New York Amsterdam News
28th September 1996
A New York State Supreme Court judge has dismissed a December 1995 breach-of-contract suit filed by Savage Records against David Bowie and his management company, Isolar. However, the judge ruled that Savage can continue to pursue four of the seven charges against BMG alleged in the same suit.
The $100 million suit charged the artist and BMG with conspiring to put Savage’s U.S. company out of business (Billboard, Jan. 13, 1996). Its U.S. operation went bankrupt in 1993.
In a decision filed July 14, 1997, Judge Charles Edward Ramos wrote that “allegations of Bowie’s involvement in an alleged scheme are conclusory and cannot withstand the motion to dismiss.”
Attorney Paul LiCalsi, who represented Bowie, says, “Savage’s assertion of fraud and conspiracy charges against David was just an abusive attempt to get marquee value for this case. We’re delighted with the outcome of this motion.”
However, Steven Shore, Savage’s attorney, says it’s not over yet. “With respect to our claims against BMG, we will pursue them. And it is my expectation that we will be filing an appeal with respect to the portion that released Mr. Bowie. We respectfully disagree with Judge Ramos.”
According to the original suit, in 1992 Savage and BMG entered into a three-year agreement whereby BMG would manufacture, distribute, and help market albums released by Savage in the U.S. Under the deal, BMG was to pay Savage net proceeds within 60 days after the end of every calendar month on releases sold through the arrangement.
Following that pact, Savage and BMG pursued Bowie, eventually signing him to a three-album deal, which called for him to license the master recordings to BMG and Savage. Bowie’s advance for the first album, to be split between BMG and Savage, was a minimum royalty of $3.4 million. Additionally, BMG and Savage were obligated to spend at least $1 million to promote each album.
Bowie delivered “Black Tie, White Noise” to Savage and BMG in December 1992. According to the original papers, after Savage had already paid Bowie more than $2 million in advances and video fees, BMG unilaterally terminated the agreement in July 1993 and refused to pay the $1 million it owed Savage. Without BMG’s money, Savage claims it was unable to pay Bowie and Isolar the remaining money it owed them and therefore had to give back to Bowie Savage’s rights to his records.
The four charges that Ramos said Savage can pursue against BMG include breach of distribution agreement and tortious interference with the recording agreement and distribution agreement.
BMG had no comment by press time.