Is Paul McCartney cleaning up on the Beatles catalog? While legal action on the Beatles front heats up, an attorney for the group’s label, Capitol/EMI, has confirmed that McCartney earns a higher royalty rate on Beatles records than George Harrison, Ringo Starr or even John Lennon (whose estate is represented by Yoko Ono).
This discovery came to light in the wake of two recent legal maneuvers involving the Beatles. In December, Yoko Ono, George Harrison and Ringo Starr initiated legal action against McCartney by filing a summons with the New York State Supreme Court. No explanatory papers accompanied the summons, and attorneys for both sides declined comment.
The purpose of such a summons is usually to begin legal proceedings without having to file a detailed lawsuit immediately. The action buys time for the parties filing the suit, because they no longer have to worry about the statute of limitations running out.
The summons is believed to be connected to a $45 million suit filed by Apple Records (recently joined by the three surviving Beatles and Yoko Ono) against Capitol/EMI, charging that from 1969 to 1979 the Beatles’ record company failed to pay millions of dollars in royalties to the band. The suit also asks that the group be released from its contract with Capitol.
One of the complaint’s principal allegations involves the John Lennon record Sometime in New York City. Under the terms of the agreement between the Beatles, Apple and Capitol/EMI, the Beatles were to have been paid a significantly higher royalty rate — 24 percent higher, according to Capitol — on all their records if the last two Beatles records (a term that includes solo LPs) released before August 31st, 1972, sold 500,000 each. Sometime in New York City did not sell 500,000 copies, and Capitol/EMI refused to pay the higher royalty rate. The Beatles’ complaint alleges that because Sometime in New York City was “a noncommercial, experimental double album” featuring performances by other artists (Frank Zappa, for example), it does not qualify as a Beatles record under the terms of the agreement.
In addition, an Apple audit asserts that in that ten-year period Capitol/EMI destroyed 19 million Beatles records. (Capitol/EMI would not confirm this figure.) The affidavit further claims that “the alleged ‘scrapping’ is a mere subterfuge for records that were sold without payment to plaintiffs.”
A Capitol lawyer termed the affidavit “egregious” and “unprofessional.” Apple Records attorney Leonard Marks said it will be another eighteen months before the case goes to trial.