The attorney for Maverick Records has dismissed as “hogwash” a claim by Warner Music Group (WMG) that Madonna’s label has lost $66 million since 1999.
WMG’s claim is the latest wrinkle in a spat with Maverick’s principals – Madonna and Guy Oseary – over the value of the label and who will control it after this year. WMG has an option to buy the 60% of Maverick it does not currently own when the labels’ joint-venture agreement expires Dec. 31.
Maverick attorney Bert Fields says WMG is “stabbing Madonna in the back” by filing the claim in the middle of settlement negotiations.
According to a recently unsealed Delaware court filing, WMG says Maverick’s principals would have to cough up $92.5 million on top of a buyout price if they wanted to take control of the label. That figure includes the cited $66 million in losses along with an outstanding $20 million loan and other unrecouped costs. WMG claims that Maverick generated $50 million in profits, shared between WMG and Maverick, prior to 1999.
According to the court document, filed March 24, if Maverick cannot raise the money needed to buy itself out of WMG’s control, WMG would convert the label into a “purely passive economic interest,” over which Maverick would have no operational control and from which Maverick could not regain any profit until WMG recovers its $66 million in losses as well as the outstanding loan.
Maverick filed a $200 million breach-of-contract suit March 25 in California Superior Court in Los Angeles, seeking to terminate the joint venture. The suit charges WMG with inaccurate accounting practices that understated the value of the label. WMG’s latest filing was a preemptive action against Maverick, asking a judge to declare that Maverick’s claims were baseless.
As part of the buyout process, Maverick must value the venture. WMG then has the option of taking a buyout at that price or buying out Maverick’s stake at the same price.
Scott Welch, manager for top Maverick act Alanis Morissette, says the internecine battle is the best thing that could happen. Morissette’s new album, aptly titled “So-Called Chaos,” comes out May 18.
“Maverick wants to sell as many Alanis albums as possible, because if they leave they want to be a valuable pickup for another label,” Welch says. “WMG wants to sell as many as possible because if they pick up Maverick, they have an artist who is very valuable.
“We’ve gotten everything we’ve ever asked for,” Welch continues. “It’s the best focus we’ve had since ‘Jagged Little Pill.”‘
