Modular Founder Responds To Allegations Over Tame Impala Royalties

The founder of Aussie label Modular Recordings, Stephen 'Pav' Pavlovic, has broken his silence after two days of allegations arising from a lawsuit filed by BMG in the US claiming that he owes the company more than $580,000 in unpaid royalties for local act Tame Impala.

In a statement issued via law firm Levitt Robinson, it is indicated that "an America-based company owned by Mr Pavlovic" did indeed hold the mechanical licence for Tame Impala's music until "about" January last year, "at which point the distribution — and the liability to pay the mechanical royalties — was assumed by a Universal Music Group entity".

This partially echoes a statement put out by Universal Music Australia — who, along with Modular, was listed as a co-defendant in BMG's case — that claims they should not have been named in the first place because the mechanical licence was held by "A totally separate US-registered company owned and operated by Mr Pavlovic".

However, the statement from Levitt Robinson reads: "Mr Pavlovic accepts that his American company was responsible for the payment of royalties for the period that his company was distributing the Tame Impala works in the USA, but not for the period since Universal Music Group began distributing those works.

"It is not clear at this stage whether BMG is claiming any unpaid royalties relating to the period in which Mr Pavlovic's company was distributing Tame Impala records," it said.

The statement goes on to point the finger at Universal Music Group for the failure to cough up BMG's money, claiming that "no Tame Impala royalties have been paid at all" since UMG took over the mechanical licence, and that Pavlovic "does not accept liability for any failure by Universal Music Group or its subsidiaries to make royalty payments to BMG".

Pavlovic is yet to respond to new allegations that arose yesterday from the news that UMA has filed a lawsuit against the industry veteran for "wrongfully retain[ing] for his own benefit" money that was given to him by a Modular artist as advance payment. The case will be heard in NSW Supreme Court from tomorrow, 5 June.

Read the full statement from Pavlovic's lawyers below.

Ben Butler and Christine Lacy reported in the Australian on 2 June 2015 that Levitt Robinson client Stephen Pavlovic is being sued in New York by music publishing company BMG, in relation to mechanical royalties for the distribution of Tame Impala records which are allegedly unpaid. BMG have also brought proceedings against record label Modular Recordings, and various companies within the Universal Music Group of companies, including Universal Music Australia.

An America-based company owned by Mr Pavlovic was responsible for the distribution of Tame Impala records in America until about January 2014, at which point the distribution–and the liability to pay the mechanical royalties– was assumed by a Universal Music Group entity. Mr Pavlovic accepts that his American company was responsible for the payment of royalties for the period that his company was distributing the Tame Impala works in the USA, but not for the period since Universal Music Group began distributing those works. It is not clear at this stage whether BMG is claiming any unpaid royalties relating to the period in which Mr Pavlovic’s company was distributing Tame Impala records.

BMG have advised Mr Pavlovic that no Tame Impala royalties have been paid at all since the time that Tame Impala sold their mechanical licenses to BMG—including for the period during which Universal Music Group has been distributing the records. Mr Pavlovic has no financial interest in Universal Music Group and does not accept liability for any failure by Universal Music Group or its subsidiaries to make royalty payments to BMG.

Mr Pavlovic is currently in confidential discussions with BMG in order to resolve the dispute.