Linkin Park Will Stay With Warner Music

05.05.2008
LOS ANGELES, Dec. 27 - Less than eight months after issuing a stinging, public vote of no-confidence in its record company, Warner Music Group, the multiplatinum rap-rock act Linkin Park has signed a lucrative new pact with the recording giant. The six-member Los Angeles band and its management company, the Firm, last week reached a deal with Warner calling for an estimated $15 million advance for the group's next album, executives involved in the contract negotiations said. The pact provides the company's Warner Brothers Records unit with an option for up to five more albums from the band, one more than had been called for in their original deal.

Warner also agreed to increase the musicians' royalty rate to an estimated 20 percent. The next Linkin Park CD, still untitled, is expected to be released as early as mid-2006.

The deal emerged from intense talks after Linkin Park, days before an initial public stock offering by Warner in May, demanded to be released from its contract. In a public statement, the musicians said cost cuts made before the stock sale had rendered the corporation too weak to promote the band's recordings properly. The offering followed private investors' $2.6 billion purchase of the company from its former corporate parent, Time Warner.

The record company's executives had dismissed the band's complaint as a sham intended to bolster its position in renegotiating its contract. Linkin Park joins a long list of major acts who have publicly threatened or taken legal action against their label only to back down after receiving a hefty check. Acts like the Dixie Chicks, Beck, Incubus and Don Henley have traveled the same path.

Representatives for Warner and the band declined to discuss details. In a joint statement, the two sides said: "We would like to thank Linkin Park fans worldwide for their continued support. Despite initial concerns after last year's change in ownership, the band is pleased with the direction of the company and in Warner Brothers Records' ability to effectively market their music worldwide under the leadership of Tom Whalley," the label's chairman.

Linkin Park - Chester Bennington, Mike Shinoda, Brad Delson, Joseph Hahn, Rob Bourdon and Phoenix - have sold more than 18 million albums for Warner in America since 2000, according to Nielsen SoundScan. In the war of words that led to the public dispute, the band's management company estimated that the group accounted for more than 10 percent of the music giant's sales; Warner countered that the figure was actually less than 3 percent. In any event, the Grammy-winning band ranks as one of the most popular and commercially successful rock bands in the world.

Its fight with Warner erupted in April, when the band's representatives sent a letter to the corporation inquiring about receiving a cut of the upcoming stock sale, industry executives familiar with the exchange said. Warner responded by saying that none of the company's artists would be paid from the stock sale proceeds but that it remained open to discussing the band's compensation.

But the two sides quickly hit a stalemate, and in early May the band issued its statement. The group said it worried that internal cutbacks might result in "a failure to live up to W.M.G.'s fiduciary responsibility" to market Linkin Park. And while the stock offering meant Warner's owners would be "reaping a windfall," the band said, "Linkin Park, their biggest act, will get nothing."

In an interview days later, Mr. Delson, the band's guitarist, said the company "is bad news and that's why we don't want to stick around and see what happens." The record company had held firm in a similar clash in 2004 with Madonna. In a dispute over whether Warner would continue to finance the record label Maverick, its joint venture with her, Madonna sued for $200 million, contending the giant had cheated her and her partners out of millions of dollars with accounting trickery. In the end, Warner paid the Maverick owners $17 million in a buyout to settle the dispute.

In Linkin Park's case, the band might have faced tough legal hurdles if it tried to sever its contract. (As talks proceeded, Mr. Shinoda, the group's rapper, released a side project, "The Rising Tied," which has sold roughly 56,000 copies since its release last month.) While Warner has been awaiting Linkin Park's new record, it has rung up big sales for one of its acts, Green Day, whose album "American Idiot" has sold an estimated five million copies in America, according to Nielsen SoundScan.

New York Times - December, 27 2005


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