Scooter Braun and Ithaca Holding’s recent acquisition of the record label Big Machine Records and, most importantly, the master recordings of Taylor Swift’s first 6 albums is no love story. Indeed, Scooter Braun’s subsequent USD $300 million sale of these masters to the Disney family founded private equity firm, Shamrock Capital, has Ms. Swift seeing red. While it is clear Ms. Swift believes these masters should belong to her, these recent transactions are a stark reminder as to the complexity of legal issues that can arise when creating content. While creatives and companies alike know this all too well, here is a quick primer to fill in any blank spaces the rest of us have.
Copyright in songs and recordings
Copyright in a song as a musical work subsists separately to copyright in a recording. For a song, copyright is in the lyrics and melody, and typically belongs to the songwriter or music publisher, depending on what agreements are in place. Concurrently, a master recording is the original recording of the song in the studio from which all other copies are made. This includes what you might hear on the radio, on any CDs or on streaming services like Spotify and Apple Music. For most artists signed to major record labels, it is the record label who owns the masters, granted in exchange for financial compensation and marketing support to an artist. From a copyright perspective, songs need to be thought of separately to the actual recordings of those songs.
This brings us to Taylor Swift.
While the original agreement Taylor Swift signed with Big Machine Records was probably something beyond her wildest dreams in 2004, she now likely thinks it is a deal she should have said no to. This agreement gave ownership of the masters of her first 6 albums to Big Machine Records and later Shamrock, by way of Scooter Braun.
It is not uncommon for a record label and music publisher to own rights to music which an artist feels they should be entitled to. This has lead to a number of acrimonious disputes throughout the years (see Michael Jackson’s acquisition of The Beatles’ publishing rights to the detriment of Sir Paul McCartney). While an artist may have signed a perfectly legal contract and received a staggering number of benefits for handing over their masters, artists have made it clear time and again that they still feel an underlying sense of ownership in every aspect of the music they have created.
Taylor Swift is no exception and wants control of the masters of her first 6 albums. If Taylor Swift’s Twitter claims are anything to go by, she was prevented from bidding on these masters and was only offered a deal whereby she would need to record one new album for Big Machine Records for each one of her old albums’ masters. She refused. It is also no industry secret that there is bad blood between Scooter Braun and Taylor Swift, so the recent transactions appear to be something Ms. Swift just could not tolerate.
However, all is not lost. While Shamrock now owns the masters, as a songwriter, it is likely that Taylor Swift has a deal with her publishers, Sony/ATV Music Publishing, to retain rights in her songs. This allows her to retain some control over how and where her songs are licensed, including the right to prevent her songs, and thus the masters, from being used in, for example, advertisements or film soundtracks.
Further, Taylor Swift is now signed to Universal Music Group’s Republic Records with a deal that grants her ownership of her masters for music she records going forward. As Ms. Swift has rights to her early songs, this potentially means she is free to make new master recordings of her old songs, subject to any restrictive covenants in her original contract with Big Machine Records. Most deals with record labels prevent an artist from simply re-recording music, at least for a certain period of time, to prevent artists bypassing the masters issue altogether.
While we may not know the intricate details of Taylor Swift’s original contract with Big Machine Records, Taylor Swift has signaled that she has indeed already started re-recording her back catalogue of music. What will come from these new recordings and what steps, if any, Shamrock can take to ensure their recent investment does not go to waste remains to be seen. Shamrock may just rely on the fact that listeners may be less interested in hearing modern takes of songs they enjoyed a decade ago and stick with the originals.
In the meantime, let’s hope Taylor shakes it off, finds some closure and keeps making music which fans will no doubt eagerly consume.