Did record label cheat 'American Idol' contestants out of money?

Kelly Clarkson performs during the 2013 CMA Music Festival on June 8, 2013 at LP Field in Nashville. (Photo by Christopher Polk/Getty Images) Image by Getty Images

Did record label cheat 'American Idol' contestants out of money?

By Phyllis Stark. CREATED Feb 20, 2014

 A federal lawsuit filed Thursday (Feb. 20) claims "Sony Music breached contracts and shorted royalty payments to former 'American Idol' contestants and the show’s music [and artist management] company, 19 Recordings," The Tennessean reports.

"The suit - which is seeking at least $10 million in damages - was brought by 19, which entered into licensing agreements with Sony for recordings by several former 'Idol' contestants including . . . Kelly Clarkson, Carrie Underwood and Kellie Pickler. Other artists cited in the suit were Clay Aiken, Chris Daughtry, Jordin Sparks, David Archuleta and David Cook," the daily newspaper reports. Clarkson, Underwood, Sparks and Cook were all winners on the show.
According to the suit, Sony "shorted 19 and the artists on royalty payments because of 'systemically incorrect calculations'" and 19 discovered the shortfalls as a result of audits performed by two accounting firms. The company believes more shortfalls have yet to be discovered.
Sony did not respond to The Tennessean's request for comment on the suit.
Sony had first rights to sign any "Idol" contestants it wished from the show's first season (won by Clarkson) until 2010 when the show struck a new deal with rival music company Universal Music Group.
"Some of the artists, like Clarkson, Underwood and Daughtry, have remained on Sony label imprints, and the artists are not listed as plaintiffs on the lawsuit," the Tennessean reports. "The breaches and underpayments have been compounded by the extreme success of the former 'Idol' contestants, especially Clarkson and Underwood who have reached superstar status."
The suit seeks compensatory damages in excess of $7 million in addition to $3 million in interest, plus audit and attorney costs.
Phyllis Stark

Phyllis Stark

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Phyllis Stark is the Digital Executive Producer - National Content for Scripps Media.