Why Courtney Caved

Courney Love settled her suit against Universal instead of going to court – here’s why:

Rock star Courtney Love strode into the Beverly Hills Hotel in late February for the recording industry’s hippest party: the annual pre-Grammy bash thrown by music mogul Clive Davis. When she walked into the hotel, she had been at war with her record company, Vivendi Universal’s Universal Music Group, for more than a year.

So it was all the more shocking to the music industry heavyweights present that night to see Love plop down in a chair next to Universal Music Group President Zach Horowitz and settle in for a two-hour heart-to-heart talk. It was the first step in a seven-month-long negotiation that resulted in a complex settlement this week that freed Love’s rock band, Hole, from its recording contract and cleared the way for Universal to release new recordings by Nirvana, the iconic grunge rock band led by Love’s late husband, Kurt Cobain.

The two sides did not reach a settlement based on personal contact alone. Sources close to Love say she felt pressure to settle after losing a series of legal rulings in Los Angeles County Superior Court and felt her remaining leverage slipping away. Love also was facing legal bills in a separate lawsuit with the two surviving members of Nirvana.

Love sued Universal in February 2001, accusing her record company of using unlawful business practices to keep her locked into an unfair contract and cheat her out of royalties. Universal blasted Love’s claims as a publicity stunt and a negotiating ploy. The singer vowed to take the case to the Supreme Court if necessary to help the artists’ rights cause.

Love then filed another lawsuit to block Universal or her late husband’s former bandmates from releasing any Nirvana recordings. The two musicians, drummer Dave Grohl and bassist Krist Novoselic, countersued and accused Love of trying to wrest away control of Nirvana for use as a weapon in Hole’s contract dispute with Universal.

At Davis’ Feb. 26 party, as Love entered the hotel ballroom, her legal problems were near their peak. She was spotted by Lyor Cohen, chief of Universal’s Island Def Jam label.

Cohen approached Love and brought her over to a table full of Universal’s top executives. He seated her next to Horowitz, whom Love had never met.

“It was kind of a practical joke,” Cohen said. The moment was so uncomfortable that several Universal executives left the table. But then, the rock star and the executive began to chat.

Love told Horowitz that she believed marketing executives at Universal’s Interscope Records had broken their promises in the marketing of Hole’s album “Celebrity Skin,” which sold about 1.3 million copies, far below expectations.

“It was the first time there was a Universal executive willing to listen to what she had to say,” said James Barber, Love’s manager. Horowitz declined to comment Thursday.

Horowitz prodded Love to consider a deal and continue her career, sources said. The two parted still facing a court showdown. But the ice had been broken.

At the time, Love also was becoming isolated from the artists’ rights campaign her lawsuit had helped spark. The night of the party, the Recording Artists Coalition was staging a series of concerts with Elton John, No Doubt and other acts around L.A. to raise money for its campaign for fairer contracts and more accurate accounting of royalty payments. RAC sources say Love was invited to play a concert and declined; Love says she wasn’t invited.

What’s more, Love’s most powerful leverage against Universal–her role in the partnership that controlled Nirvana’s music–had begun to erode. Technically, it was unrelated to Hole’s dispute, but Love held an apparent ace: claims to an unreleased, and potentially lucrative, Nirvana tune believed to be the last song recorded by Cobain, “You Know You’re Right.”…

For more on Courtney and the case see here, here, here, and here.