You may have heard of the “seven-year rule,” a made-in-California construct that allows artists of all sorts to exit a contract after seven years rather than end up in a situation resembling long-term indentured servitude.
While the law has its roots in Hollywood, it’s been invoked by musical artists a number of times who feel abused by their label and want out. Hole, Thirty Seconds to Mars and a few others have gone down this road but their cases were settled out of court.
However, Avenged Sevenfold is going up against their label, Warner, in court. The outcome could fundamentally change the relationship between artists and labels in the future–well, in the US, anyway. The Hollywood Report picks up the story:
Music contracts are generally denominated in deliverables (in Avenged Sevenfold’s case, they agreed to record five albums and a couple of live ones for Warners), not length of term. The recording industry successfully convinced California lawmakers that labels invest so much up front in their artists, they should be able to recover the “lost profits” of uncompleted albums from acts who don’t fulfill their contractual commitments.
Avenged Sevenfold, which won best new artist at the MTV Music Awards in 2006 and has put out four well-received albums with Warners, could in December become the first musical act to test the law before a jury. The stakes are huge for both the band and the music industry: If it loses, Avenged Sevenfold could face a verdict between $5 million and $10 million. If it wins, the outcome could embolden other acts with contracts older than seven years — which on Warners’ roster includes major recording artists Red Hot Chili Peppers and Green Day — to exit their current deals.