Petty’s Secret Warners Deal Isn’t for Petty Cash
Who says you can’t keep a secret in the music business?
In a gossip-hungry industry where the most obscure details of superstar contracts are printed weeks before the deals are even signed, everyone seems to know what everyone else is doing.
So the news that MCA recording star Tom Petty signed a secret deal with Warner Bros. Records three years ago has been the buzz of the recording industry for more than a week. Petty, one of MCA’s biggest sellers for years, is still under contract for two more albums to the company that was acquired last year by Japanese electronics giant Matsushita.
MCA officials declined to comment on the secret pact, but other industry sources suggested the action raised questions of loyalties in a field where megabuck contracts and conglomerate mergers have become almost commonplace.
“It’s a free country and everyone has the right to look out for themselves, but for an artist to secretly negotiate a deal like this, most everybody in this business believes it’s extremely deceptive,” said one prominent record executive who was critical of Petty’s move. “To (do something like this) injects all kinds of bad signals and false elements into a working relationship.”
But other insiders defended Petty’s actions, arguing that record executives have been less than candid with artists in recent years when cutting secret corporate deals of their own. It’s highly doubtful, they suggest, that officials at MCA asked Petty in 1990 how he felt about their selling the company to Matsushita Electrical Industrial Co. Ltd. for $6.6 billion in cash and securities.
“When’s the last time a record executive disclosed to an artist that they were negotiating to sell their company?” asked one insider. “An artist’s entire future can change when a company sells out, but nobody considers talking to the artist. Before executives in the entertainment industry start lecturing artists about the ethics of secret negotiations, I think they better clean up their own back yard.”
Petty signed the estimated $20-million, six-album pact with Warners in 1989 because he was disappointed with MCA’s promotion of his music in the mid-'80s, sources report.
The Los Angeles-based rocker, whose career was on a downturn at the time of the Warners deal, apparently kept the agreement secret to avoid aggravating officials at MCA. He owed the company four more albums at the time and possibly feared that MCA wouldn’t promote them heavily if his plans were known.
Ironically, Petty’s first MCA album after signing the Warners pact--1989’s “Full Moon Fever"--became the biggest hit of his career. The album’s estimated 3 million sales reportedly prompted Petty to go back to Warner Bros. to break or upgrade the new contract. Insiders report that some adjustments were in fact made to the deal. His 1991 MCA album, “Into the Great Wide Open,” was not as big a hit, but has still sold more than 1 million copies.
“One of the problems in pop music is that artists and their managers don’t seem to take contracts very seriously,” said Jimmy Bowen, president of Liberty Records, whose roster includes country hotshot Garth Brooks. “The minute a pop artist gets a hit, they want to renegotiate for new terms. But artists are not children. They have to realize that when they sign a contract they are obligated to abide by it.”