The Various Ways In Which Sony Music Screwed Weird Al Yankovic

‘Weird Al’ Yankovic is a multi-decade jester, and a staple of comedic pop.

Yet Yankovic has just filed a very serious lawsuit against Sony Music Entertainment claiming $5 million in unpaid royalties, based on a laundry list of complaints.

Like a growing pile of other artists, Yankovic wants Sony to pay a radically-different percentage on downloads by recategorizing them from ‘sales’ into ‘licenses’.  That remains somewhat controversial, as do claims related to YouTube ownership shares and demands for pieces of anti-piracy settlements (think Limewire, Bearshare, Grokster, etc.)

The rest just sounds like shady accounting.  And with that, here’s a list of some of the unsavory allegations, based on the filing in US District Court.

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(1) We begin with the audit.  The various contracts with Sony were signed through Ear Booker Enterprises, controlled by Yankovic.  The agreements gave Ear Booker the explicit ability to audit Sony’s books and accounting records to ensure proper payouts.

(a) On March 9th, 2009, Ear Booker finalized an audit and presented it to Sony with a list of problems and underpayments.  Sony promptly returned a document entitled ‘Weird Al Preliminary Audit Rebuttal,’ which showed that Sony had actually overpaid Yankovic $80,231 since July of 2003.

(b) Ear Booker produced an updated audit document several months later, which prompted another ‘Weird Al Rebuttal’ document claiming that overpayments were actually $38,112.  This back-and-forth process lasted nearly two years.

(c) The parties subsequently entered into a ‘tolling agreement,’ with the idea that issues related to the Audit would be worked out.  That agreement fell apart, prompting the lawsuit on a number of the audit claims, which include…

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(2) Yankovic alleges that Sony miscounted the number of items sold, and miscategorized those items.

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(3) Yankovic accuses Sony of improperly charging at least $8,061 in expenses to the video of “Close But No Cigar,” thereby deducting them from Yankovic’s payout.  Specifically, Sony double-charged expenses to John K Enterprises and Copernicus Studios.

(a) On top of that, Sony is accused of accepting a discount deal from Copernicus, but deducting the full amount from the Yankovic account.

(b) Sony is futhermore accused of reporting 100% of royalty earnings to John K, despite a contractually-agreed amount of one-third.

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(4) Sony is also accused of underreporting royalties on “Close But No Cigar” by $1,857.

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(5) Sony charged $79,908 in Audiovisual Production Costs for the “A1 TV VH-1 Special,” something Yankovic says does not fit into a contractually-agreed Audiovisual recoupable category.

(a) Moreover, all Audiovisual costs are supposed to be agreed upon by both parties prior to the charge, which did not happen on this ‘expense’.

(b) Ear Booker requested details on this charge, but was unable to obtain any paperwork.

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(6) Yankovic alleges that Sony improperly recouped non-recoupable “Normal Engineering Costs,” including $4,210 for mastering costs.  Further inspection shows these costs for were EQ on stereo and 5.1 mixes.

 

(a) Further inspection revealed that “Audioplus Video” costs of $1,511 were charged to “Normal Engineering Costs”.

(b) Even further inspection revealed that Sony charged $25,000 in “Battery Studios,” to the Yankovic account, even though these are non-recoupable “Normal Engineering Costs“.

(c) Sony ultimately admitted that $9,010 was improperly deducted from the “Normal Engineering Cost” bucket.

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(7) Sony charged the Yankovic account for $14,841 in charges that were not documented in the Audit (or ‘Weird Al Audit Rebuttal’).  That includes $4,500 for costs related to the ‘Ultimate Video Collection,’ without anything further detailed.

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(8) Speaking of the Ultimate Video Collection, Yankovic accuses Sony of improperly deducting amounts surpassing $34,813 on this commercial release.  That is, despite an agreement that disallows any deductions involving commercial video costs.

(a) In response, Sony claimed that these costs were actually promotional given that promotional videos were included in the Ultimate release, though Ultimate was a commercial release according to the filing.  Moreover, Yankovic alleges that costs related these promotional videos had already been incurred and deducted.

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(9) Sony admitted to improperly charging Weird Al Yankovic $10,497 in improper (and non-recoupable) ‘archive costs‘.

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(10) Weird Al Yankovic further accuses Sony of improperly charging $5,000 in independent promotional costs.  Sony claims that Yankovic was aware of these ‘marketing costs,’ though the parties agreed that all such costs needed to be put into writing first.  And, Yankovic asserts that his manager was not aware of these costs to begin with.

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(11) Yankovic alleges that Sony underpaid on domestic publishing charges by $67,334.  In its ‘Weird Al Audit Rebuttal,’ Sony admits that $1,134 of these were not paid properly.

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(12) Sony is accused of not paying any publishing royalties whatsoever on physical sales of Poodle Hat and Running With Scissors.   Sony claims that the royalties themselves were ‘capped,’ and that the ‘uncapped’ royalty amounts were paid to ‘uncontrolled publishers’ that were not documented or specified. Ear Booker claims that no uncontrolled publishers exist in this situation.

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(13) Yankovic found $7,725 in unpaid digital publishing royalties, of which Sony has admitted $1,134 was unpaid.  However, Sony claims that ‘negative publishing royalties’ of $3,690 on “Don’t Download This Song,” and has furthermore told Yankovic that the streaming services themselves should be paying any remainders.

There is no such thing as ‘negative royalties’ on streaming services, and streaming services do not pay major label artists directly.

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(14) Sony has not paid any mechanical royalties on ringtones leading up to March 1st, 2009, as retroactively mandated by federal Copyright law.  That $0.24 rate has resulted in underpayment of $189.

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(15) Ear Booker accuses Sony of refusing to produce any documents related to alleged undercounting of physical albums.  “Sony has refused to allow its inventory movement reports, unit distribution reports and sales system reports to be audited,” the lawsuit alleges.

(a) Yankovic subsequently made comparisons using Soundscan, resulting in an underpayment assessment of $93,593.  But without access to actual sales information from Sony, this merely remains an estimate.

(b) The same comparison produced an estimate of $63,235 in unpaid publishing income.

(c) Sony subsequently admitted that sales were underreported, according to the filing, but has declined to offer more specifics.

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(16) Also on digital, Yankovic claims non-payment on ‘FGD online/digital transmissions,’ though Sony has declined to produce any details on this potential revenue stream.  That includes any details related to its agreements with digital service providers.

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(17) Sony provided a ‘pending and unmatched‘ file, which Yankovic found incomplete.

(a) Sony subsequently admitted that payments for ‘Whatever You Like’ were accrued but not paid, and reports revealed discrepancies for digital video sales of ‘Amish Paradise’.  Specifically, Sony paid on 5,911 copies, though separate documents show that an additional 17,817 copies were actually sold (and unpaid).

(b) Ear Booker further alleges that Sony owes more than $10,000 in “pending and unmatched” publishing royalties.  Sony has admitted that $6,345 was not properly paid.

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(18) Sony claims that no synchronization income was paid on Australian usage of ’20 to 1,’ though a ‘significant amount of time’ has passed since those monies were to be collected.  Nothing of course was forwarded to Yankovic or Ear Booker.

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(19) Weird Al claims underpayment/non-payment of $35,527 in connection with the “Weird Al!” Live! VH-1 Special.  The complaint alleges that “little or no documentation” related to these payments or related expenses were provided by Sony.

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(20) Yankovic further claims that Sony failed to pass any money from its video licensing agreements with MTV and YouTube, and other video outlets.  The payment was $0, though Weird Al notes that much of those licensing amounts were attributable in part to his work and therefore demands payment.

Yankovic estimates that these underpayments totalled $300,000.

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(21) Sony received “service charge income” on Weird Al’s masters, an amount estimated at $10,000.  None of this was paid to the artist.

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(22) Sony deducted foreign taxes from the Yankovic account, even though these were offset by foreign tax credits.   Yankovic estimates this underpayment at $6,788.

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(23) Sony received numerous financial settlement awards from the likes of Limewire, Kazaa, Bearshare, Grokster, and Audiogalaxy, but none of those amounts were paid to Yankovic (or any other artist).  An accounting or disclosure on these amounts were not provided to Yankovic.

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(24) Sony negotiated an equity stake in YouTube, based on its promise to license its video content.  That includes several well-performing Yankovic videos, primarily ‘White and Nerdy,’ but Yankovic received nothing from these agreements.

(a) Yankovic estimates that the amount Sony owes him based on the legal settlements and YouTube share is $2,500,000.

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(25) Separately, Sony claims that it actually overpaid Weird Al Yankovic on mastertones, downloads, and various ringtones to the tune of $74,495.  Sony has stated it can recoup these amounts, against the objection of Yankovic.

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(26) And on top of all that, Sony frequently paid late.

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15 Responses

  1. Maxwellian

    No, no… there must be some sort of mistake. Sony usually does a much better job at screwing its artists.

  2. Mike

    Sounds like it’s time for Al to do a song about sony.

  3. @wordbabey

    Good article.

    This lists various revenue streams that smaller artists aren’t aware of.

    Learn!

  4. Dj Bizerk

    This is rediculous! In order to be a talented artist in this day and age you are looking to get controlled, lied to, cheated out of, and just plain manipulated into believing your getting over paid when you really getting under paid.

    Wierd-Al is a great talent, and all this legal crap that Sony is holding from him is just plain thievery… I support the Artist!

  5. RBMjr

    Love the graphics! Further, better get your Sony music will the getting is good. The Fregal music service allows free downloads from the huge Sony music library without any hassles.

  6. Visitor

    All musicians bookmark this page. Alot of stuff that can happen in the biz!