Sony Music Entertainment to waive debts for thousands of artists

Acts who signed to the label before 2000 and have yet to repay their advances will be able to earn royalty payments for the first time

Sony Music will pay royalties from streaming and other revenue streams to thousands of artists who signed deals with the label before 2000 and have yet to recoup their advances.

The major label reportedly sent out a letter to artists today (June 11) announcing the new policy change, which is part of a new initiative called “Artists Forward”.

While the acts’ existing contracts will not be modified, Sony will instead “pay through on existing unrecouped balances to increase the ability of those who qualify to receive more money from uses of their music”.


Some artists never make enough money to repay their advances, sometimes due to the royalty rates set out for them in their contracts. It’s an issue that has particularly affected heritage Black artists and, last summer, US artist manager and attorney Ron Sweeney called on major labels to “zero out their unrecouped royalty balances and let their royalties flow to them so they can support themselves”.

Sony’s new policy will pay royalty earnings retroactively from January 1, 2021 to “eligible artists and participants globally who signed to SME prior to the year 2000 and have not received an advance from the year 2000 forward”.

The balances will still remain on the record company’s accounts to help keep track of an artist’s reversion rights, according to Music Business Worldwide. Reversion rights allow acts to obtain some or all of the rights to their work once their advance has been recouped.

The Legacy Unrecouped Balance Program will not just apply to artists, but to producers, joint venture partners and distributed labels that have had direct deals with Sony. Anyone eligible will be notified in the coming weeks.

In the letter sent out today, Sony are said to have written: “We’re driven by our mission to provide artists with the best levels of service. The program we are announcing today is part of that continuing work and further builds on our initiatives and investments in modernised contracts, flexible deal options, advanced data and analytics insights for creators and more.”


In a statement, Annabella Coldrick, CEO of the Music Managers Forum (MMF), said: “This is a very important, timely and welcome initiative from Sony Music. The MMF have been calling for a more progressive approach to tackling outdated contractual terms for some time, including a write-off of historic un-recouped balances.

“It is imperative that artists signed in an analogue era can also benefit from the boom in online streaming.  We hope forward-thinking moves by companies like Sony, BMG and Beggars will help accelerate the pace of reform across the entire industry. The momentum for change really feels like it’s picking up pace.”

The Featured Artists Coalition (FAC) also issued a statement on the new policy on their social media pages, saying they “look forward to the rest of the recorded music industry following suit”.

It continued: “We have long campaigned for unrecouped balances on advances to be written off after a fixed time period. It is therefore welcome that Sony has taken steps to do this today. We welcome this move towards a more artist-friendly model, and expect that Sony will apply this adjustment on a rolling basis.

“Tackling the problem of outdated and heinous contractual terms, such as decades old balances and regressive royalty rates, is at the forefront of the FAC’s agenda. These old-era contractual terms are completely unfit for the modern age, and we passionately believe that challenging these contracts holds the key to a fairer future for artists.”

Both the MMF and FAC recommended wiping unrecouped balances to the recent Department of Culture, Media and Sport select committee hearing on streaming.

Beggars Group, which owns the likes of XL, 4AD, Rough Trade and more, already operates on the basis that unrecouped credit will be written off 15 years after an “active relationship” with an artist ends.

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