How Did Filing For Bankruptcy Bring Tom Petty A Historic Win Against Record Company?
Tom Petty is a prolific musician, songwriter, singer, and record producer who was active in the music scene from 1967 until his passing in 2017. He is mostly known for his tenure in Tom Petty And The Heartbreakers as the lead vocalist and guitarist. Apart from his career in the band, he also pursued other ventures and solo projects.
In 1976, Petty formed Tom Petty And The Heartbreakers along with Mike Campbell, Ron Blair, Stan Lynch, and Benmont Tench. They then recorded their eponymous debut album, and it was released through Shelter Records. Although everything was going pretty well, the musician had to battle his record label by declaring bankruptcy, which changed some music industry norms.
Tom Petty Did Not Want To Be Bought And Sold, So He Self-Financed His Next Album
In 1979, Tom Petty was quite popular in the music industry, with his two successful records and singles, including ‘Breakdown’ and ‘American Girl.’ However, he was suffering financially and wasn’t getting what he really deserved. At that time, his record label was Shelter Records, but it was sold to MCA.
Following that, Petty realized that he had signed away all his publishing rights for $10,000. This was a big problem for him since his contract would be transferred to the other label, but Petty wanted to have a say in the matter. He didn’t want to be bought and sold like a piece of meat.
So, he self-financed his next album for around $500,000 and refused to release it. Petty then declared bankruptcy to force the label to void his contract. As a result, he signed back with MCA under more favorable terms.
In 1981, he and MCA had problems again when the label wanted to sell his next album, ‘Hard Promises,’ for $9.98, a dollar more than the usual price during those times. Tom refused to release the record again as he wanted it to be more affordable. According to one of his statements, the musician thought that if nobody takes a stand, the records would be very expensive in the future.
As reported by History, Tom Petty said:
“If we don’t take a stand, one of these days records are going to be $20.”
Eventually, MCA agreed to sell the record for $8.98. Therefore, this incident marked another win for Petty and many other musicians around the world. With this tactic, Petty also set an example for other artists to follow.