UMG Refuses to Share 2008 Fire Insurance Money With Artists — Says It “Doesn’t Belong to Them… Period.”

Universal Music Refuses to Pay Artists a Cut of Its Fire Insurance Payout - "It Doesn’t Belong to Them"
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On November 4, a lawyer representing Universal Music Group (UMG) told a federal court that artists had no right to an insurance settlement relating to the 2008 fire that destroyed many master recordings.

In response to the fire at Universal Studios Hollywood, which is said to have destroyed 100,000 music recordings and other media, a number of artists, such as Soundgarden, filed a class action lawsuit against UMG, alleging that the company did not properly store and protect the recordings.

In a complaint filed this summer in federal court, the artists insisted that UMG kept the recordings in a warehouse that was “a known firetrap.” They further insisted that the company failed to inform them of the loss.

UMG believes that the recordings only belong to them. In August, UMG first tried to get the court to dismiss the lawsuit. They said that it was “lawyer-driven” and that they had no obligation to provide the artists with any part of the settlement.

In Monday’s hearing, Scott Edelman — who is representing UMG in the case — went a step further.

He told U.S District Judge John A. Kronstadt that the company is the sole owner of the recordings. He also said that the contracts the artists have with the company stipulate that they receive money only through royalty payments and not through insurance claims.

“Artists have specified rights to royalties,” he said. “Everything else doesn’t belong to them. Artist don’t have an interest in the masters. Period. Full stop.”

Edelman went on to say that the fire did not impact the ability of the artists to release new remastered recordings or collect royalties from them. He mentioned that Soundgarden did just this back in 2015.

Mark Hatch-Miller, who is representing the artists, told the court that the case was not about insurance recovery but “negligent storing” on the behalf of UMG, which they insist was aware of the warehouse’s substandard conditions.

10 Responses

  1. Rabbi

    Wait so the lawyer for UMG said the artists should re-record their masters and profit off of them? That’s a great idea than UMG wouldn’t get a dime. That’s exactly what they should do.

    • Wendy Day

      As someone who has been advising artists to do this for decades, I do have to say that re-recording songs doesn’t always create a better song. Sometimes as the voice ages it changes, and the studio vibe can be different. That doesn’t mean the artist shouldn’t re-record—they absolutely should. They just need to understand it won’t be exact and there’s beauty in that.

    • Bobongo

      Horseshit! UMG was totally negligent in storing precious properties. Sadly assholes tend to be employed by large firms. They haven’t got a clue about obvious dangers like fire. So they collect their wages while sitting on their asses, doing nothing. Meanwhile others precious possessions are destroyed by fools such as these!

  2. Sam

    Just like artists weren’t given proper compensation in the early 2000s when digital companies handed over hundreds of millions in advances for streaming and downloads. Beyond Shady

  3. Anonymous

    Seems to me that UMG broke fire safety codes, and they should be punished for that by local law enforcement in the form of fines or whatever the penalty is. I imagine that’s already happened. That said, I think for the most part, UMG may be right. Labels typically own the masters. Unless there is some contractual provision saying that UMG must store their own masters in a safe place, I don’t think the lawsuit is going to work.

    • Rabbi

      They don’t own them indefinitely. Masters revert back eventually. The physical copy of a master itself is worth money to a collector. Forget the music value. Imagine going on eBay and seeing the physical studio recording of Thriller.

      With that being said Universal probably doesn’t own the artists anything and they should take UMGs legal advice and re-record their masters.

  4. Aussie Jack

    When they come knockin don’t let them in
    Remember this is how the caretakers treat us
    It’s time to take names
    Shun these common THIEVES post crash
    NEVER sign your rights away

  5. Tony

    This case provides an unusual opportunity to redefine and enhance property rights at interest. Creative assignors of intellectual rights almost always receive the legal acclamation of an unwanted bastard stepchild by corporate assignees. Every beneficiary of a destroyed master recording, in that fire, has been irreparably harmed.

  6. Jill Steinman

    Coming from someone who clearly has never been offered a deal. It’s true that signing your rights away for whatever period of time is counterproductive in the long run, it sure puts some immediate money in your pocket. Everyone’s situation is different.