After several weeks of trying to renegotiate singer Toni Braxton’s recording contract, attorneys for the LaFace/Arista Records artist have filed a lawsuit against the label seeking to have the court declare Braxton’s pact no longer valid.
The move follows Braxton’s rift with managers Arnold Stiefel and Randy Phillips, who had advised against such a filing, which resulted in the singer switching managers and attorneys.
In the lawsuit, filed Friday in L.A. Superior Court, Braxton’s lawyers said the singer has sold more than 15 million copies of two albums and earned Arista “an estimated $170 million.”
As a result, her lawyers contend that Braxton is entitled to a superstar deal with a royalty rate and advances much higher than those articulated in her current label pact.
Royalty rate at issue
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Sources say execs at BMG Entertainment, Arista’s parent, and Arista have offered Braxton a new deal worth north of $39 million, which raises her royalty rate into the 20-point range, commensurate with many so-called superstar pacts. The deal was orchestrated by lawyer Joel Katz, who was also ousted from the Braxton fold.
The six-page lawsuit does not mention the new contract offer or the ongoing renegotiations.
Gary Stiffelman, Braxton’s recently appointed transactional attorney, declined to discuss the new offer, but characterized it as “nowhere near the level (Braxton) is entitled.”
Stiffelman said a lawsuit was filed when it appeared “the label’s intention was to do nothing” to advance the latest offer.
The declaratory relief lawsuit, which claims her current pact only offers a 33¢ per album royalty rate, seeks to test California’s personal services contract statute, which declares that pacts inking artists to record labels cannot be enforced seven years after they start.
The lawsuit asserts that as of Aug. 10, 1996, Braxton’s recording contract was no longer valid. The pact was signed in 1986 and was renegotiated in 1991 and 1994 to reflect the success of her two discs “Toni Braxton” and “Secrets.”
The label’s not ponying up the improved deal points is “exactly the sort of abuse the California Legislature had in mind 60 years ago when it passed the law,” noted Larry Stein, Braxton’s litigation attorney, who is working with Stiffelman and new manager Barry Hankerson. (Braxton remains contractually linked to Stiefel and Phillips.)
Execs involved in the contract talks at Arista and BMG said Friday they had not yet seen the lawsuit. “Toni is a wonderful artist, and LaFace has been a positive influence on her career,” said Mark Shimmel, prexy of the Atlanta-based LaFace, who learned of the lawsuit Friday. He declined further comment.
The so-called “Seven Year” statute has never been tested in a trial court, partially because record labels believe if the issue was ever litigated, it is unlikely the outcome would be favorable to them.
The upshot would likely be an exodus of artists from labels throughout the industry. Olivia Newton-John, Teena Marie and Don Henley are among the artists who have invoked the statute against their labels to win extractions from pacts when deals weren’t sweetened to their satisfaction.
California is the only state that offers the statute, which is one of the reasons many recording contracts are based on the laws of New York.
Braxton’s lawsuit states that because Arista has an office in Los Angeles, and the label paid her “expenses to relocate her to California for the convenience of the record company,” her pact — though inked in Arista’s base of New York — is subject to California laws.
