Universal Moves Ahead to Nullify Prince Recorded-Music Deal – Variety
According to court papers made public Tuesday, Universal Music Group is moving ahead with its plans to rescind the $31 million recorded-music deal it struck with the Prince estate announced in February. In a heavily redacted document, the company restates its claim that it was misled by the estate’s special music advisors in the deal, and that it paid for rights to music that is under contract to Warner Music Group.
The deal immediately came under scrutiny from observers because Universal claimed to have secured rights to music from Prince’s initial stint with Warner Bros. — which spanned the years 1977 through 1996 and featured the artist’s biggest-selling works, including the albums “1999,” “Purple Rain,” “Parade,” “Batman,” and “Diamonds and Pearls” — in a time frame that did not seem to square with previously announced information or standard deal terms. The terms of an agreement Prince struck with Warner in 2014 that sources say allowed him to regain the rights to certain recordings were confidential and UMG had not seen them at the time of the deal, although representatives for the estate were aware of them. Last month, UMG moved to rescind the deal.
Earlier this month, Judge Kevin Eide moved to allow UMG to see the Warner contract in an attempt to resolve the matter. But in a document released Tuesday, UMG said that “Our thorough review has only confirmed that rescission is necessary because of the material misrepresentations and nondisclosures made by the Estate’s prior representatives to induce UMG to enter a deal that was immediately contested by [Warner].” It also said in the document that L. Londell McMillan, a former special adviser to the estate, said on June 22 that the Warner agreement “could have been drafted better,” and “there is no dispute that these rights are confusing.”
The document concludes by saying that “If the Personal Representative’s Motion to approve our mutual Rescission Agreement is not granted, UMG will have no choice but to seek legal rescission of the UMG Agreement by filing suit against the Estate in federal court [redacted] based on fraud and mutual mistake, and will pursue additional claims against the Estate’s prior representatives for damages that will far exceed [amount redacted].”
Now, it is up to the judge to determine whether the motion will be approved.
If the UMG deal is indeed rescinded, the rights to Prince’s recorded-music not covered under the deal will be back on the market and will likely be acquired by another company, albeit at a price perhaps considerably lower than the $31 million UMG deal.
Reps for UMG, Warner and McMillan had not responded to Variety’s request for comment at press time. However, in May, McMillan gave Variety the following response to UMG’s claims: “This is a contractual interpretation issue and an issue of whether the personal representative desires to defend the assets of the estate — not a fraud issue. I find it inappropriate and absurd for anyone to suggest that L. Londell McMillan committed any kind of fraud over a contractual-interpretation issue that many lawyers reviewed. I look forward to our legal response and the response from the other parties who helped negotiate these agreements. The struggle continues.”