Sony Music overpaid American Idols

Just over a year after the music branch of the company behind American Idol filed a suit against Sony Music for unpaid royalties, the major label has filed a counterclaim.

Filed on Tuesday, Sony Music’s breach-of-contract suit claims it overpaid at least $2 million in royalties for the talent show’s winners and finalists.

In February of last year, 19 Recordings, CORE Media Group's creative production, recording, touring, and artist management arm sued Sony. 19 alleged the major failed to pay it over $7 million in royalties - including royalties from streaming services - for American Idol winners and certain finalists including Clay Aiken, Kelly Clarkson, Carrie Underwood, Chris Daughtry, Kellie Pickler, Jordin Sparks, David Archileta and David Cook. It also claimed the artists were underpaid for for the use of their songs on compilation albums.

A court document filed on March 17 describes Sony’s motion to dismiss those claims made by 19 Recordings. However, 19 Recordings’ motion that Sony mischaracterised distribution of music on streaming services as "sales" rather than "broadcasts" or "transmission” – the royalty fee for the latter is higher - was qualified by a New York judge. Sony was then requested to file an ‘Answer’.

Sony’s Answer, filed in New York on March 31 by Covington & Burling's Jonathan Sperling and Christopher Yeung, states it had actually overpaid the royalties for a number of artists.

"SME seeks to recover from 19 more than $2 million in overpayments to which 19 was not entitled under the License Agreements," the suit reads.

According to court documents obtained by The Hollywood Reporter, Sony Music has claimed it overpaid royalties for American Idol’s compilation albums, for digital downloads of songs by Kelly Clarkson, Carrie Underwood and Clay Aiken and for an advance given to season five’s sixth place finalist Kellie Pickler.

"The royalty overpayments resulted in part from the incorrect application of the royalty rate associated with sales of Albums to these sales of permanent digital track downloads," the suit reads.

A status conference has been scheduled for May 1. 19 Recordings' attorney Richard Busch has said he is evaluating the claims.