By Eriq Gardner & Austin Siegemund-Broka, The Hollywood Reporter
The second week of trial has damages experts opening up about closely guarded financial secrets.
As the Blurred Lines trial resumed, jurors got an inside peek at the financial success of the song credited to Robin Thicke, Pharrell Williams and T.I.
Both sides agree with an accounting statement that attributes $16,675,690 in profits for “Blurred Lines,” which was the biggest hit of 2013. According to testimony, $5,658,214 went to Thicke, $5,153,457 was given to Williams and $704,774 came to T.I. The record companies (Interscope, UMG Distribution and Star Trak) took home the rest, with an executive at Universal Music testifying that overhead costs on the creation of “Blurred Lines” accounted for $6.9 million.
Few things are more closely guarded in the song business than financial profitability, and these types of details usually only leak out in accounting disputes that make it to trial. Here, the numbers are revealed as part of a copyright case where the family of Marvin Gaye asserts entitlement to a big chunk of money from “Blurred Lines” because it’s alleged to be a copyright infringement of “Got to Give It Up.” As a result, such information as the $4.3 million that Williams got in publishing royalties and $860,000 he got in producer royalties has been disclosed.
Gaye’s family isn’t stopping at demanding money from sales of the song. The singer’s children Frankie and Nona Gaye are also targeting touring money, which, according to testimony, was about $11 million attributable to the success of “Blurred Lines.” Much of this information comes from Creative Artists Agency, which was served with a subpoena over Thicke’s income. To be awarded money on the touring front, the Gayes will likely have to establish a causal nexus between the infringement and the touring revenues.
Besides seeking profits, the Gayes are additionally seeking actual damages, or an amount of money to compensate the Gayes for a reduction of the fair market value of the worth of licensing “Got to Give It Up.” Testimony on that front will be coming soon. But an accountant for the Gayes testified that the total publishing revenue for “Blurred Lines” is a little over $8 million, and that the Gayes would have negotiated for a 50 percent cut.
However, accounting expert Nancie Stern testified that the licensing fees would have gone up to 75 to 100 percent if there was no agreement before the release of the song. “If you [license] before you release, you can negotiate,” she testified. “After the fact, it becomes an infringement and you lose your negotiating power. There are many different variables that go into how that will turn out.”
Finally, there’s also a second song in contention at trial — Thicke’s “Love After War,” alleged to have misappropriated Gaye’s “After The Dance.” That song, according to more testimony from Gaye’s other financial expert, Gary Cohen, brought home $895,374 in profits.
During opening arguments, Richard Busch, the attorney representing the Gayes, tallied the alleged damages at approximately $40 million.
More to come on today’s testimony.