UMG staff memo details post-fire artist outreach

Fire on the NBCUniversal backlot destroyed more than 500k master recordings

Universal Music Group (UMG) is following up with their plans for being “transparent” to artists following a 2008 fire that destroyed hundreds of thousands of master recordings from their vast catalog after covering up the loss for more than a decade. Two weeks ago, the New York Times revealed that nearly 500 thousand master recordings were destroyed in a blaze that ripped through the NBCUniversal backlot storage facility they were kept in June 2008. The article named more than 100 acts that were affected by the blaze. Yesterday (June 26th), the Times unveiled a list of nearly 700 more artists that are believed to have lost masters in the fire.

The same day, Variety obtained an internal memo UMG’s SVP of Recording Studios & Archive Management Pat Kraus sent to staffers that explains the company’s plan to assist artists with answers.

“Today, I’m writing to you at the request of Sir Lucian following his note about the 2008 fire at NBCUniversal Studios to update you about the steps we have taken to provide our artists with transparency and answers as quickly as possible,” Kraus shares.

The memo continues, “Since last week, we have taken the below steps:

  1. We’ve created a worldwide team of more than 30 people from UMG to work on this project;
  2. This group features highly skilled professionals including archivists, recording engineers, producers, developers and musicologists that will handle everything from receiving, logging and tracking requests to archival research, data analysis, A&R administration and asset retrieval;
  3. We’re bolstering those efforts with more than 40 outside professionals from Iron Mountain (our media storage partner) to work solely with us;
  4. This combined team of more than 70 professionals will be responsible for timely and open responses to artists about the status of musical assets under our care, as well as the extent to which certain assets were lost.

“With this team in place and responding to requests as promptly as possible, I wanted to also remind you that, if an artist or their representative inquires about the status of archived assets, please immediately ask them contact me at [redacted].

“We will continue provide you with updates.”

The memo follows UMG Chairman and CEO Lucian Grainge internal memo last week to staffers stating, “Let me be clear: we owe our artists transparency. We owe them answers. I will ensure that the senior management of this company, starting with me, owns this.”

We have reached out to a handful of artists’ teams requesting comment on the situation, but are still awaiting responses.

Last week, Soundgarden, Tom Whalley on behalf of the Afeni Shakur Trust that oversees Tupac Shakur’s estate, Tom Petty’s ex-wife Jane Petty, Hole and Steve Earle filed a $100 million class-action lawsuit against the record company over the loss.

The plaintiffs are seeking to recover “50% of any settlement proceeds and insurance payments received by UMG for the loss of the Master Recordings, and 50% of any remaining loss of value not compensated by such settlement proceeds and insurance payments.” UMG reportedly valued its losses at $150 million during 2009 legal action against NBC for the fire in which they were paid.

At the time of the fire, UMG reps claimed their losses were minimal, but the lawsuit claims the company didn’t reveal the full extent of their losses for personal gain.

“UMG did not protect the Master Recordings that were entrusted to it. It did not take ‘all reasonable steps to make sure they are not damaged, abused, destroyed, wasted, lost or stolen,’ and it did not ‘speak up immediately [when it saw] abuse or misuse’ of assets. Instead, UMG stored the Master Recordings embodying Plaintiffs’ musical works in an inadequate, substandard storage warehouse located on the backlot of Universal Studios that was a known firetrap. The Master Recordings embodying Plaintiffs’ musical works stored in that warehouse were completely destroyed in a fire on June 1, 2008,” the lawsuit reads.

It continues, “UMG did not speak up immediately or even ever inform its recording artists that the Master Recordings embodying their musical works were destroyed. In fact, UMG concealed the loss with false public statements such as that ‘we only lost a small number of tapes and other material by obscure artists from the 1940s and 50s.’ To this day, UMG has failed to inform Plaintiffs that their Master Recordings were destroyed in the Fire.

“Even as it kept Plaintiffs in the dark and misrepresented the extent of the losses, UMG successfully pursued litigation and insurance claims which it reportedly valued at $150 million to recoup the value of the Master Recordings. UMG concealed its massive recovery from Plaintiffs, apparently hoping it could keep it all to itself by burying the truth in sealed court filings and a confidential settlement agreement. Most importantly, UMG did not share any of its recovery with Plaintiffs, the artists whose life works were destroyed in the Fire — even though, by the terms of their recording contracts, Plaintiffs are entitled to 50% of those proceeds and payments.

“Plaintiffs bring this class action on behalf of themselves and all similarly situated recording artists, and their heirs, successors or assigns, to recover (1) their contractual entitlement to 50% of any settlement proceeds and insurance payments received by UMG for the loss of the Master Recordings, and (2) 50% of any remaining loss of value not compensated by such settlement proceeds and insurance payments.”

Despite the many losses, a major label attorney tells Variety that the the lawsuit faces many challenges since the master recordings were owned by UMG and not the artists themselves. “The issue is: Who owns the thing that was lost? I can’t say there is no recording agreement in history that says the physical master tape is owned by an artist, but in the vast majority of recording agreements, it’s owned by the record company,” the attorney says. “So even if the copyright in the sound recording reverted to the artist, the physical master tape is different — in almost all instances, it’s owned by the record company, and even if the recording agreement didn’t specify who owns it, because it was paid for the record company there’s a very strong argument that the record company owns it.”

An unnamed financial analyst confers the attorney’s remarks, stating, “The harm was caused to Universal — the fire damaged their property. And if there are any artists whose [ownership of the masters] will revert to them in the next decade or so, they could try to seek some sort of compensation — but then I assume that in any successful claim there may be an opportunity for Universal to claw that [money] back from NBC, who owned the facility.”

Author: Buddy Iahn

Buddy Iahn founded The Music Universe when he decided to juxtapose his love of web design and music. As a lifelong drummer, he decided to take a hiatus from playing music to report it. The website began as a fun project in 2013 to one of the top independent news sites.

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