Music Industry Author-Activist Dorothy Carvello Tests Her Power As Shareholder With Letter to WMG

A lawyer for author, social activist, public relations consultant and former music industry A&R executive Dorothy Carvello has sent a letter to board members of the Warner Music Group requesting records relating to the company’s investigations into previously-reported sexual misconduct claims and royalties accounting at the label, according to a copy of the letter obtained by Billboard.

In the letter, which references several previouslyreported allegations of misconduct against Warner executives, Carvello’s lawyer writes that Carvello has “concerns that WMG’s management is not doing enough to investigate and act upon allegations of sexual misconduct at the company, and not monitoring the distribution of artist royalties in a manner that ensures sound accounting and payment. Both issues have the potential to expose the company to substantial liability and cause great reputational harm to WMG … [and] raise serious concerns about the truthfulness and accuracy of the company’s statements to investors.” The letter, dated Sept. 6, requests copies of all sexual misconduct allegations filed with the company, any settlement agreements and documents and communications related to such, though the company has no obligation to do so.

“We take allegations of misconduct very seriously and enforce policies that respect and protect people that raise concerns,” a Warner Music Group spokesperson said in a statement provided to Billboard. “WMG has an employee code of conduct designed to reinforce a safe, inclusive environment, and we continue to listen and learn for ways to stamp out discrimination and harassment from our industry. The allegations detailed in this letter have already been dealt with publicly, many of them were raised years or decades ago.”

Carvello — who, in 2018, wrote a book called Anything For A Hit: An A&R Woman’s Story of Surviving The Music Industry about her time as an A&R executive at Warner-owned Atlantic Records from 1987 until 1990, among other labels, which included sexual misconduct allegations against several former Atlantic executives including late co-founder and chairman Ahmet Erteguntold Billboard last October that she had purchased shares in each of the three major label groups with the goal of becoming an activist shareholder. “Now that I have skin in the game, I want to work with like-minded shareholders to bring more transparency to the music industry,” she told Billboard at the time.

She has also worked as an independent publicity consultant in recent years for a handful of major-label executives, though she says she now only represents one client in the music business, and she has stated that those clients paid her out of their own pockets, and that she is not paid by any of the major labels. She also met with a number of other top major-label executives following the publication of her book, but she says she never offered to work for those companies, nor did they offer her jobs. Her book is currently being developed for a docuseries.

The request, according to the letter, is so that Carvello and her legal team can “ascertain whether the company’s management is taking all measures necessary to investigate claims of sexual misconduct,” as well as “whether the company is engaged in a fraudulent scheme to divert to skim royalties from artists.” This claim stems from a recent class action lawsuit filed by classic rock band Orleans over “intercompany charges” on digital income derived from royalties accrued outside the United States, which claimed that Warner was delivering less than their contracts demanded. The letter presents this lawsuit alongside other royalty-related claims and issues from the 1980s and 1990s, when the company was under different management.

The letter centers on sexual misconduct allegations that span both Carvello’s own experiences in the late 1980s and early 1990s and those of others, which have led to two executives leaving the company recent years. Carvello, through her Face The Music Now Foundation, is also planning protests in both L.A. and New York against each of the three major labels: WMG, Sony Music Group and the Universal Music Group.

Carvello, as a shareholder of all three major label groups, says she intends to ask questions of the other labels as well, although, since Sony is incorporated in Japan and Universal is a publicly-traded company in Amsterdam, there are differing regulations and laws that pertain to them than do Warner, which is a publicly-traded company in the United States. “I am a David against a bunch of Goliaths,” she says. “One thing at a time.”

As a shareholder in the company, Carvello says that any improprieties in either situation could impact the company’s bottom line and reputation, and thus, any dividends shareholders might receive. The letter gives the Warner board members five business days to respond, and Carvello indicated if they do not respond or produce the records she would seek “appropriate relief to the fullest extent of the law.” While WMG has no legal obligation to release the records, Carvello says if she does not get a response she intends to file a legal claim in the Chancellory Court of Delaware to ask a judge to hear her concerns.