Stehr and his company seek $10M from Sony over alleged “secretly” withholding royalties and breaching an ‘at source’ clause in his record contract. Stehr also was involved in a lawsuit against Sony Music in the Netherlands in 2019. Stehr’s lawsuit claims indicated that “SME applied distribution fees to his royalties via its affiliates, which he says was in breach of the ‘at source’ provision in his record contract, and which resulted in the alleged underpayment of his royalties.” Stehr is seeking full payment “after the deduction of a reasonable distribution fee to SME.”
Stehr argues that his 2013 contract with SME wasn’t honored by SME. He argues in the media statement that “an ‘at source’ provision in a record contract does not allow two mutually related parties to deduct an agreed distribution fee, since the settlement basis is at the source.”
Stehr and his company claim further state that an audit “unveiled how SME and its subsidiary Ultra Records have withheld royalties for years.” They also claim that “SME deliberately failed to account Mr. Probz following the contractual ‘at source’ provision and refuses to give Mr. Probz access to its bookkeeping, which is necessary to carry out an audit.”
Sony Music Netherlands stated that: “We categorically dispute the claims made and are in the process of reviewing the summons. We will respond via the legal process and are unable to comment further.”
Stehr’s lawyer, Pim Keulen, said: “With surprise and disbelief, we have read the findings of the Grant Thornton reports. SME apparently makes mutual intercompany agreements within a group, unbeknownst to artists, resulting in musicians missing out on significant income. They cannot rely on being correctly disbursed by SME.”
Dennis Stehr said: “It is important that this case is won, not only for myself but also for other artists who have signed into ‘at source’ agreements with one of the largest music entities in the world.
“This case can prove that artists have possibly not received the compensation to which they have been entitled for years. For an individual artist, filing a lawsuit of this size against a major is often impossible. When there is a conflict, they often feel intimidated by these influential record labels.
Added Stehr: “They usually don’t have the resources to compete against these giants in th music industry, on whom they are also financially dependent most of the time.
“From the start, I have not received the compensation I was entitled to, and I suspect I am not alone. What we have discovered after years of litigation and the recent audits is so crooked that I have no choice but to take these steps.”
– Excerpt from an article for Music Business World by Murray Stassen. Read the full article here.
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