IS IT ANY WONDER: “FOREVER” ROYALTIES?

IS IT ANY WONDER: “FOREVER” ROYALTIES?

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IS IT ANY WONDER: “FOREVER” ROYALTIES?

“Our favorite holding period is forever.”
Warren Buffett

 

 

 

In my opinion, the “professionals” are the “13th man” in music and entertainment and any stories relating to this group usually stands to be interesting. By that I mean that certain “professionals” (such as attorneys, accountants, and business managers), are really part of the “team” even though they don’t actually play or perform on it. (The “13th man” is a football phrase that means that the fans are so intense and influential to the game itself that “they” almost act like a “13th man” on the field. In basketball, the phrase is said to be the “6th man.”). Simply put, in music and entertainment an artist’s professionals can sometimes be just as important as some of the performers in the artist’s band.

As the many stories go, sometimes they are epic and sometimes they are tragic. However, it seems like a lot of the time they ironically seem to possess both traits.

For example, a recent and interesting take on this angle is Henry Bushnik’s Johnny Carson (2013). Bushnik was Carson’s attorney for 18 years and in his book Bushnik takes credit for getting Carson out of some bad deals early on in their relationship and then putting Carson into a much better place later on. As the story goes the pair’s relationship blossomed and it went beyond business dealings into a great friendship before it self-destructed years later. Nevertheless, Bushnik claims to have had a profound effect on Carson’s career in terms of enabling Carson to have achieved lucrative deals. In the end, the saga much represented a roller coaster going from the bottom to its highest point and then all the way back down to earth again.

Well, just two days ago a lawsuit filed in a Nevada federal court seeks to again test the limit of the relationship between the “professional” and the artist.

Susan Strack is the widow of Johanan Vigoda. Vigoda was an attorney and most of us know one of his clients; Stevland Morris. Morris is better known as Stevie Wonder. Vigoda began a professional relationship with Wonder in 1971 and according to the suit it continued until the day Vigoda died in 2011.

The suit claims that Vigoda had a “substantial” impact on Wonder’s career and that deals “went from oppressive (before Vigoda became involved in 1971), to Morris having among the most lucrative contract terms in the music industry.” Those lucrative deals, according to Strack, continued throughout the entire relationship between the professional (Vigoda) and the artist (Wonder). Strack points to the length of the relationship between Vigoda and Wonder (spanning 40 years) as a testament and endorsement to the quality of Vigoda’s services.

So here’s the rub. To memorialize their relationship Vigoda had various agreements with Wonder. These agreements spelled out Vigoda’s compensation for services rendered to Wonder. Obviously, Wonder is blind so when these agreements were prepared Vigoda had a witness read them to Wonder who then evidenced his agreement by marking it with his fingerprint. (The witness also signed the agreements).

The deal between Vigoda and Wonder called for Vigoda to receive 6% of revenues (royalties) paid to Wonder. This understanding was set forth in an agreement in 1971. In 1976 the deal was reaffirmed but this time it provided that the 6% would be for the benefit of Vigoda’s “heirs, assigns, and successors in interest.” According to the complaint it appears that this same language was essentially repeated in agreements from 1982, 1986, 1988 and 1992.

However, one key word was then inserted in the later documents—“forever.”

In other words, according to Strack’s complaint Morris and various publishers “agreed that Vigoda and his “heirs, assigns and successors in interest” were to receive “forever” six percent (6%) of the revenues.”

Strack claimed that for 20 months following Vigoda’s death the 6% amount was paid however, in 2013, Morris and various publishers (upon instruction from Morris) stopped the payments. Strack demanded payments resume however, she alleges she instead received an offer to settle which, according to her complaint, was “pennies on the dollar.” She then filed this lawsuit which seeks damages of upwards of $7 million dollars.

Well, you know where I am going with this one. Putting aside legalities which barristers will undoubtedly argue back and forth, the question is when is enough enough? I can see both sides to this argument; on the one hand the professional will argue that in large part the deal was his doing but on the other hand, the artist will ask when am I done paying? Read literally, does this mean that Vigoda’s entitlement will continue as long as Wonder’s? Can Strack now leave her entitlement to her heirs and this never ends? Is “forever” really forever?

Pondering these questions has really made me Wonder.

 

KEN “K BO” BIEDZYNSKI

Editor

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