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Sony Pays $8 Million to Settle with Allman Brothers, Cheap Trick

Artists wanted half of net receipts on downloads

March 9, 2012 11:00 AM ET
cheap trick
Robin Zander of Cheap Trick performs in Birmingham, United Kingdom.
PA PHOTOS /LANDO

Sony has paid a $8 million settlement to a group of musicians including Cheap Trick, the Allman Brothers Band and the Youngbloods, ending a five-year dispute over digital music revenue. A filing by the attorney in the class action suit on Wednesday reveals that the company will pay its artists a total of $7.95 million to resolve claims in the case, and the musicians will see a 3 percent bump in their royalty rates with respect to digital income.

Most of the money  in the settlement will go to artists who have sold at least 28,500 total downloads in Apple's iTunes store, though a small fraction of the cash has been set aside for artists who have not sold well in the format. $2.5 million from the settlement will cover legal fees. 

Photos: Random Notes

Artists eligible for this suit were signed to the label between 1976 and 2001 and have contracts with clauses stating that they receive 50 percent of net revenue for licensed music. A lawsuit on behalf of Eminem last year set a precedent that digital sales count as a license rather than a traditional sale, as is the case with LPs and CDs. A number of other artists, including Peter Frampton, Toto, Public Enemy and Kenny Rogers, are also pursuing similar legal battles hoping to score unpaid royalties and improve their rate in the future.

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