Record label founder speaks out about royalty battle with Tame Impala

Modular chief Steve Pavlovic addresses the legal case for the first time

Steve Pavlovic, the founder of record label Modular has spoken about the ongoing legal battle between himself, BMG and Universal as a result of unpaid royalties relating to the band Tame Impala.

During Pavlovic’s time at the imprint, the label delivered bands such as Wolfmother, Cut Copy and Ladyhawke. But it is his involvement with Tame Impala that has earned him substantial media attention of late.

SEE ALSO: Tame Impala On New Album ‘Currents’: ‘The More I Explore, The More I Realise Boundaries Are Meant To Be Broken’

Having released two albums and with a third – ‘Currents’ – due to drop July 17, singer Kevin Parker revealed in April that he was owed a large sum of money from Modular. Parker explained: “Up until recently, from all of Tame Impala’s record sales outside of Australia, I had received zero dollars. Someone high up spent the money before it got to me. I may never get that money.”

Parker’s comments resulted in a lawsuit filed by BMG Rights Management against Modular and Pavlovic, the latter of whom accused of failing to honour his agreement with the band, with regard to royalties.

Pavlovic has now spoken publicly on the matter for the first time. He explained to Billboard how the situation “arose out of an unfortunate misunderstanding due to their being different ways of calculating and paying mechanical royalties in the US compared to the process we were used to in the U.K. and Australia. We didn’t realize that the different statutory process in the US required Modular to deduct and pay the artists’ mechanical royalties directly.”

Attributing the BMG lawsuit to a misunderstanding rather than foul play, Pavlovic went on to describe how Modular “were in amicable discussions with BMG about how we make good. Together we established that we needed an audit to work out exactly what we needed to pay. I’ve always offered BMG complete access to our distributors’ records for them to audit and identify exactly what is owed by Modular US”.

According to Pavlovic, proceedings became more complicated when “Universal / Interscope took over the release of the Tame Impala album Lonerism from June 20, 2013 and the rest of the Tame Impala catalogue from August 2014,” due to the matter of “establishing who owed what – sadly Tame Impala were caught in the middle”.

However, on June 19 UMA announced that court documents had been filed to dismiss the case against it and Modular from US legal proceedings. Speaking of the dismissal, Pavlovic confirmed that the two parties were “able to establish the payment actually due. Incidentally, my share is a fraction of what has been reported in the press. I believe with the sums now allocated to Modular and Universal the accounting can be settled quickly and therefore BMG are prepared to withdraw the case – In regards to Universal, I continue to hope for what I have always hoped for: a fair and equitable ‘divorce'”.

Speaking about the legal battle with Universal and the media’s representation of him throughout the lawsuit, Pavlovic said that it was his principles that “wouldn’t allow me to roll over just because I was one person in the face of a music behemoth. I’m a man prepared to stand up for what I believe in and I’d rather go to bed at night knowing I’m strong enough to do that.”

Pavlovic remains steadfast in this decision: “Losing the case is not nearly as bad as the feeling that would have come from not standing up for what I believe in.”

Regretful of Tame Impala’s treatment, Pavlovic admitted: “I’m sincerely sorry that Kevin [Parker] became caught in the middle of the Modular and Universal dispute – it’s an outcome I regret terribly,” but also cleared up rumours of non-payment: “Kevin has been the recipient of considerable international advances from BMG, Universal and Modular. Now that his international mechanical accounting has been resolved I remain committed to doing whatever I can to move my side of things forward as speedily as possible. I’ve obviously got a lot of regard and respect for Kevin and think he’s one of the most talented musicians I’ve ever had the pleasure of working with.”

Looking back on his career with Modular, the founder added: “I have no choice but to walk away from a company that I founded 18 years ago and that has had the opportunity and pleasure of developing both the domestic and international careers of artists such as Wolfmother, The Presets, Ladyhawke, The Avalanches, Cut Copy, Bag Raiders, Tame Impala, Sneaky Sound System and most recently Movement. I stand by those achievements – I took the risk and invested my own money to see them reach a broader audience. But at the end of the day that company was me. I created it. You can take me out of Modular but you can’t take the things that made Modular successful out of me.”

Remaining hopeful despite his separation from the label he founded, Pavlovic concluded by saying that “there will be more ventures”.

Tame Impala will play Bestival on September 11, before touring USA, Europe and the UK.
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