in the composition throughout the world, for the full life of the copyright. Producer will account to Artist, and pay Artist, semiannually within sixty (60) days after July 1 and December 31 of each year, fifty per cent (50%) of the net publisher's share actually received by Producer or its representative in the U.S.A. and remaining after deduction of writer royalties and other direct cost. If Artist is a writer of such a composition, Artist and Producer shall enter into a songwriter-publisher contract on the terms of The Songwriter's Guild minimum basic form contract.

Number 10. Only pertains to you if you are the song writer of the material being recorded. Because the producer has waved his producer fee or has out of pocket expenses. He shall administer at least 50% of the publishing rights of the song. This does not mean he will own any part of the writers rights. The writer maintains 100% writer and 50% Publishing. The Producer owns only 50% of the Publishing. If material is obtained by the producer, the material is owned by the publisher and the copyright owners of the material which has granted the producer the right to use said material as a master demo.

11. Producer agrees to be available for actual production services as an independent producer pursuant to this agreement. In the event of the Producer's disability or other unavailability for such services, any substitute for Producer must be mutually approved, which approval shall not be unreasonable withheld. The cost of any such substitute shall be charged against the participation of the Producer.

12. In the event of any unresolved controversy between the parties relating to this agreement, the parties shall submit the same to a single arbitrator for final determination under the then applicable rules of the American Arbitration Association in the city of Nashville, County of Davidson State of Tennessee, and judgment may be entered upon any such award in any court having jurisdiction.

Sometimes you have a misunderstanding between you and the producer. A lot of times this can be resolved by just talking it out. If not then the American Arbitration Association helps resolve the matter.

13. No breach of this agreement by either Party shall be deemed material, unless the other Party gives written notice of the breach by registered certified mail, and the recipient of the notice has failed to cure the breach within (30) days after the receipt of such notice.

A notice sent by registered certified mail, to the party that has a dispute. This puts the party on notice that he must respond and correct or cure the misunderstanding.

14 Producer shall account and pay royalties to Artist semiannually within (60) days after receipt from a record company pursuant to a Recording Contract. Receipts contemplated under Paragraph 9 above shall also be so accounted for.

Number 14. Pertains to artist that the producer was able to secure a recording contract.

15. Artist shall have the right to audit the books and records of Producer, no more than once annually, upon reasonable written notice with respect to all matters hereunder, Audits shall be performed during business hours at Producer's offices by certified public accountant.

Number 15 Pertains to money received by producer to share with artist from a record company or assignment.

16. Artist agrees that because his or her services are unique and extraordinary and cannot be adequately compensated for in damages, Producer shall be entitled to injunctive relief, in addition to damages, to enforce the provisions of this agreement.

17. Producer may assign its rights under this agreement, in whole or in part, to any subsidiary, affiliated or controlling corporation or to any other assignee, provided that such assignment shall not relieve Producer of its obligations under this agreement. Producer may also assign its rights under this agreement to any of its licensees, in the ordinary course of business, to the extent necessary or appropriate, in Producer's sole discretion, to implement the license granted.

Number 17. If the producer does not have the right to assign his rights, then it would be hard for the producer to solicit an artist to a label. However the person he assigns this to must honor this agreement.

18. This agreement shall be deemed made in and shall be construed in accordance with the laws of the State of Tennessee.

19. This agreement may not be modified orally and shall not be binding until it is signed by both Parties hereto.

IN WITNESS WHEREOF, the parties hereto have entered into this agreement the day and year first above written.

_____________________________________________ Date _______________

Artist Mary & Bob Smith

_____________________________________________ Date _______________

Producer John Doe

She offered Parker a “go-away” package that included a percentage of the royalties on Ashanti’s future “Noontime recordings.” .... Ashanti left T.E.A.M. and took a six-figure advance from Noontime for recording several songs. But shortly thereafter, she bailed on them too.

....If Noontime dropped Ashanti after using reasonable efforts to get her a record deal—so be it. No money for Parker. But, if she “quit” Noontime
before they had a chance to get her a deal, then quitting should not mitigate her obligations to Parker.

 

[bknot1]

this is another important part to read and pay attention to..

It turned out Parker, like many other small to midsized producers, had never properly incorporated. In Parker’s case, he had a service—whom he paid and had a receipt from—file the corporate papers. But they never did. In most states, Parker’s entire award would be tossed on this technicality. In California, you are not even allowed to mount a defense or file a claim if you are not properly incorporated. Although this was a tough bit of bad luck for Parker, the reality is that few home-grown production “companies” go though the trouble of even trying to file for a proper business license. The time and expense required, the annual fees and filing quarterly tax forms is a bit much for many who are just starting out. Most just do a DBA for about $100. But this provides no real layer of corporate protection. Without a corporate entity Parker would be personally libel if he lost the counter-suit.