Last week, Kenny Rogers, gambler, chicken purveyor, filed a lawsuit in Nashville court against longtime label Capitol Records, citing a bunch of ways that the label has kept his rightful money from him, and, there's no better way to put this, screwed him over. That list has hit the net, and it's in full below.
Basically, Rogers started "auditing" his royalty payments with the label in 2007, and after two years, the label said they couldn't complete his audit. And Rogers has a bunch of allegations about Capitol not paying him as part of their settlement with Napster, not paying him for getting sold in Record Clubs, and charged him a mysterious $50,000 for no reason.
Here's the list in the lawsuit:
(1) In April of 2007, Kenny Rogers attempted to audit Capitol Records. However, because of a "purposefully complex and opaque royalty payment system," coupled with an inability to receive any documentation on digital sales, it took Rogers' auditing firm nearly two years to complete the process. "The accounting firm was unable to complete an initial audit report until March 9, 2009," the complaint read.
(2) That audit uncovered a number of payment issues, which Capitol Records promised to resolve in 2010. By 2011, Capitol told Rogers that they were "still ironing out a few things," then the two employees assigned to the issue left the company (most likely laid off).
(3) The case was then passed to an attorney, who told Rogers in January of this year that he would "promptly try to resolve the Rogers audit." It was not resolved, leading to the lawsuit.
(4) Capitol Records systematically put a portion of Rogers' royalties into a "suspense file," for reasons that were not articulated. Rogers only found out about this file through the multi-year audit.
(5) Capitol refused to share any settlement amounts from lawsuits involving Napster, Kazaa, Audiogalaxy, Grokster, or BearShare. The label also refused to share what those settlement amounts were.
(6) Capitol sold Kenny Rogers classics through record clubs, but did not pass those royalties on to the artist.
(7) Capitol Records provided inconsistent royalty statements to Kenny Rogers, based on the use of different royalty calculation and processing systems. One report would show royalties for certain albums in certain periods, while another report would not reflect those royalties.
(8) Capitol provided 'free goods' in foreign markets, but did not pay royalties on those freebies (as designated by the artist contract).
(9) Capitol charged Kenny Rogers for international taxes, even through they were receiving foreign tax credits.
(10) Capitol charged Rogers for 100 percent of video costs, even though the contract called for a 50 percent charge.
(11) Capitol charged more than $50,000 of inappropriate or mysterious expenses to the Kenny Rogers account, and never explained what these charges were.
(12) Capitol Records did not offer any accounting (or royalties) on foreign broadcasts.
(13) Capitol offered improper accounting on sales within a number of foreign countries.
(14) After the findings of the audit, Capitol did not implement any changes to fix the issues discovered.
Moral of the story? Watch out for majors, folks. [DMN]
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