Warner Music offers $11.5 million settlement to royalty-rate victims

The Warner Music Company has offered a settlement for musicians and performers who believe they've been paid using the wrong basis. The company has proposed an $11.5 million sum to be divided among applicable parties.

Warner Music is currently facing a lawsuit that alleges it's been paying artists signed prior to 2002 under the wrong basis. The company has been using an artist royalty rate, which normally ranges between 6 percent and 20 percent. The suit alleges that performers were entitled to a licensing basis, which would mean Warner would have to split revenues with the musician. The difference between 6 percent and 50 percent adds up quickly.

No decision has been made in the lawsuit, but Warner Music is looking to cut its losses and run. Sony Music made a similar bid against a similar lawsuit during 2012, offering an $8 million pot to applicants on its label. The $11.5 million would be split among any Warner musicians signed prior to 2002 who choose to apply. The original plaintiffs-Kathy Sledge-Lightfoot (of Sister Sledge), Gary Wright and Ronee Blakely-would have its legal fees covered by the settlement as well.

The deadline for Warner musicians to apply has not been set as of yet, but Billboard estimates a four-month period will ensue. Musicians who opt in will not be allowed to pursue further legal action against the company. Performers, including the original plaintiffs, can decide to opt out of the settlement and continue pursuing damages, but the prospect of coming out of this lawsuit with nothing to show, plus legal fees, might be enough to cause them to bow down.