RE: Music companys to pay up

["Michael Spinella" <mspinell@aaas.org>]

Chuck,

I'm sorry that my comment - which was only intended to introduce
perspective, not to let the music companies off the hook - provoked a
sarcastic response. It really wasn't intended to be controversial, or to
defend the record companies. I want to reiterate once again that I don't
condone tricky accounting, or even merely mistaken accounting, that
results in people losing money that was rightfully theirs, however small
the amounts.

Nevertheless, I stand by my original point. This situation, as far as I
know of it, is in no way comparable in magnitude to the Enron or Worldcom
situations, nor is it (so far) even very suggestive of a more widespread
problem. First, $4.75 million divided by 161 artists averages $29,504
(close, but slightly lower than the figure you cite below), and the length
of time this payment is said to cover is highly material in accounting
terms, as well as for anyone who would seek to gain some perspective on
this subject. The snip you provided said this was a settlement for
"decades" of underpaid royalties. That would mean that the average loss
per year was no more than $1475. We can all agree that we would not like
to have someone rip us off for $1500 per year for 20 years - and yet it
should still be possible to admit that this is, in the scheme of things, a
smaller rip off, effecting fewer people, than the Worldcom and Enron
scandals, no?

Furthermore, this level of bad behavior is hardly indicative of the kind
of all-encompassing falsifying of the financial situation of an entire,
huge corporation that was the signature of these two other larger
scandals. I don't know what further revelations may await us from the
record companies, so I reserve judgment on whether these current
revelations are merely the tip of the iceberg. Maybe you know better. I
don't claim to. But from what is in front of me at this moment, I don't
see that this is in any way comparable to Enron or Worldcom.

Best,

Mike Spinella

>>> cahamake@email.uncc.edu 06/29/02 10:40PM >>>
Michael, that's about $32,000 on average, apiece. It didn't say now much
of it the lawyers got. and it goes back to the new releases on CD's of the
80's.

I would guess some of the bigger stars and their heirs got more.

Given that artist's selling, according to the article, up to 8 million
copies are still "in debt" to the companies, sounds to me like it's as
screwy a business as the accounting schemes publishers use to distribute
overhead "equally" on each new journal.(and your share of the heating bill
comes to....)

Yes, it also sounds to me like accounting was the point of the case-or
rather improper accounting. Oh, hey, that's the problem with Worldcom too.
Only it took twenty years and lawsuits to catch Universal out. The article
suggests its the tip of an iceberg, that music companies were ignoring
royalties to former stars and their heirs. . Keep the stuff out of the
public domain longer and force the people who created the stuff to sue to
get paid. Nice job if you can get it.

Chuck