Hip Hop's Far Reaching Corporate Influence

On Super Bowl Sunday last month, Chrysler dropped a cool $9 million dollars for a 2-minute commercial, the longest in Super Bowl history. The commercial showed gritty, emotional everyday pictures of Detroit and Detroiters and asked, “What does a town that’s been to hell and back know about the finer things in life?” The commercial ended with Chrysler’s new tag line: “Imported from Detroit.”



The commercial set the internet ablaze. Traffic on Edmunds.com, the premier online automotive information site, spiked. Chrysler-related searches increased by 267% and 1,619% for Chrysler’s new 200, featured in the ad. Chrysler’s bold, profound commercial was ranked by many as one of the top commercials of the Super Bowl. When Sergio Marchionne, CEO of Chrysler, gave his execs a sneak-peak of the ad, many were reportedly close to tears.

Why was this commercial so memorable, moving and so successful (not to mention expensive and risky)? Aside from featuring a battered Detroit now purpotedly rising from the ashes and coming on strong, Chrysler decided to also feature an infamous Detroit native. Perhaps like the automobile industry itself, this Detroit native plateaued several years ago and seemed to fade in import and impact. But now, on a comeback himself, hip hop superstar Eminem can speak for a city and citizenry that are seeking to rise to a new found prominent place.

The irony in this interesting circle of corporate risktaking is that, as reported by Forbes magazine, Marchionne himself hesitated before deciding to make Eminem the face of his franchise in this expensive outlay of shareholder value. Marchionne admitted, “This was not an easy choice. . . . Apart from the money involved . . . and this is pretty expensive stuff, but you know, the choice of the topic, the choice of the characters in the thing were not easy choices. I had to think about this really long and hard. . . . You know, I love Eminem but . . . I also know that some of the choices of language that he has made are things that are not what I would consider to be commonly shared.” Marchionne necessarily treaded a delicate line in featuring the hip hop bad boy who is famous for hard-core lyrics and profanity, as well as bouts of homophobia and misogyny.

Eminem’s manager, Paul Rosenber, explained that the ad “started off as a request to license music but after . . . learning more about [Chysler CEO] Sergio Marchionne's vision, we realized there was a lot in common with Chrysler's story as it relates to Detroit and Eminem and his ability to overcome. We think the video we made with Chrysler is a statement about the passion of the company and the City of Detroit and we are proud to be a part of it."

Marchionne eventually overcame his reluctance to use Eminem as his spokesperson, recognizing how much the rapper has in common with the automaker. “[Eminem] represents part of America that I think is important as hell. I think it’s at the heart of what we are.” OK, not everyone likes the rapper’s music, Marchionne conceded, “but a lot of what he is, is us, you know? I mean there’s a sort of seriousness about that kid . . . which is true of [Chrysler]. The fact that we’re coming out of nowhere, right? A lot of people last year asked us, you know, are you still going to be here in 12 months?”

The fact that Eminem and his parallel story to Chrysler’s are generating national buzz and interest, despite the well-documented auto industry bailouts and bankruptcies last year, is a testament to the far-reaching influence that hip hop artists have nationally and internationally.


*** Cross Posted on the Corporate Justice Blog ***

The Bar Exam

Artist: Lil' Wayne
Track: No Love
Album: Eminem's Recovery


Throw dirt on me and grow a wildflower
But it’s “fuck the world”, get a child out her
Yeah, my life a b-tch, but you know nothing bout her
Been to hell and back, I can show you vouchers
I’m rolling Sweets, I’m smoking sour
Married to the game but she broke her vows
That’s why my bars are full of broken bottles
And my night stands are full of open Bibles
I think about more than I forget
But I don’t go around fire expecting not to sweat
And these niggas know I lay them down, make their bed
Bitches try to kick me while I’m down: I’ll break your leg
Money outweighing problems on the triple beam
I’m sticking to the script, you niggas skipping scenes
Be good or be good at it
Fucking right I’ve got my gun, semi-Cartermatic

Eminem's Former Production Company Loses Lawsuit Over Digital Royalties

The former production company for Eminem recently lost a jury verdict in United States District Court for the Central District of California over claims that it was owed $1.47 million in additional royalties for the sale of the artist’s music via iTunes and ringtone purchases.

In F.B.T. Productions, LLC v. Aftermath Records, et al., (view the plaintiff's memo in support of motion for summary judgment) the issue concerned a pair of royalty provisions contained in a 1998 agreement between the two parties under which F.B.T. would furnish Eminem’s recordings to Aftermath, the record label founded by Dr. Dre. The first royalty provision promised F.B.T. between 12- 20% for “full-price records sold in the United States”, while the second provision required Aftermath to pay a royalty of 50% on proceeds emanating from “master recordings licensed to others for their manufacture and sale of records or for any other uses.” At issue was whether the first or second royalty provision was triggered by the sale of Eminem’s master recording rights to Apple iTunes and cellular telephone network carriers.

In the breach of contract suit, F.B.T. alleged that Aftermath had incorrectly relied upon the first royalty provision in determining the royalties due to F.B.T. for the use of Eminem’s master recordings for downloading purposes. F.B.T. claimed that Aftermath’s transfer of master recording rights to Apple iTunes and cellular carriers for downloading purposes clearly constituted a licensing agreement pursuant to the second royalty provision.

Conversely, Aftermath argued that the parties never intended for the term “license” to assume a strict copyright law definition; rather, they intended for the second royalty provision to apply to “ancillary uses” of the master recordings, such as the licensing of an Eminem song for use in a movie or for inclusion in a compilation album. According to the defendants, there is no difference between a digital album sale and a physical album under the royalty provisions.

Ultimately, the jury sided with the defendants in a case that could have opened the door for artists to claim increased royalties from the downloading of their recordings on iTunes or through cellular carriers. However, the jury did award F.B.T. $159,000 on a separate claim for misallocation of royalties by the defendants to F.B.T. and Eminem. Attorneys for F.B.T. say they will likely appeal on the breach of contract claim.

The verdict most significantly affects artists who are currently bound by royalty provisions drafted prior to the explosion in popularity of legal downloading earlier this decade. At a time when digital downloads account for 33 percent of all music purchases made in the U.S., these outdated agreements are preventing some artists from collecting royalties commensurate to their popularity among consumers.

- Brian Welch

(Photo by Andrew Medichini/Associated Press)