In a decision that should make the record industry sleep easier, the British High Court of Justice ruled Tuesday that superstar George Michael cannot walk away from his contract with Sony Music Entertainment Ltd.
U.K. High Court Judge Jonathan Parker dismissed the 30-year-old singer's restraint-of-trade lawsuit in a 280-page opinion that characterized Michael's $12-million recording contract with Sony-owned Columbia Records as "reasonable and fair."
After the verdict, a Sony Music spokeswoman said the firm looks forward to continuing its relationship with Michael, who once vowed never to record for Sony again and said Tuesday that he will file an appeal as soon as possible. Michael, whose albums have sold more than 16 million copies in the United States alone, has not recorded for Sony since 1990's "Listen Without Prejudice."
"I am shocked and extremely disappointed," said Michael during a press conference at London's Hotel Howard moments after leaving the courtroom. "I am convinced that the English legal system will not support Mr. Justice Parker's decision or uphold what is effectively professional slavery."
The bitter 20-month legal dispute was closely monitored by the record industry because a victory for Michael could have set a precedent overseas, requiring companies to sign artists for periods far shorter than the now-customary seven years.
Although a favorable ruling for Michael in the British Court system would have had no legal bearing in the United States, insiders predicted that a pro-Michael verdict could have been used as grounds to raise the same issues for artists in U.S. courts.
Most record companies have gone to great lengths to prevent artists of Michael's stature from jumping ship--and reaction to the ruling among the industry's top brass on Tuesday was positive.
"I'm glad people are beginning to pay more attention to what it means to honor a contract," said Charles Koppelman, chairman and CEO of the EMI Records Group North America, a competitor of Sony. "From my vantage point as an executive, everybody enters into these deals with excellent representation and their eyes wide open, including the artist.
"When a company invests a tremendous amount of money in the development, marketing and promotion of a new artist and that artist succeeds, it's very difficult to deal with the idea that he suddenly no longer wants to be a part of your label."
The ruling follows a caustic court battle in which Michael's lawyers had argued that the huge Japanese conglomerate deliberately tried to sabotage the singer's career after he refused to appear in videos to promote "Listen Without Prejudice."
Michael originally signed with CBS Records as part of the pop duo Wham! When the act broke up in 1986, CBS exercised a clause in the contract and kept Michael on as a solo act. After Sony Corp. acquired CBS Records in 1988, the company renegotiated its contract with the singer.
The Grammy-winning singer, whose real name is Georgios Kyriacos Panayiotou, alleged that long-term contracts--like the eight-album deal he signed with Sony until the year 2003--constitute a restraint of trade.
At one point in the trial, the judge allowed Michael's lawyers to force Sony to produce the contracts of other stars such as Michael Jackson and Bruce Springsteen, but the pacts were not exposed to the public.
A judgment on whether Michael must foot the bill for a reported $4.5 million in court costs is expected later this week.
Sony resolved a similar lawsuit two years ago in Los Angeles when it settled out-of-court with singer Luther Vandross, who claimed his contract with the company had expired under an obscure California statute. Vandross remained with Epic Records, which is owned by Sony. Don Henley is currently involved in a similar legal dispute with Geffen Records.