The fight provides a revealing look at Griffey's private operations and how the $5.57-billion pop music industry operates. But the legal battle also highlights underlying racial tensions in pop music, where race plays a big role in how performers are categorized and marketed.
Vocal About Alleged Racism
The black community, concerned about whether blacks reap a fair share of the economic benefits of an art they create, is watching the suit closely. The recording industry, which revolves around issues of distribution and royalty payments such as those in dispute here, is also playing close attention.
Some critics complain that black performers are kept from a broader audience by being arbitrarily classified in the industry-created "black music" category. Griffey has been vocal about alleged racism in the industry for a long time. He has called for boycotts of black stars who don't use their clout to generate more work for black professionals in the record business. And he has complained that black concert promoters, sound and lighting companies, caterers and limousine services don't get enough work from big concerts.
"Music is the greatest natural resource in the African community, and the industry generates more dollars by and for African-Americans than any other single industry. Therefore, it is important that African-Americans who are successful in the music business return something to the community which helped them succeed," he said.
Griffey took aim at Warner in 1986, when he filed a $386-million lawsuit accusing the Elektra division, Warner Bros. Music and the parent company of a long list of wrongful actions against him. He claimed that in carrying out its part of the distribution agreement with Solar, Elektra "has deprived and prevented Solar and Griffey from the enjoyment of the same right in enforcing contracts, namely the distribution agreement, as is enjoyed by white citizens."
He alleged that Elektra "on an unlawful and discriminatory basis" failed to fulfill contractual obligations to adequately promote and distribute the works of Solar's black artists.
The undisputed fact is that Griffey initially borrowed $4.5 million from Elektra to build his company headquarters at 1635 N. Cahuenga in Hollywood. That debt later grew to more than $6 million to cover a short-term cash shortage, but Griffey's company repaid only a little over $1.6 million before stopping payments in 1986.
Elektra foreclosed on the office building--valued at more than $5 million--last fall, and is trying to sell it. But Griffey has filed a separate lawsuit in California state court, thus far blocking his eviction.
Griffey alleged in his 1986 federal suit that because the loan required him to post most of Solar's assets in addition to the building as collateral, it became a means for Warner to attempt to "expropriate" his business.
He complained bitterly that, because of the loan, Elektra "coerced, pressured and intimidated" him in 1984 into agreeing to disadvantageous amendments to the distribution agreement. He claimed that Elektra handled the promotion and distribution of Solar records in a manner designed to limit his income and failed to make certain payments due to him. Additionally, he claimed that Elektra "induced" Howard Hewett, the former lead singer of Solar's Shalamar group, to break contracts with Solar and sign exclusive pacts with Elektra.
He said Elektra took the action because it knew that Hewett, also a songwriter and producer, was one of Solar's most valuable assets. He also accused Elektra of trying to break other valued relationships, including one with The Deele, Solar's current star act.
Shortly after Griffey filed suit, Jesse Jackson called for a boycott of Warner products to demand parity for blacks in the record industry. But the boycott call was widely dismissed by many as a case of a politician trying to help a friend. Griffey is a close adviser to Jackson and has worked to raise money for the Jackson presidential campaign.
The boycott has had no apparent impact on Warner's record sales, although it is technically still in effect.
In its court response to the lawsuit, Warner has presented itself as the aggrieved party that got stiffed on a debt. Griffey's suit, Warner claimed in court filings, resulted "out of (Griffey's) sheer frustration with his financial problems and Solar's business failures."
Warner filed documents showing that Solar had led Warner to believe that Solar would pay back the loan by renting out part of the six-story office building. However, Solar didn't carry out that plan, Warner claimed. (Griffey said tax law changes made it impractical to make the investments needed to attract tenants.)