Universal IS wiping unrecouped balances for heritage artists, say MBW sources

Photo: MBW

Earlier today, MBW raised a big question: With both Sony and now Warner confirming they are disregarding unrecouped balances for thousands of  heritage artists and songwriters, is a similar announcement coming from the world’s biggest music rights company – Universal Music Group?

If you’ve read MBW for some time, you’ll hopefully know that we have very good, very senior sources in the global music business.

And here’s what our very good, very senior sources are telling us today: yes, categorically, Universal is introducing a policy that will see unrecouped balances disregarded for eligible catalog songwriters and artists on its books.

This policy, we’re told, will be publicly confirmed by UMG in detail in the next couple of months, likely as part of a wider update on its Environment Social Governance (ESG) practices.

The significance of this news cannot be underestimated in terms of the seismic transformation of the music industry in the modern age.

Ever since streaming began to take off, many artists and songwriters have complained that they see low (or sometimes even no) regular royalties from major rightsholders – as these artists/songwriters are still paying off advance checks that they accepted decades ago.

With Warner’s announcement today, and Universal’s upcoming announcement (which both follow Sony Music Group‘s historic announcement last year), this situation is largely, finally being consigned to history.

In its announcement today, Warner Music Group detailed that, under its new policy, artists and songwriters who signed to WMG before 2000 (and haven’t received an additional advance since 2000), will have their unrecouped balances disregarded for go-forward royalty payments from July 1 this year.

Warner added that its unrecouped advances program will also “benefit other artist royalty participants such as producers, engineers, mixers and remixers”.

Last summer, Sony Music Group announced that it would no longer apply existing unrecouped balances to earnings for eligible songwriters and artists who were signed prior to the year 2000, and who hadn’t received advances since.

Warner Music Group is currently the only major record company to have sold the entirety of its Spotify equity, which it cashed in for $504 million in 2018.

Sony sold 50% of its Spotify equity for $768 million that same year.

Both Warner and Sony shared these proceeds with artists on their roster, though Sony disregarded unrecouped balances as part of that process.

Universal Music Group is believed to continue to own 3-4% of Spotify equity, a stake currently worth more than a billion dollars.

Universal has previously committed that – when it does sell its Spotify stake – it will share the proceeds with its artists, and disregard unrecouped balances as it does so.Music Business Worldwide