Report: KORN To Receive $15 Million Upfront For Signing EMI Deal

According to a report published in today's edition of the Los Angeles Times, KORN's newly announced deal with the EMI Group calls for EMI to pay the four-member band an estimated $15 million upfront — more than twice what the band might expect from a traditional recording contract. In return, EMI would get more than 25% of the band's publishing, merchandising and touring revenue as well as profit from the group's albums.

"This is the direction that the music business is going," David Munns, chief executive of EMI Recorded Music North America, told the Los Angeles Times. "The music and records we produce drive an artist's career. But our margins are under threat and our marketing costs are getting more expensive. We should share in the other revenue streams that are created."

Others are skeptical.

The KORN contract "might be one of those deals that revolutionizes the music industry," said Rick Sales, a manager at Sanctuary Artist Management. "Or, EMI might wake up one day and wonder why they just handed KORN 10 years' worth of profits."

Jeff Kwatinetz, co-founder of The Firm, who brokered KORN's deal with EMI, said his clients expected to see their overall revenue increase because the label would have an incentive to spend more on promoting the group internationally.

"KORN does fantastic touring in Europe, but when the band was signed to Sony, it was hard to get them to spend a lot promoting the band overseas, because they sell fewer albums there than in the U.S.," Kwatinetz said. "This deal increases the size of the pie for promotions and of the revenues everyone collects.

"Something has to be done to change the economics of this industry. This may or may not be the answer, but it's a good step forward."

In the case of KORN, the deal is surprising to some because the band's sales have declined.

Although KORN sold a combined 7 million units in the U.S. of two albums released in the late 1990s, the group's last two records haven't sold more than 1.5 million copies apiece, according to Nielsen SoundScan. And though KORN's 2002 tour grossed $16 million, the band's 2004 solo series took in only $3.3 million, according to concert trade publication Pollstar.

EMI executive Munns said he was optimistic about the band's future after listening to its new, unreleased album.

"KORN has made a really exciting and dynamic record," Munns said. "Their touring is surprisingly robust, and they do a lot of it. This band will be a hit for a long time."

Read more at LATimes.com.