In summary

A bill to rewrite the rules for recording contracts could destroy California’s creative legacy, stacking the deck against new acts and voices.

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By Mike Montgomery, Special to CalMatters

Mike Montgomery is the executive director at CALinnovates, a nonpartisan technology advocacy coalition.

When hip hop legends performed at this year’s Super Bowl, it’s no surprise that much of the imagery of Los Angeles was iconic to viewers around the world. California has always been where the future gets made and the geography of groundbreaking music is etched into its landscape – from Malibu beaches to modern-day Hollywood TikTok collabs.

But a proposal to rewrite the rules for recording contracts making the rounds in Sacramento could destroy that creative legacy, stacking the deck against new acts and voices, drying up the job market for working musicians and backing vocalists, and making it harder for risk-taking acts to get signed. All to fund even bigger paychecks for a handful of established superstars and wealthy managers and moguls. Say goodbye to California’s rule breakers and musical pioneers.

The proposed “FAIR Act” legislation, Assembly Bill 2926, sounds good on the surface – sponsors claim it would free artists from unfair long-term record deals by limiting contracts to a maximum of seven years and setting new terms for any renegotiation of an artist’s deal. With streaming in flux and big record labels earning more than ever, who could oppose new rules to help artists get their due?

In reality, all that rhetoric simply isn’t backed up by the actual terms of the bill itself. Its sponsors are writing a check they can’t pay off, and working artists and diverse voices trying to get signed are the ones who will pay the price. (Not to mention the rest of us who simply want California to keep on breaking new ground.)

The bill’s sponsors claim it would give artists the protection of California’s “Seven Year Rule” which limits personal services contracts in the state to that length. But record deals signed in California are already covered by the Seven Year Rule – today, under existing law, no deal can run longer. The bill doesn’t change that or give artists any new long-term protection.

What it does instead is delete the portion of California’s labor code that allows record companies to seek to recover their losses if artists fail to deliver recordings they agreed to make (and were paid for) during the statutory Seven-Year period.

Multiple experts have found that the FAIR Act proposal would devalue all recording deals – driving down advance payments to artists, reducing the number of new acts that get signed, and making it harder for innovative new sounds and diverse new voices to get signed.

Those conclusions make sense. If something is riskier, its price goes down and the market produces less of it. By one estimate, California’s music economy could shrink as much as $600 million a year if this terrible idea became law.

The FAIR Act would hurt virtually all artists at every stage of their career – except the top 1% earners. Established superstars would gain major new leverage to threaten to withhold recordings promised under their existing contracts thanks to the bill’s new limits on record companies’ ability to recover losses.

It’s no surprise the bill is backed by backward-looking moguls like Irving Azoff who represent these stars. Indeed, when the Legislature considered a comparable proposal nearly 20 years ago, observers warned, “This is Goliath in David’s clothing: The superstar artists lending their celebrity to the [effort] are the ones who will benefit from it. In fact, they’re the only ones.”

And that remains true today. If enacted, AB 2926, introduced by Assemblymember Ash Kalra, a Democrat from San Jose, would harm California’s working-class musicians the most. Good paying jobs “20 Feet From Stardom” would flee the state or be destroyed altogether.

California’s Legislature wisely rejected this proposal at that time. And last session the Assembly declined to even give this bad idea a hearing.

It should do the same this time around. Public policy should be on the side of working artists, diverse voices and tomorrow’s pioneers, not multimillionaires who already had (and made) their shot.

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