The legislation eliminates a label's right to seek damages if the terms of a contract are not carried out. That means the labels and businesses that contract in California would lose any assurance they could recover their investment in an artist even when that artist is successful.
The impacts of the measure would be significantly harmful to an array of small and large businesses dependent on the music industry, emerging artists dependent on the financial investments made in their talent by record companies, and the California economy, into which the music industry injects billions of dollars each year.
``We have joined together today to urge the Legislature to reject this bill,'' said Glen Barros, head of Concord Records, an independent record company based in Northern California. ``We are a coalition of small and large businesses and individuals who are committed to keeping jobs and opportunity in California and supporting California's economy. The recording industry directly supports more than 27,000 California jobs, including 40 in my own company, and tens of thousands more rely on our business. If this bill passes and is signed by the Governor, my ability to discover, represent and promote new talent would be reduced. This bill will benefit only a handful of superstar artists and will take away countless opportunities for artists to receive the promotion they need to be given the attention they deserve,'' Barros concluded.
Members of the California Music Coalition cited three specific negative impacts of the bill. By increasing the risk of investing in artists in California, fewer investments will be made here meaning fewer jobs for the industry and fewer opportunities for new artists. Small businesses - with limited dollars to invest - would face a new barrier in California because they would lose any assurance they would be able to recoup their scarce investment dollars even when an artist is successful. And by making California the only state where both parties in a recording contract cannot enforce contract terms, the legislation would create an incentive to contract for and produce albums in other states.
Miles Copeland, chairman of Ark-21 Records, a small record label, emphasized the dangers lurking with the bill. ``This industry is already reeling from a variety of external causes, such as the digital revolution and online file swapping. Significant harm could be caused to the entire music business because of the very visible complaining by a few successful recording artists in our own family. If the mega stars succeed with this effort, I feel strongly that it would be at the expense of those artists who have not made it yet. As a manager who continues to be interested in new artists, I greatly fear the unintended consequences of the Recording Artists Coalition's actions.''
Rick Dickson, senior vice president at WMS (Warner Media Services), a manufacturer of CDs and provider of the packaging, highlighted the dramatic affect on the nuts and bolts providers of the industry. ``My employees and I work hard every day to produce the music of recording artists. If the industry slows down in California because this legislation reduces the amount of money the companies can spend on our end of the business, our employees' jobs would be in jeopardy.'' Dickson was accompanied by several workers from a CD manufacturing and packaging plant.
Liz Dunster, President, Erika Records CD Pressing, said the following, ``Every aspect of the music industry is affected by this bill in California and really, everything we do at Erika -- from CD pressing to vinyl manufacturing to packaging to t-shirt production. That is why we're joining the California Music Coalition and lending our support.''
Also attending today's launching of the CMC were: James Mayberry, president, Galactic Records, Paul Fishkin, president, Fishkin Entertainment, Inc., Jon Levy, CEO of Moonshine Music, John Perenchio, president of Ultimatum Music, Tom Frouge of Triloka Records, Hilary Rosen, CEO of Recording Industry Association of America, and owners and employees of other industry-related small businesses.