Mary Wells in 1970
Photo by Michael Ochs Archives/Getty Images
Deep Asymmetries Of Power: How The Recording Industry Spent Decades Denying Fair Payment To Black Artists
Singer Mary Wells was one of Motown's most successful early stars; her massive 1964 hit "My Guy" smashed through segregated genre lines, hitting number 1 not just on the R&B charts, but on the Billboard Hot 100 as well. But despite selling enormous numbers of records, Wells died in poverty at age 49 in 1992. She had no medical insurance, and when she contracted cancer, she couldn't pay her rent and lost her home, as well as her car. Stars like Bruce Springsteen, Diana Ross and Rod Stewart donated tens of thousands of dollars to pay for her medical treatments.
Wells was grateful, but also understandably bitter. "It just shouldn't be where I have to hold my hand out and say I need help," she said. "I had hit records. I made a lot of money for people. I don't think anybody gets what they want or deserve, because life isn't like that. But they shouldn't be thrown on the street."
Wells believed the record industry had ripped her off. And research by scholars Matt Stahl of the University of Western Ontario and Olufunmilayo Arewa of Temple Law back her up. Stahl and Arewa have been examining the record industry's Byzantine accounting practices. Their work, discussed in a paper released last November, indicates that artists in the '50s and '60s were systematically denied record royalties. Today, the practices which robbed Mary Wells and other singers of her era persist. Record company accounting practices remain opaque, and there's good reason to believe that performers continue to be underpaid even when they make "a lot of money for people."
"I think what's really lacking is systems of accountability," Arewa told GRAMMY.com in a Zoom call with Stahl. "And the question is, how do you actually have accountability when you have such deep asymmetries of power between the recording companies and the artists, and also deep assymmetries of information, between the recording companies and the artists signing the contract? Generally, the recording companies know a lot more than the people signing. And when you combine that with no accountability, I think you end up with a system that's not very favorable to artists."
The recording industry's monopoly on information was important in the '50s and '60s, Stahl and Arewa explain, because artist compensation was dependent on royalties, which the record companies were supposed to track. Even contributions to health and retirement funds made through the American Federation of Television and Radio Artists (AFTRA) were calculated based on income. This worked pretty well for television performers covered by the organization, since they had regular incomes and wages. But recording artists had more sporadic earnings, and AFTRA had little interest in making sure those were reported accurately before the 1990s.
Typically, artists received some advance money to pay for wages and other expenses accrued while making a record. Royalties are counted from moment of first sale; in the '50s and '60s artists typically received a paltry 3-5% of retail. These royalties are first applied to the expense balance. Only after these initial expenses are paid back do artists start to receive royalty checks.
Record companies then have a huge incentive to understate royalties, and numerous ways to do so. They can claim that artist expenses were high, or charge them for dubious expenses, or not report domestic or foreign sales. Howell Begle, the late Washington lawyer who regularly advocated on behalf of underpaid black R&B stars of the '50s and ’60s, also found that record companies would charge artists for expenses not allowed for in contracts, such as the costs of remastering old recordings for re-release on CD. Because of such accounting methods, many high-profile artists ended up owing their record companies exorbitant sums. Arewa and Stahl note in their article that in 1986 Muddy Waters owed Chess $56,000; Carla Thomas owed Stax some $80,000.
Mary Wells poses with The Beatles in 1965
Photo by Hulton Archive/Getty Images
Record executives claimed that these huge sums were the result of artist profligacy; label owners supposedly advanced Waters, Thomas and others thousands for drinking, partying and high-living. Artists had little power to contest such racist, insulting narratives, because they had no access to company records.
Contracts did not provide for regular audits. Artists could demand audits, but they were required to pay for them themselves—and because record companies had cheated them for years, they often, like Mary Wells, lacked the money for an extended legal battle. Companies paid no penalties for withholding royalties, either, and even if an audit revealed money owed, artists wouldn't necessarily be able to get it, especially in the Jim Crow era. "I'm not sure an African American person could really actually go to court or even find a lawyer to take the case [in the '50s or '60s]," Arewa told me. "And even if he went to court, how would a jury look at this African-American person who's making allegations or accusations against a white person?"
Despite the record company's many advantages, musicians have tried to hold them accountable. The most successful campaign in this regard was undertaken by the great R&B singer Ruth Brown. As Stahl discusses in an article in The Queen Mary Journal of Intellectual Property, Brown and Begle launched what was essentially a public relations program to shame her label, Atlantic, into providing restitution for artists.
Brown was experiencing a career renaissance, and she used her elevated profile to raise awareness of unjust treatment in the music industry. Meanwhile, Begle pushed for greater access to Atlantic accounts. After years of pro bono work, he managed to find a smoking gun memo which admitted that Atlantic had not even kept track of royalties for many of its artists from 1960 to 1971. This meant that all their accounting statements after that time were fraudulent.
Atlantic at the time was engaged in a high-profile 40th anniversary celebration and trying to cement its status as a cultural treasure. Faced with a public relations disaster and possible criminal charges, the company in 1988 agreed to fund the Rhythm and Blues Foundation, which would make cash grants to classic artists.
That seems like a happy ending. But unfortunately, Stahl told GRAMMY.com, "Shortly after they were founded, it seems like they turned their attention to institutionalizing rather than handing the money out. Within a few years, it was clear that its main priorities were a plush office, a few salaries and annual awards ceremony." Begle resigned from the Foundation's board, as did rock critic Dave Marsh, who said angrily in 2002 that the Foundation's "main mission appears to be covering up the felonies committed against veteran soul/R&B artists."
Stahl and Arewa believe these injustices still persist. Audits remain sporadic and difficult, and record company accounting, past and present, continues to be opaque. The industry has responded to Black Lives Matter protests by blacking out websites to reflect on social justice issues. Spotify and Sony offered to match employee donations, and Warner Music Company announced it would donate several hundred million to a foundation to support antiracist causes.
But Stahl and Arewa are skeptical. "If someone proposed $200 million dollars [in charitable contribution]," Stahl says, "you can figure what tiny fraction of what is actually contemplated that might be." Arewa points out that actress Hilary Swank just had to sue AFTRA for denying her coverage for coverage of ovarian cysts. If well-known actors aren't receiving good medical coverage from AFTRA, it doesn't bode well for less high-profile performers.
"It struck me when Tidal was launched," Arewa says, "that there were various very, very successful artists, they were all on stage complaining, and many of them are multimillionaires, if not billionaires complaining about their royalties and their payments from the recording industry. And they aren't really the artists with the biggest problems. Not to say they don't have problems, but they are doing very well, even despite the problems. Some people are literally dying in poverty because they don't get royalties. We know cases of those. So the question is, how do you fix the system so it has better outcomes for everyone?"
Reform is too late for Mary Wells, and for Ruth Brown, who died in 2006. But If record companies really wanted to make up for past misdeeds, and prevent future ones, Stahl and Arewa say, they could start by opening up their accounts to researchers, accountants and artists. Regular independent audits, paid for by the record companies themselves, would be a huge step towards figuring out what older artists are owed, and what new artists should be guaranteed going forward. What's needed isn't charity, but transparency and the accountability that comes with it. As Wells said, nobody gets what they want or deserve. But musicians who brought joy to so many, and so much money to labels, should at least get what they're owed.
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