Linkin Park Seeks Release From Its Warner Contract

After releasing five albums encouraging angry revolt, the multiplatinum rap-metal band Linkin Park took a page from its own songbook Monday, demanding to be released from its contract with Warner Music Group, which is preparing to go public.

In a statement issued by the group’s management company, The Firm, the band said it had become “increasingly concerned” that Warner Music’s “diminished resources will leave it unable to compete in today’s global music marketplace.”

Warner Music, whose stable of talent includes Madonna, Metallica and Green Day, responded in its own statement saying Linkin Park’s complaint was nothing more than an attempt to wrest more money out of the company as it readies to file for an initial public offering.

“While Linkin Park’s talent is without question, the band’s management is using fictitious numbers and making baseless charges and inflammatory threats in what is clearly a negotiating tactic,” the Warner Music statement said.

Linkin Park has released five albums with Warner, one of them with the artist Jay-Z, selling 17.9 million copies, according to Nielsen SoundScan. The band still owes Warner four albums under its contract, whose terms have not been disclosed.

Warner Music, whose artists currently occupy the first, third and eighth positions on Billboard magazine’s bestseller list, is expected to sell shares shortly, raising as much as $782 million. But in its statement, Linkin Park seized on the company’s plan to earmark only $7 million of the proceeds for corporate purposes.

Warner Chief Executive Edgar Bronfman Jr. led the private investor group that last year purchased Warner Music from Time Warner Inc. for $2.6 billion. He and his fellow owners stand to gain more than $200 million in special dividends and fees if the IPO is completed.

“The new owners ... will be reaping a windfall,” the band’s statement said. “Linkin Park, their biggest act, will get nothing.”

This latest dust-up comes at a delicate time for the label, which is in the middle of its “quiet period” in advance of a public offering.

“Investors want IPOs that don’t have any dirty laundry,” said David Menlow of IPO Financial Network.

The war of words began three weeks ago when the band’s lawyers sent Warner executives letters asserting that Linkin Park has consistently accounted for more than 10% of the company’s sales, suggesting the band is worth $550 million. Warner countered that the band accounts for less than 3% of sales.

A source familiar with Warner said Linkin Park’s lawyers demanded $60 million and royalties of 50%. Warner responded with $15 million and royalties of 50%.

Linkin Park’s gambit has been tried before with some success. Last year Madonna’s Maverick Records sued Warner for $200 million to end its contract. The parties reportedly settled for $10 million to $20 million and Madonna continues to work with the company.