Music Mega-Lawyer Peter Paterno on Metallica Suing Napster, Working With Dr. Dre and a Young Britney Spears, and His E.L.I. Honor
By Jem Aswad,2023-02-02
Veteran music business attorney Peter Paterno ’s client list is dazzling enough — Dr. Dre, the Tupac Shakur estate, Metallica, Van Morrison, Blink-182, Twenty One Pilots, Skrillex, Tyler the Creator, Q Tip, Rage Against the Machine, Alice in Chains, Linda Ronstadt, Roddy Ricch, Sia, the Henry Mancini Estate, Shirley Manson, Alanis Morissette, Tori Amos and many others over the course of a 40-something year career.
Yet what’s not revealed in that list are some of the pivotal journeys he’s been on with them — sure, plenty of label contracts and every variety of deal, but also working as a young Prince’s first major music-industry attorney; representing Metallica as they (rather unsubtley) attempted to set ground rules for the streaming age by suing first Napster and then fans who’d downloaded their music without paying; and just last month heading up Universal Music and Shamrock’s acquisition of a key Dr. Dre catalog .
It’s no surprise that the Recording Academy Entertainment Law Initiative is honoring Paterno, partner at King, Holmes, Paterno & Soriano, with its 2023 Entertainment Law Initiative Service Award, presented each year to an attorney who has demonstrated a commitment to advancing and supporting the music community through service.
“Peter’s longtime commitment to the music business and his ability to confidently navigate the intricacies of our industry make him an outstanding recipient of the ELI Service Award for this year’s 25th anniversary event,” said Neil Crilly, managing director of industry leader engagement & chapter operations at the Recording Academy. “I applaud ELI’s Executive Committee for recognizing a leader whose expertise has helped countless artists succeed in their careers and who has supported the music industry through eras of change.”
Paterno came to the music industry on a unique path — trained as a mathematician, he left a job writing software for NASA in order to attend law school. Apart from a stint as CEO of Disney’s Hollywood Records in the early 1990s, he’s been at it ever since: according to his bio, he has “nurtured the careers of dozens of multi-platinum recording artists, structuring, negotiating and documenting the myriad of agreements required by successful artists. He is also intimately involved in the formation, purchase and sale of numerous entertainment companies ranging from production, publishing, recording and film companies to merchandise and consumer electronic enterprises” — that would be Beats by Dre and its streaming service, which became Apple Music.
Paterno graduated with distinction from Harvey Mudd College in 1972 with B.S. in mathematics, then the University of Hawaii (M.A. in mathematics 1973), and University of California at Los Angeles (J.D. 1976). We’ll let him take it from there.
What in your background led you to law school and music?
I went to school at Harvey Mudd College, where the people were incredibly smart. In my senior year, there’s this fellowship that you apply for if you’re a mathematician and you’re going on to do graduate work — and six of the top mathematicians in the United States were in my class. I realized I was never going to be the world’s greatest mathematician, so I decided, maybe I should find someplace where I could be as smart as the other people, and law school seemed like an appropriate avenue.
Nearly every lawyer says law school was the worst time of their lives — it was actually easier for you than being a mathematician?
Yeah! I walked into law school on my first day and I went home thinking, “I’m smarter than these people — this is great!,” after having felt like a stepchild for four years.
Why did you decide to start your own law firm out of college instead of joining an established one?
The idea of working for a corporate firm didn’t totally appeal to me — I’d done summer clerkships mostly and, you know, real law students would go to real life law firms and get real summer internships. But I went to the Department of Housing and Urban Development and the State Energy Commission for my summer jobs. I recall one of the interviews where the guy said to me, “What have you done in extracurricular activities that would qualify you for a future as a lawyer?” I said I’d run the speaker’s program for UCLA law school, I was student bar president — and I can see where he’s going. So he said, “Why wouldn’t you do something that would prepare you more properly, like law review?” And I went, “Yeah, well, I walk past the Law Review office every day on the way to my classes, and those guys are some of the biggest jerks on the planet.” He looked at me and said, “I was the editor of the UCLA Law Review in 1966” — and by the time I got home they had messengered my rejection letter. I felt like maybe big law was not the place for me.
Did you start off working in music at your firm?
No, no, I started my own law firm and I did whatever walked in the door: dog-bite cases, probate, DWI, whatever, which it turned out was actually good background training for being a music lawyer.
Because as a music lawyer, your clients just look at you as a lawyer — they don’t realize there’s aspects of the law you know nothing about. So I could fake my way through pretty much everything. But doing dog-bite cases, probate and DWI was really not very interesting. So my current partner, Howard King, was working in the music department at at Manatt, Phelps & Phillips and wasn’t enjoying it in the least. One day he called up and said, “If you know somebody wants to be a music lawyer, there’s gonna be an opening here — I’m quitting.” I knew some of the people there because I’d gone to law school with them, I applied and several months later, they said, “Well, we couldn’t find anybody better.”
What in your background do you think makes you a good lawyer? Mathematics doesn’t seem like a common path.
Well, people don’t really understand this, but math is actually very good training for drafting contracts. It’s the same kind of logic. If you look at math, it’s not really about about arithmetic and multiplying and adding, it’s really about proving theorems and the logic that you apply to doing proofs, and math is very similar — the logic and rigorous approach you apply to writing a contract. So it turns out, it’s a translatable skill — if you’re not a total math nerd and can actually talk to real people. And I’m a huge music fan, I’ve been in bands, although I’m pretty untalented. So the chance to actually interact with my idols was obviously very exciting for a young lawyer.
A young Prince was your first big-ish client, right?
At the firm I did whatever they dumped on my desk — you know, the service lawyer. And one of the things they dumped on my desk when I first arrived were these three big green files, and one was Prince. Nobody knew who Prince was at the time, so “Let the young guy work on these unimportant clients!” He didn’t remain unimportant for long. There were other clients that worked on, like Linda Ronstadt or Jackson Browne, it was really exciting to do that work.
Was there much personal interaction with them?
It started out with paperwork, since I was a day to day guy, but Lee [Phillips] was generous enough to let me actually talk to the people, and I did get to meet them and know them, and Prince actually more than the rest, he would mostly talk to me.
So this was 1978-’79, his first couple of records? What was he like?
Yes, exactly. Well, he was very quiet and shy at first, but if you got to know him, he talked an awful lot. I remember the first time I met him, he came into the office to see Lee, and Lee had a secretary named Jean. At the time Prince was starting to break through in the [Black music market] but most white people hadn’t found him yet. So when he came in, Jean came up to him with the album cover and said, “Prince, my 12-year-old niece would love to get your autograph?” He said “Sure, what’s her name?,” and ended up writing, “Dear Stacy: Stay wet. Love always, Prince.” (laughter)
Yo u worked a lot with David Geffen around that time as well?
Yes, as I said I was a big music fan and paid attention to the music business. I knew who David Geffen was because he managed a lot of the people that I really liked at the time. So when he was starting Geffen Records [in 1980], I went to Lee and said, “I know I’m only a second year lawyer, but I really, really, really would like to work on this project.” And so I ended up getting to work with David, who’s one of the smartest guys I’ve ever dealt with.
His instincts were uncanny. I mean, even if he didn’t appreciate the music, he knew what a star looks like. Even when he would acquire art, he would acquire it in advance. When I was around, he started acquiring Tiffany lamps — we’d say, “What are you doing with all these Tiffany lamps?” and he’d spend $100,000 on one and then sell it for a million.
Metallica was your next major client — I’ve heard you say that their contract with their first label, the indie Megaforce Records, was more restrictive than major-label ones?
Oh, yeah, it was horrible. I think Jonny Z [Zazula, Megaforce founder] was a good guy, it’s just how they did business. And it was my job was to get them out of those contracts, which I eventually did, and in fairly short order. By the time I had, Megaforce had already pressed up all 75,000 units of [the group’s second album, “Ride the Lightning”], so I said, All right, you know, we’ll let you sell those off.
And Megaforce also got points on future albums?
Yeah, as part of the settlement they got an override.
And Guns N’ Roses were next?
Yeah, they were somehow getting courted by [late, legendary music industry eccentric] Kim Fowley, and they met with some lawyer that Kim had recommended and they were talking about doing some really awful deal with him. Then I met them and they hired me and ended up not doing that deal.
Was there a big buzz on them yet?
It depends on what you mean by big. I had heard about them from their manager at the time, and then I was having lunch with [Geffen A&R exec] Tom Zutaut, and he said “They’re playing the Troubadour at 10 o’clock on Friday, why don’t you meet me there?” So I got there at 10 o’clock and of course, in true Guns N’ Roses fashion, the band playing before them hadn’t even gone on yet. So I’m looking at, like, one in the morning and I’m thinking, “I have a day job, I really can’t do this.” But I looked around and saw there were like 10 or 12 A&R people hanging out — “Wow, maybe there’s something going on here.” So we went [next door] to Dan Tana’s, killed a couple hours, came back and saw the band, hung out with them afterwards and ended up working with them.
A few years later, your profile had risen so much that you were hired to run Disney’s Hollywood Records. Did you like running a record company?
Yeah, I kind of did. Although you know, at the time running the record company is probably not as stressful as it is today, and certainly not as stressful as it was 10 or 15 years ago. Running a record company in the ‘90s was actually not terrible.
Did your skills translate into that role well?
Well, apparently, based on the results, not so well. But I actually think that by the end of it I was doing a pretty good job, but some people would not agree. In terms of my skills as an attorney, I certainly think we were easy to make deals with because I came from an artist’s perspective. But we didn’t find enough of the right artists, and sadly, I found most of the ones that we found, which is not good when you’re 40 years old.
But that’s where you first met Dre, and got him to work on the Party, a group with a young Britney Spears in it?
So one of my ideas when I started Hollywood Records was, you know, they had a Mickey Mouse Club, and these kids, it turns out, were sometimes very talented. So my idea was, look, we have this Mickey Mouse Club, it’s Disney, we’ve got a vehicle for television. Why don’t I put a group together, sort of recalling the [1950s era sitcom] “Ozzie and Harriet” show where Ricky Nelson would come out and do a song, which was great promotion. So we picked five kids, and one of them was Britney. Now, they hadn’t told me that they had a sort of Menudo system at Disney when the kids got to be 12, so when I wanted Britney in the group, they said, “Oh, you don’t understand, she’s got to be on the Disney Channel for the next three years.”
What was she like?
Very talented, but I mean, she was 12.
How did Dre make sense for a group like that?
That was me and my crazy A&R ideas. I knew he was really talented, but he was in the middle of a lawsuit with Jerry Heller [distributor of N.W.A’s original label] and he couldn’t really make any money. So I decided to use Dre, and was able to make a deal and he produced one track by the group, which was called the Party, called “Let’s Get Down to It,” and it turned out really great. I mean, in typical Dre fashion he took nine months to get it done. As you probably know, he’s very critical of stuff.
Did you continue working with him from there?
That was just the first introduction, I actually worked through Suge [Knight, Death Row Records founder] mostly. It wasn’t until later, after I left [Hollywood] and was going back to being a lawyer, that that Dre was looking for one and Jimmy [Iovine] and David Cohen at Interscope suggested me, and he said, “I know that guy.” We had a meeting, he decided he was gonna hire me, and we’ve worked together ever since.
Did you want to go back to being a lawyer, or would you have preferred another label post?
To be really honest, I would love to have had another executive job — it was much more pleasant than being a lawyer. But I will say that my period in that job was controversial — that’s an understatement — so I think, on some level, I was a little bit of damaged goods. At least, unlike prior lawyers who become label heads — there were a number of private practice lawyers that got hired into run record companies, and it did not turn out well — I was able to actually start a law practice again. I went back to being a lawyer and it’s worked out okay.
What was the controversy over?
Well, first of all, before I got hired, there was a there was a campaign to keep them from hiring me, because I wanted to sign rap groups and heavy metal, and that would ruin the Disney image. Then there was the fact that we did not exactly have massive success, and [comments he made at] some appearances I did. And then there was a memo I wrote to [Disney’s then-CEO] Michael Eisner that was seven pages of “get off my back or find somebody else” that ended up getting leaked. So that caused a lot of consternation.
I would expect so.
There were a lot of things, actually. But like I said, at the end of it I thought I was actually pretty good at the job. And I did sign a few things that worked out pretty well for them — like Queen.
Actually, Michelle Jubelirer at Capitol is a current former attorney running a label.
I think she’s doing a really good job. She’s gonna be the first person to make it work.
But several attorneys have run successful labels.
Not people from private practice — not that I can think of.
Anyway, so I finally decided I wasn’t gonna get a real job, and I had to accept the fact that I was a lawyer. Most of my clients that I had left when I went to the record company came back — Metallica, Soundgarden, Alice in Chains.
I assume you were very involved in Metallica suing Napster?
And when they started suing fans for illegal downloading?
Did you think that was fair?
Because they were basically thieves! It’s not a popular opinion. The popular opinion now is a sort of revisionist history that we shouldn’t have sued Napster, we should have worked something out with them — well, no, there was nothing to work out with them. “You could have made a deal.” What was the deal? People were getting music for free. It was really necessary in order to set the ground rules for what music is worth. Those fans aren’t fans — fans pay for music and appreciate its value. It’s like Dre said when we told him about Napster,” he said, “I work 24/7 in the lab and these guys just steal it? Screw them.”
It’s hard to disagree with that.
Well, a lot of people do. A lot of people think that’s really a radical stance, but we went from a business that was doing $30 billion a year to doing a third of that in three or four years because of people’s creativity not being rewarded. I’ve never agreed with that.
It took the industry 15 years to really figure out streaming. Do you think there are things that could have been done earlier?
I don’t know if you remember, but they did try. They tried to develop this thing called Press Play, but record companies don’t do technology, they needed a technology company to figure it out. So I think was on some level inevitable that it went the way it did. And like I said, I think the key to all the lawsuits was to at least establish some ground rules about what you have to do in order to distribute music and have creators get paid for what they do.
What does receiving this honor from ELI mean to you? Is it a significant thing?
Oh, of course. I mean, it’s a recognition for having lived for a long enough time. (laughter)Best of Variety
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