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Dixie Chicks, Sony End Feud With a New Deal

June 17, 2002|CHUCK PHILIPS | TIMES STAFF WRITER

Less than 10 months after accusing Sony Corp. of "systematic thievery," the Dixie Chicks signed a lucrative new pact with the Japanese conglomerate that may be announced as early as today, industry sources said.

After filing suit against Sony last year claiming breach of contract, the Nashville trio went public with its complaint, crusading for artists' rights at fund-raisers and griping to lawmakers about greedy record corporations taking advantage of naive artists.

The Dixie Chicks' management team, the Firm, capitalized on that position as a negotiating tactic and was able to forge a new pact Friday with an estimated $20-million signing advance, industry sources said. The pact requires that the musicians reimburse Sony for about $15 million from record sales before collecting royalties. In addition, the trio's managers and lawyers are expected to reap fees estimated at $3 million, or about 15% of the $20-million transaction, sources said.

Sony agreed to significantly boost the Nashville trio's royalty rate to about 20%, sources said. The next Dixie Chicks CD, "Home," due out Aug. 27, will be the first release on the trio's own Wide Open Records label, which will be distributed through Sony's Columbia division and its Nashville Monument arm. Any records released on the new label will be marketed and promoted through Sony.

Representatives for Sony and the Dixie Chicks did not return calls seeking comment.

The Dixie Chicks--Emily Robison, Martha Seidel and Natalie Maines Pasdar--have sold nearly 20 million albums, generating more than $175 million in revenue for Sony since 1997. The Grammy-winning trio, which signed a seven-album deal with Sony in 1997, is one of the most popular and commercially successful recording and performing acts in the world.

The singers are the latest superstars to sue their label only to back down after receiving a fat advance. Among those who have threatened legal action are Don Henley, Luther Vandross and Beck.

A breach-of-contract case involving rock star Courtney Love and Vivendi Universal is scheduled to go to trial this week but is likely to be postponed. The judge has requested that Love and Vivendi resolve the matter out of court. Over the last few weeks, the two parties have been working to settle the suit.

The Dixie Chicks' fight with Sony erupted in July 2001, after the trio sent a letter notifying the corporation that the act would no longer record for Sony. Sony responded weeks later by suing them, alleging it was owed damages for five undelivered albums, the value of which the company estimated at more than $100 million.

A month later, the music group countersued, accusing Sony of engaging in "systematic thievery" to "swindle" recording artists out of royalty earnings.

In their suit, the country-pop singers said Sony cheated them out of more than $4 million by underreporting sales figures and overcharging for company services. Sony's "fraudulent accounting gimmicks" were uncovered, the suit said, during an audit, financed by the singers, of the company's financial records.

The singers said they caught Sony trying to hide money from them with bogus accounting tactics on 30 separate occasions since 1997.

At its core, the performers' suit called into question the "unconscionable" terms that young artists are required to accept when signing a standard industry recording contract. Like most entry-level artists, the trio had no bargaining power when its first contract was drafted, the suit said, allowing Sony to treat its standard offer as nonnegotiable.

Sony officials dismissed the Dixie Chicks' allegations as a "sham" attempt to escape its record contract.

"We refuse to sit back and silently endorse this behavior simply because this is a 'standard' practice at Sony," the Dixie Chicks said the day after filing their suit.

Within months, the singers had joined the burgeoning artists' rights movement, lobbying legislators in Sacramento to evaluate recording contracts and industry accounting practices. The trio also appeared at a concert benefit in February to raise funds for the Recording Artists Coalition, a nascent trade group comprising 100 top-selling acts seeking reforms in the music business.

Behind the scenes, representatives for the Dixie Chicks met with EMI Group and Bertelsmann Music Group to shop for a new deal based on a new model involving smaller advances, larger back-end royalties, fewer deductions and more-transparent accounting methods.

Unable to strike such a pact with any of Sony's competitors, they quietly returned to the negotiating table with the Japanese conglomerate in April, sources said.

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