BMG Review of Historic Catalog Finds Black Artists Paid Lower Royalty Rates at Four Labels
BMG's review found four of its acquisitions paid Black artists below the level of non-Black acts on those respective labels.
BMG has issued the results of a study examining the historic royalty payments and rates of 33 labels and imprints acquired between 2008-2019, as part of the company’s initiative to ensure its artists are treated fairly and that Black artists are paid royalties on par with their label mates. BMG’s review found four of its acquisitions paid Black artists below the level of non-Black acts on those respective labels.
BMG said the 33 labels in question have 3,163 recording artists, of which 1,010 (32%) are Black. Fifteen labels had rosters that included both Black and non-Black artists, and for 11 of those imprints, there was no evidence of racial disadvantage, according to BMG. But four of those labels showed a “statistically significant negative correlation between being Black and receiving lower recorded royalty rates — a difference BMG said ranged from 1.1% -3.4% lower than non-white artists, apparently.
Furthermore, BMG said it applied the same methodology to the more than 800 recording agreements the company has negotiated with artists outside its acquisitions since the company launched, and it found “no negative correlation “between lower recorded royalty rates for Black artists across those deals.
Trending on Billboard
BMG said its methodology and analysis were verified by external auditors. The entire project, which was led by BMG COO Ben Katovsky, took in the analysis of thousands of artist royalty accounts and millions of lines of data.
“Since before the dawn of rock ‘n’ roll, virtually all pop and rock music has its roots in Black music… yet music’s history books are littered with tales of discriminatory treatment of Black musicians,” BMG CEO Hartwig Masuch said in a statement. “It is time for the music industry to address its past. Making good on our commitment to search for racial disadvantage in our historic acquired recorded catalogs has been an enormous and highly complex task. We have learned a lot and there is still more to discover. We will act on this knowledge.”
BMG notes that it represents a relatively small share of Black music history, particularly in the US. Consequently, BMG sends out an industry wide invitation to other record labels with substantial catalogs of Black music to undertake a similar review of their catalogs in order to establish the scale of racial disadvantage across the record business as a whole.
“We invite other labels to join us in this mission – to turn the promises and hopes of Blackout Tuesday into action,” Masuch added in a statement.
Upon completion of the review, BMG said it shared its findings with industry stakeholders, including clients, lawyers, managers and industry organizations, including the Black Music Action Coalition.
“We welcome this initiative by BMG and believe if all other labels were to follow suit, this could be a game changer for Black artists throughout the industry,” BMAC co-chairmen Binta Niambi Brown and Willie “Prophet” Stiggers said in a statement supplied by BMG to Billboard. “We cannot fix what is wrong if we do not investigate and hold ourselves accountable for whatever the results may be.”
BMG said the overall project was a huge undertaking. “We stand by Black artists and we recognize the pain many feel about their history,” Katovsky said in a statement. “We acknowledge that the totality of the Black music experience cannot be captured in a numerical study, but we wanted to forensically address racial disadvantage in its most tangible form – the payments artists receive from their labels. Our focus was to establish if there were differences in royalty rates which could only be explained by skin color. While difference is not necessarily evidence of bias, there were instances of differences that are significant enough that they warrant closer attention. We will follow this through to its conclusion.”
Moreover, the study revealed that regardless of race, the legacy recorded catalogs acquired contain a number of decades-old artist contracts which the company says are now inappropriate. BMG said it will bring forward measures shortly which will benefit the lowest paid recording artists across all of its catalogs.
“While these legacy contracts may have been entered into willingly, are fully legally enforceable and we paid the previous owners full market value for them, we feel we can do better,” Katovsky said in a statement. “We will shortly bring forward proposals designed to do just that.”
Beyond these actions, BMG previously said it would stop imposing the controlled composition clause which allows labels to discount publishing rates to its artists who write songs for their own albums. Moreover, a few years back, it eliminated old-school standard clauses from digital formats like packaging and breakage allowances deducted from royalties.
While BMG says it has reviewed 33 “historic acquired” record labels, that apparently include labels that used more than one imprint to issue records. Meanwhile, acquired labels still operating, like Broken Bow Music Group which fields Broken Bow Records, Stoney Creek Records, Wheelhouse Records and Music Knox Records, according to that label’s websites; RBC Records and Rise Records were not a part of the historic review but are likely included in the examination of the contracts of the company’s current roster. According to the BMG website, since 2008 its historic acquired catalogs include Strictly Rhythm, Sanctuary Records, Skint/Loaded, Vagrant, Union Square, Rise Records, World Circuit, and the catalogs — but not the labels of — Mute Records and Cheyenne Records. Besides those 10 labels and catalogs, BMG refused a request to enumerate what other imprints were included in the review.