You know how I said that I love Tom Petty because he stands up for his beliefs? Well, the man really does. In the late ‘70s, Tom took a stand against his record company and the contracting standards of the entire music industry. He fought hard, lost a lot of money in the process but eventually, he came out on top.
The music industry has long been known for onerous contracts that can keep even top-selling artists forever in debt to their record labels. Generally, a record label advances an artist a sum of money against future earnings from royalties. Because the cost of extras like studio time, marketing and tour expenses must be recouped by the label before an artist earns any royalties, many artists never sell enough records to repay their advance. The system fails when a top-selling artist finds themselves deeply in debt to their record label, despite having sold millions of records. In 1979, Tom declared bankruptcy in an effort to free himself from his contract with Shelter Records.
When Tom filed for bankruptcy, he had little to show for the two hit albums he had already produced. Unhappy with the terms of his contract, he seized on the sale of Shelter by ABC to industry giant, MCA as justification to declare himself a free agent. Tom stated that he refused to be "bought and sold like a piece of meat”. Tom refused to allow his next album to be released, even going so far as to bear the cost of recording it personally, leaving him about half a millions dollars in debt. He eventually filed for bankruptcy, hoping to gain leverage in the brewing legal dispute by having the bankruptcy court declare his extremely unfavourable contract void (which he apparently signed under duress).
Eventually, MCA caved and agreed to release Tom from his existing contract by re-signing him to a contract with a new subsidiary label created especially for this purpose. The album, Damn The Torpedoes, went on to sell millions of copies and was one of the band’s most critically acclaimed records.
But Tom didn’t stop there. In the early ‘80s, he once again threatened to withhold his new album, Hard Promises, when MCA announced its intention to sell it for $9.98 (a dollar more than the typical retail price at the time). After another heated battle, MCA caved again, and sold the album for $8.98.
So that is the story of Tom Petty vs. The Record Companies. Pretty cool, huh? I love that he sticks to his guns and fights for what he believes in. His battles have also set a precedent and have helped other artists in their struggles with their record companies. But sadly, he didn’t change the entire music industry and tons of artists are still being screwed out of their royalties due to dodgy, constricting contracts. But keep fighting the good fight, I say!