ENTERTAINMENT : Jackson Going for Big Royalty Increase


Pop superstar Michael Jackson has dispatched his legal representative to New York to nail down the final details of a revised contract with CBS Records that is expected to be the most lucrative in music history.

Jackson lawyer Bertram Fields went to New York this week to join the singer’s primary contract negotiator--New York attorney Allen Grubman--who is seeking to secure from CBS Records a special production arrangement for Jackson as well as royalties of more than $2.50 per album, sources say. Jackson is also asking CBS Records, which is owned by Sony Corp., for his own recording label and other concessions, a source close to Jackson said.

The entertainer is proposing that CBS Records advance him more than $18 million per album, a cost that the company would recoup from Jackson’s $2.50-plus per-album royalty. Pop music royalties typically range from $1 to $1.50 per album, including publishing royalties.

It could not be learned whether the per-album royalty is based on the retail or wholesale album price or whether the proposed royalty includes publishing rights or other costs. Royalties negotiated under standard CBS Records contracts normally include publishing royalties and are based on an album’s wholesale price.


Still, the stiff royalty being sought by Jackson would leave CBS Records with precious little profit, industry sources say. One entertainment lawyer estimates that under Jackson’s current agreement with CBS Records, an album would have to sell more than 6 million copies before CBS Records would make any money.

“Those are extraordinary numbers,” said another entertainment lawyer. “CBS doesn’t have a lot of room left over to pay for publishing royalties, shipping, manufacturing and overhead. . . . On the other hand, there are probably a lot of other labels out there who would love to sign Michael Jackson.”

CBS Records spokesman Bob Altshuler declined to comment about the status of contract negotiations with Jackson or speculate about the artist’s importance to the label: “We never talk about any negotiations with anyone,” Altshuler said.

But CBS Records has been under pressure to reach an accord with the entertainer in the wake of the rancorous departure of its volatile former chief executive, Walter R. Yetnikoff, who often boasted of his close relationship with CBS Records’ artists.


Yetnikoff’s relationship with Jackson deteriorated in June when he got into a dispute with rival record industry mogul David Geffen over Jackson.

Yetnikoff and former Jackson attorney John Branca had opposed a Geffen effort to get Jackson to perform for the soundtrack of the movie “Days of Thunder.”

Shortly after the dispute, Jackson fired Branca, hired new lawyers and advisers, and asked CBS Records to renegotiate his current record contract, which would have paid him an estimated $18 million for his next album.

While no entertainer apparently has a record deal that rivals Jackson’s current pact with CBS Records, Jackson, who is known to be obsessed with setting music industry precedents, wants to make sure his deal far outdistances that of any other artist, including his sister Janet Jackson, who is currently renegotiating her contract with A&M; Records.