Last June, BMG announced that it was examining the contracts of the recorded-music catalogs is has acquired in an effort to find evidence of racial disadvantage.

The Germany-based company, which was founded in 2008 but has acquired catalogs that date back to the mid 20th century, announced Friday (Dec. 18) that it has completed the first stage of the review and found such evidence of “discriminatory contract terms for Black artists” in four of the 33 catalogs in question plans to “bring forward measures which will benefit the lowest paid recording artists across all of its catalogs”; a rep tells Variety the company will come forward with proposals in the new year.

Citing European Union data-protection regulations, the rep said the company is prohibited from revealing which labels were found to have discriminatory contract terms. Recorded-music catalogs BMG has acquired over the years include the British labels Mute, Sanctuary and Infectious, as well as the pop-oriented S-Curve, country’s Broken Bow, rock’s Vagrant, the international-based World Circuit and the long-running reggae outfit Trojan, along with several production-music catalogs. However, such practices would seem likely to date back further than the active eras of most of the above labels.

The company encouraged others to take similar action, while noting that its action is limited to renumeration and “other facets of the relationship between the original labels and Black artists and cannot therefore be relied upon as either proving or disproving discrimination against Black artists in terms of expectations, label commitment or other non-financial parameters.”

BMG COO Ben Katovsky, who led the project, noted, “We acknowledge that the totality of the Black music experience cannot be captured in a numerical study, but we wanted to forensically address racial disadvantage in its most tangible form – the payments artists receive from their labels … We have found a number of both Black and non-Black artists with terms in contracts signed decades ago which we feel are not appropriate. While these legacy contracts may have been entered into willingly, are fully legally enforceable and we paid the previous owners full market value for them, we feel we can do better.” (His statement appears in full below.)

The move was hailed by the Black Music Action Coalition, the U.S.-based advocacy organization formed to address systemic racism within the music business, which said, “If all other labels were to follow suit, this could be a game changer for Black artists throughout the industry.” In August, Variety reported on Sony Music’s efforts to remove insensitive and triggering language from the company’s legacy contracts.

While reps for other companies have said similar review are under way, BMG (which is a relatively small company compared to the majors) has provided the most forceful statements and the most thorough review to date, at least publicly.

According to the announcement, key outcomes from the study, which it says has been verified by external auditors, are:

  • BMG has identified that four of the 33 labels in its historic acquired catalogues show statistically significant differences between the royalties paid to Black and non-Black artists. These will now be subject to a further deep dive study to establish definitively the reasons for those differences;
  • Regardless of the results of that study, BMG will shortly bring forward measures which will benefit the lowest paid recording artists across all of its catalogs;
  • Given that BMG represents a relatively small share of Black music history, particularly in the US, BMG is inviting record labels with substantial catalogs of Black music to undertake similar reviews and/or assist in providing independent researchers and academics access to such information in order to establish the scale of racial disadvantage across the record business as a whole.

Further, the announcement states that:

  • BMG’s historic acquired recorded catalogs include recordings on 33 labels by 3,163 artists of whom 1,010 (32%) are Black;
  • These recorded catalogs dating back to the 1960s were acquired by BMG between 2008 and 2019;
  • BMG was not responsible for striking any of these original deals;
  • The recorded catalogs feature 15 labels whose rosters include both Black and non-Black artists
  • Of those 15 labels, an examination of recorded royalty accounts showed that in the case of 11 of them, there was no evidence of racial disadvantage. Either 1) Black artists earned the same as non-Black artists or 2) there was no statistically significant difference between Black and non-Black artists or 3) Black artists earned slightly more than non-Black artists;
  • In the case of four labels there was a statistically significant negative correlation between being Black and receiving lower recorded royalty rates, a difference ranging from 1.1 to 3.4 percentage points;
  • To serve as a control for the review of historic recorded catalogs it has acquired, BMG applied the same methodology to the more than 800 recording agreements it has itself negotiated since it was established in October 2008;
  • The inquiry established there was no negative correlation between lower recorded royalty rates and Black artists across those deals;
  • As with the results for historic acquired recorded catalogs, the methodology and analysis was verified by external auditors.

The report also noted caveats on the results:

  • The BMG study is of recorded royalty accounts and is therefore limited to remuneration. It has nothing to say about other facets of the relationship between the original labels and Black artists and cannot therefore be relied upon as either proving or disproving discrimination against Black artists in terms of expectations, label commitment or other non-financial parameters;
  • This study focuses on historic recording catalogs acquired by BMG since its formation in 2008 and 2019. These are not representative of Black music as a whole and therefore the results cannot be extrapolated to prove or disprove racial discrimination in the music industry more broadly;
  • BMG believes its methodology is robust and, if more widely applied, could uncover important truths about the music industry’s treatment of Black artists. BMG therefore invites other record labels to join in reviewing the historical treatment of Black artists and is willing to share its learnings gained during the existing project in order to achieve this.

BMG CEO Hartwig Masuch said, “Since before the dawn of rock ‘n’ roll, virtually all pop and rock music has its roots in Black music. Yet music’s history books are littered with tales of discriminatory treatment of Black musicians. It is time for the music industry to address its past. Making good on our commitment to search for racial disadvantage in our historic acquired recorded catalogs has been an enormous and highly complex task. We have learned a lot and there is still more to discover. We will act on this knowledge. We invite other labels to join us in this mission – to turn the promises and hopes of Blackout Tuesday into action.”

The full statement from Black Music Action Coalition co-chairmen Binta Niambi Brown & Willie “Prophet” Stiggers reads: “Gathering, understanding and sharing data describing historic inequities in the music business is a core activity of the Black Music Action Coalition, which was formed to advocate for an end to structural and systemic inequality in the music business and broader society. We welcome this initiative by BMG and believe if all other labels were to follow suit, this could be a game changer for Black artists throughout the industry. We cannot fix what is wrong if we do not investigate and hold ourselves accountable for whatever the results may be.

“BMAC looks forward to continuing to work with BMG and every other music industry participant to understand this information, and recommend strategies and best practices to create a fair, just and equitable industry that respects the humans, who are at its core. Black artists and creators must be paid fairly if we believe genuinely that Black life matters.”

Katovsky’s full statement reads: “We stand by Black artists and we recognize the pain many feel about their history. We acknowledge that the totality of the Black music experience cannot be captured in a numerical study, but we wanted to forensically address racial disadvantage in its most tangible form – the payments artists receive from their labels.

“This project has been a huge undertaking. Our focus was to establish if there were differences in royalty rates which could only be explained by skin color. While difference is not necessarily evidence of bias, there were instances of differences that are significant enough that they warrant closer attention. We will follow this through to its conclusion.

“We have learned a lot about our historic acquired recorded catalogs during this study. We have found a number of both Black and non-Black artists with terms in contracts signed decades ago which we feel are not appropriate. While these legacy contracts may have been entered into willingly, are fully legally enforceable and we paid the previous owners full market value for them, we feel we can do better. We will shortly bring forward proposals designed to do just that.

“We are very aware that BMG currently accounts for less than 2% of the global recorded music market and our catalog assembled over the past decade is in no way representative of Black music as a whole. No broader conclusions, therefore, can be drawn from this study. However, we have learned enough that we are convinced that if it were to be replicated across the industry as a whole, it could do much to progress the cause of racial justice in music.

“After sharing our findings with stakeholders including clients, lawyers, managers and industry organizations including the Black Music Action Coalition (BMAC), we are now inviting record labels large and small to undertake similar audits of their Black and non-Black music catalogs and/or assist in providing independent researchers and academics access to such information.”

https://variety.com/2020/music/news/bmg-catalogs-racial-discrimination-1234865532/