Zac Brown Band’s early investors must not pay royalties on sales of individual tracks, appeals court rules
Artist News Business News Labels & Editors Legal
By Chris Cooke | Posted on Monday, March 8, 2021
One of the first investors in the group of countries, the Zac Brown Band, failed to overturn an earlier court ruling that it should not suffer a reduction in the sums generated from the sale of individual tracks by the group. The Georgia Court of Appeals ruled that a lower court was correct in finding that a 2007 deal only provided Braden Copeland with a royalty on album sales.
Copeland first loaned money to Zac Brown and his then fledgling band in 2006, to help fund recording and touring costs. The following year, a deal was struck whereby, instead of Brown repaying the loans, Copeland would get a royalty on the recordings he would help fund, as well as a reduction in income from sales of the group’s merchandise.
This agreement had two sections. The first covered royalties owed to Copeland while the Zac Brown Band released their own music, the second what would happen if the band were signed to a label. And this second section came into effect the following year when the band signed with Warner’s Atlantic Records.
The first section – that is, while the band was self-released – provided for royalties for the sales of albums and the sale of individual tracks. However, the second section – that is, the one that came into effect after the Atlantic deal was struck – only talked about Copeland’s share of the royalty on album sales.
Which meant that once the band signed, Copeland only received royalties on the sale of albums, not individual tracks.
Of course, by then the iTunes boom was underway and on-demand streaming was on the horizon, meaning the music industry was increasingly turning into a business where single tracks rather than albums were the biggest revenue generator.
Copeland first asked why he wasn’t getting royalties on single-track sales a few years later, initially getting no clear answer from the group’s accountants. However, it was not legalized until 2014, when a separate dispute arose over royalties on unpaid goods.
The commodity element of the dispute was ultimately resolved, but the question remained whether or not Copeland should receive royalties on the sale of individual Zac Brown Band tracks. The group said the 2007 deal clearly only provided Copeland with a royalty on album sales. But he argued that the relevant section of that agreement was actually somewhat vague on this point, in part because there was a reference to “other sales” later in the clause.
However, the lower court agreed with the group that the 2007 deal only gave Copeland a royalty on album sales and ruled in their favor by summary judgment. Copeland then appealed, arguing that the relevant clause in the 2007 contract was vague enough that a jury rather than a judge should have interpreted what the agreement between him and the group actually said.
But the Georgia Court of Appeals has now agreed with the lower court, saying the 2007 agreement is pretty clear on what royalty rights Copeland enjoys, and therefore the judge in the original case was fully within his right to rule by summary judgment. .
The Court of Appeal declared: “It is not disputed that [Zac Brown Band] entered into a recording contract with Atlantic in October 2008. Thus, from that point on, the method by which the royalties would be shared between Copeland and [the band] was governed by subsection B of the September 2007 agreement and, more specifically, by paragraph two ”.
“Although subsection B paragraph two explicitly states the percentage Copeland was to be paid on sales of ‘records incorporating the entire album’,” he adds, “there is – unlike paragraph two of subsection A, which includes the term “individual recordings from the album” – no mention of individual recordings, let alone the method of calculating royalties for those sales. This omission is notable ”.