Legal Experts Say Industry Must Be More Transparent Over Sales Data

Media experts at law firm Irwin Mitchell are calling for greater transparency in the entertainment industry after the creators of ‘This Is Spinal Tap’ reunited off-screen to ensure a $400m lawsuit against the media firm who own the rights to the cult classic rock mockumentary.

Three of the iconic band’s members have joined co-star Harry Shearer, who played bassist Derek Smalls, to ensure the lawsuit against media firm Vivendi “goes to 11”.

The French firm, the parent company of Universal Music, was originally being sued by Shearer for $125m, who claimed they’d not properly shared profits since buying the rights to the film in 1989.

The addition of the rest of the “band members”, lead guitarist Nigel Tufnel (Christopher Guest), lead vocalist and guitarist David St Hubbins (Michael McKean), as well as director and narrator Rob Reiner, has caused the size of the claim to swell to $400m.

The comedy legends claim Vivendi manipulated accounting data, while ignoring contractually obligated accounting and reporting processes, to deny them their rightful stake in the film’s profits.

The complaint alleges that between 1989 and 2006, Vivendi reported that the total income from soundtrack music sales was just $98 and that for the same period, the four received just $81 for their share of total worldwide merchandising.

This is despite music and merchandise linked to the 1984 film, which was made for just $2.25m, racking up “tens of millions of dollars” in revenue.

Guest said: “The deliberate obfuscation by Vivendi and its subsidiaries is an outrage. It is vital that such behaviour is challenged in the strongest way possible.”

Vivendi acquired the rights to Spinal Tap in 1989, and Shearer’s legal action claims it began a “concerted and fraudulent campaign to hide, or grossly under-report, the film’s revenues in order to avoid its profit participation obligations”.

Expert Opinion

“While This Is Spinal Tap is viewed by millions as comedy genius, the claims that Vivendi have manipulated and obfuscated profits to the detriment of the artists are no laughing matter.

Record labels now get a huge amount of data on the sales of music but this is infrequently passed down to the creative talent, and so the artist has no choice but to rely on the company calculating royalties properly.

We need to move to a position of more transparency of the various revenue streams labels receive so they can be held to account when they are not calculating royalties properly.
Aurelia Butler-Ball - Partner

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