NEW YORK (CelebrityAccess) — On February 1st, Warner Music became the second major label group to announce that it was dropping its claims to unrecouped balances from eligible legacy artists.
The program, announced on Tuesday as part of Warner’s new Environment Social Governance Report, will see the label giant forego its claims to unrecouped balances from artists and songwriters who signed with WMG before 2000 and didn’t receive an advance during or after 2000.
Additionally, the program will also benefit other artist royalty participants such as producers, engineers, mixers, and remixers. It goes into effect for royalty periods starting July 2022.
Unrecouped balances occur when an artist takes an advance from a label for music which the label then makes up for by taking a percentage of artist royalties until the advance is paid off. That works in theory, unless the song in question does not generate enough revenue to pay the balance of the advance off, leaving a label with a seemingly permanent claim on an artist or songwriter’s royalties.
Last year, Sony Music turned heads when it announced plans to stop collecting their share of unrecouped balances from qualifying artist and participant revenue.
While Sony didn’t go so far as to zero the balances out or change recording contracts, but instead decided to just disregard the outstanding balances. Like Warner, Sony’s Artists Forward program was open to artists and songwriters who had not been paid an advance after 2000 and still had unrecouped balances
“Through this program, we are not modifying existing contracts, but choosing to pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music,” Sony said in a letter sent to artists in June when announcing the program.
According to Music Business Worldwide, Universal Music Group is also expected to join the other majors in adopting the change and is expected to introduce a policy that effectively clear balances for many heritage artists from the label’s ledgers.
Universal has not offically announced the program, but senior sources told MBW that the change in policy will be revealed in the coming weeks.