Courtney Love Settles Suit Against Vivendi Universal

Did Courtney cave?

Rock singer Courtney Love, who sued the world’s biggest music company to expose the record industry’s allegedly corrupt business practices, had vowed never to settle. But she did exactly that on Monday amid questions about the future of the artists’ rights movement she helped launch.

After Love sued Vivendi Universal’s Universal Music Group last year to break her band’s contract, the widow of Nirvana singer Kurt Cobain complained about the “unconscionable and unlawful” business and accounting practices of the major record labels. Since then, dozens of stars have lined up to demand better contracts, health benefits and other reforms.

But after a series of legal setbacks, Love agreed to a settlement that releases her from her record contract and provides her with ownership of several unreleased recordings by her band, Hole. As part of the settlement, Love gave permission to Universal to release additional records by Nirvana, the seminal grunge rock band led by her late husband, including a previously unreleased song. Universal also will pay an estimated $12-million advance to be split among Love and the two surviving members of Nirvana, sources said.

Love also announced Monday that she had settled litigation with the two Nirvana members, Dave Grohl and Krist Novoselic.

Love vowed to continue to push for artists’ rights in Sacramento and Washington, “where this belongs,” she said in a statement.

“We’re glad that we have resolved this amicably and wish Courtney well in all of her future endeavors,” said Zach Horowitz, Universal Music Group’s president.

After Cobain committed suicide in 1994, Love became a star in her own right with her rock band. Hole achieved some commercial success in the U.S., selling more than 3 million copies combined of its two major albums.

Love is the latest music star to sue her record label, only to settle before trial. In June, the Dixie Chicks forged a new record pact with an estimated $20-million signing advance just 10 months after accusing their record company, Sony Music, of “systematic thievery” and under-reporting royalties.

But Love’s case helped spur dozens of artists to activism and forced the industry to defend its practices in front of lawmakers.

Still, a California Senate bill to repeal a provision of state law that binds musicians to their contracts longer than other workers died this summer amid heavy industry lobbying.

To some musicians, Love’s settlement underscored how difficult it can be for them to take on the five major record conglomerates.

Love’s dispute with Universal erupted in December 1999, when she notified the music powerhouse that she would no longer record for the company because it had improperly acquired her contract from another label. Universal sued Love in January 2000, demanding compensation for five undelivered albums. Love countersued in February 2001, claiming that the record industry’s long-term contracts violate California’s so-called seven-year statute, which says entertainers cannot be tied to any company for more than seven years.

If the artists’ rights bill became law, it could introduce a free-agency system similar to ones in the film and sports industries. To avoid testing the law, record labels typically have agreed to rewrite the contracts of disgruntled stars.

Nirvana members Grohl and Novoselic sued Love in December, accusing her of trying to seize control of Nirvana’s music for her own financial gain. In addition to causing her legal bills to mount, the lawsuit cast Love as a hypocrite in the artists’ rights movement.

Love initially scoffed at the idea of settling her case against Universal, and the company braced for a full-scale legal war.

But a series of rulings by Los Angeles County Superior Court Judge Fumiko Wasserman winnowed the case down to a fairly common breach-of-contract trial. Moreover, Universal raised the specter of releasing a modest Nirvana greatest-hits CD package--without a celebrated but unreleased Nirvana song Love still had claim to--unless she resolved the lawsuit over her band, Hole. The Nirvana track, “You Know You’re Right,” is believed to be the final song recorded by the band. It appeared on the Internet several weeks ago and has received airplay on radio stations nationwide, threatening commercial sales of a Nirvana package.

“It’s a wonderful settlement for the Cobain heirs and the other surviving band members and the public,” said Yale Lewis, Love’s attorney.

In settling the contract case with Love, Universal will receive a percentage of two of Love’s future recordings at another record company for a limited number of years. Universal also credited Love with a few hundred thousand dollars in additional royalties. Perhaps most important, Universal avoids testing the seven-year statute in court.

“This is why we need legislation,” said Simon Renshaw, an artist manager at the Firm, which handles acts such as the Dixie Chicks and Staind. “These fights cost hundreds of thousands dollars a month. The artist gets to a point where they say, ‘I can’t do this anymore. I have to move on.’ ”

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Times staff writer Geoff Boucher contributed to this report.