Distribution of Settlement Funds for Group I, II and III Products

The distribution of settlement funds will continue to be effected in various stages in the coming years.  Below is a general overview of the distribution process; we will continue to provide updates as additional details become available. New information regarding each distribution will also be posted in the Announcements and Notices section of this website.

Details regarding the settlement distribution are disclosed in the Key Terms of Settlement document.

APPLICABILITY:

The settlement distribution applies to products released in physical audio and video formats in Canada by the following four Canadian record companies and their Parent, Subsidiary and Affiliated Companies :

  • Sony Music Entertainment Canada Inc.
  • EMI Group Canada Inc.*
  • Universal Music Canada Inc.
  • Warner Music Canada Co.

*For Group III Products released by EMI, Universal is responsible for reporting and payment of pending royalties.

PRODUCT CATEGORIZATION:

The settlement distribution will be effected based on three product groups:

  • Group I Products: Products released prior to and including June 30, 2007
  • Group II Products: Products released between July 1, 2007 and December 31, 2009, inclusive
  • Group III Products: Products released between January 1, 2010 and December 31, 2012, inclusive

PAYMENT INTO SETTLEMENT TRUST:

A first payment of royalties into the Settlement Trust was made by each record company as well as by CMRRA and SODRAC on June 30, 2011. The total amount of this first payment, inclusive of legal and administrative fees, was approximately $46.5 million.

The sums paid by the record companies relate to pending royalties for Group I and II Products only.  Further payments of pending royalties for the ongoing sales of Group I and II Products will be made to the Settlement Trust on a quarterly basis.

  • The sums paid by CMRRA and SODRAC represented royalties received but undistributed as of December 31, 2009.
  • An agreement on the payment of royalties for Group III Products has not yet been finalized between the parties. More information will be provided as soon as it is made available to CSI.

DISTRIBUTION OF THE SETTLEMENT FUNDS:

The settlement funds will be distributed by CSI to class members using one of two methodologies, depending on the value of the pending list item:  1) via a market share allocation and 2) via a claims process.

1) Market Share Allocation:  Pending list items that have a value of $1,000.00 or less, for each of Group I and II Products, will be distributed on a market share basis. That is, the total sum of royalties available for these items will be allocated to class members based on their respective share of the royalty payments made by each of the four Canadian major record companies to those rightholders in the last several years.

  • The market share allocation to class members for Group I Products will be based on royalty payments made to rightsholders by the four major record companies between January 1, 2003 and December 31, 2009.
  • The market share allocation to class members for Group II Products will be based on royalty payments made to rightsholders by the four major record companies between January 1, 2005 and December 31, 2010.
  • The market share allocation to class members for Group III Products will be based on royalty payments made to rightsholders by the four major record companies between January 1, 2008 and December 31, 2013.

The calculation of the market share allocation will be performed at a rightsholder (catalogue) level. CSI will allocate the settlement fund per label for each individual catalogue so that the current administrator of these catalogues can in turn perform its own allocation of the settlement for each one. Song level information will not be available as part of the market share distribution conducted by CSI and CMRRA. SODRAC, however, will undertake its distribution on a “work by work” basis.

No active steps need to be taken by class members to claim their market share of the settlement fund for items with a value of $1,000.00 or less. CSI will undertake the calculation of the market share allocation under supervision by Class Counsel based on the payment information provided by the four record companies under the settlement.

In accordance with the Key Terms of Settlement between the parties, where a rightsholder is eligible to receive less than $100.00 of the market share allocation, that amount will be redistributed on a pro-rata basis to rightsholders eligible to receive an amount greater than $100.

Once each rightsholder’s share has been determined, CSI will distribute the funds as follows:

  • CSI will pay SODRAC the total share of the funds allocated to class members that are members of SODRAC;
  • CSI will pay CMRRA the total share of the funds allocated to class members that are principals of CMRRA;
  • CSI will pay all other class members directly;
  • CMRRA and SODRAC will distribute the funds to their respective members and principals in accordance with their respective methodologies.

For additional information regarding the market share distribution, please refer to Section 1.04 of the Key Terms of Settlement.

2) Claims Process:  Pending list items that have a value of greater than $1,000.00 will be published on CSI’s website where class members will be able, for a limited time, to review and search the lists for their works and make claims where appropriate.

GROUP I, II and III CLAIMS PERIODS:

GROUPS I AND II Products – The Claims Period for these Products is now closed.

Claims Period 1:  Medium-Value Items with an aggregate value greater than $1,000.00 but smaller than $2,500.00 will be published on this site for a period of six months. The deadline for claims submissions for Medium-Value Items was August 2, 2012.

Claims Period 2: High-Value Items with an aggregate value equal to or greater than $2,500.00 will be published on this site for a period of twelve months. The deadline for claims submissions for High-Value Items was February 1, 2013.

Upon conclusion of each Claims Period, any unclaimed portion of the settlement associated with Medium and High-Value Items will be distributed to class members on a market share basis, as explained above.

GROUP III Products – UPDATE

An agreement on the payment of royalties for Group III Products has not yet been finalized between the parties. CSI and Class Counsel are working with the labels to reach an agreement on the applicable payment as quickly as possible.  We will post an update here once such information is available.  Once specific dates have been established for the claims periods related to Group III Products, we will post those here as well.