Sony Music Bilking Estate of Rick Nelson on Unpaid Royalties, Alleges Complaint

Sony Music is shortchanging the estate of late singer-songwriter Rick Nelson by withholding royalties due from international streaming sales of his recordings, breaching his 1976 contract with then-CBS Records, alleged a Tuesday complaint (in Pacer) in U.S. District Court in Manhattan. The label agreed to pay Nelson a basic 24 percent royalty on net sales, with twice-yearly accounting statements, said the contract (in Pacer). The complaint seeks class-action status on behalf of artists who signed similar agreements with CBS Records, later renamed Sony Music after Sony America bought the label in 1987. Nelson, who died in a 1985 plane crash, released more than 30 albums, “almost all of which” made the Billboard Top 100, said the complaint. Top 10 hits including “Poor Little Fool,” No. 1 in 1958, and “Travelin’ Man,” top in 1961, it said. Sony Music “impermissably” assesses an “intercompany charge” for its international sales that takes up to 68 percent “off the top” of global revenue earned from streaming sales, said the complaint. It “bases the artist’s royalty rate on the remainder, which methodology directly violates” the 1976 contract, it said: Sony Music “underreports revenue generated from foreign sales” by “improperly” applying the intercompany charge. Wednesday, Sony Music declined comment.