Parviz Omidvar Plays Financier to Songwriters, Doling out Loans Repaid with the Artists’ Royalties, but His Terms Leave Some Clients Singing an Unhappy Tune

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Parviz Omidvar Plays Financier to Songwriters, Doling out Loans Repaid with the Artists’ Royalties, but His Terms Leave Some Clients Singing an Unhappy Tune ENTERTAINMENT Parviz Omidvar plays financier to songwriters, doling out loans repaid with the artists’ royalties, but his terms leave some clients singing an unhappy tune BY ROBIN RESpaUT AND AtoSSA AbraHAMIAN REUTERS ILLUSTRATION SPECIAL REPORT 1 ENTERTAINMENT THE MUSIC BANKER’S BIG SCORE LOS ANGELES, DECEMBER 6, 2012 which competes Omidvar, says it charges ter rivalry with the financier who introduced 13.88 percent interest a year and requires the “Bowie Bond,” the 1997 deal in which rom an office on Sunset Boulevard, that artists fit a strict set of criteria to qual- rocker David Bowie raised $55 million by a dapper 69-year-old has emerged as ify for a loan. The Houston company has selling debt backed by his future royalties. Fa go-to guy for musicians and song- about 50 clients, each making $100,000 or Omidvar and that financier, David Pull- writers looking for quick cash. more a year in royalties. man, have filed at least 11 lawsuits and His name is Parviz Omidvar, and over Omidvar says he currently has no out- countersuits against one another involving the past two decades, he has been lending standing loans at such high interest rates a handful of songwriter clients. Omidvar to artists and securing those debts with and that these practices are not representa- says Pullman is “obsessed with destroying royalty payments his clients earn from their tive of his business. He says rates on many our business” and that before Pullman came work. Michael Jackson was a customer, as loans were later reduced retroactively once along, there were “virtually no problems with is the son of late Motown legend Marvin he determined that the clients were capable clients.” Pullman says Omidvar and his sons, Gaye. Omidvar’s website carries an old tes- of repaying him in full. Oliver and O’Neil, who have helped their timonial from Rock and Roll Hall of Fame Complicating Omidvar’s business is a bit- father in his business, “blame everyone but member Bobby Womack: “Thank you so themselves for their illegal activities.” much for always being there for me.” Bobby Womack’s lawyer says the The music bankers are battling over a Today, Womack is suing Omidvar for musician (below) was misled into famously risky clientele: songwriters, of- fraud. He alleges the financier tricked him signing a deal when he was ten elderly and desperate for money. Times into selling for $40,000 full control of a roy- incapacitated have always been hard for musicians, and alty stream that annually pays many times by painkillers industry lore is studded with examples of that amount on Womack-penned hits, in- naive talents gouged by agents and record- cluding blaxploitation classic “Across 110th company operatives. Street” and “It’s All Over Now,” the first U.S. The Internet has added to the struggle No. 1 record for the Rolling Stones. Wom- as pirated downloads have eaten deep into ack’s lawyer says the 68-year-old musician sales of recorded music. Making matters was misled into signing the deal in April last worse, a long-term credit drought is year, when he was incapacitated by painkill- plaguing songwriters, musicians, ar- ers following prostate cancer surgery. rangers and producers. Omidvar calls Womack’s claim “a simple Decades ago, music publishers and case of buyer’s remorse.” Womack understood songwriter societies like ASCAP and he was selling his royalties, and his allegations BMI would advance money to artists are “a complete lie,” Omidvar says. against future earnings. By the late 1980s, they and the handful of banks in the busi- STEEP PRICE ness largely abandoned the practice as too Omidvar’s quick cash can come at risky. An artist’s royalty income can fluctu- a steep price. Reuters found scores ate greatly, depending on record sales, radio of loans with interest rates ranging airplay and licensing agreements. from 1.5 to 2.5 percent every 10 to 15 “It’s extremely difficult [for recording art- days - annualized rates potentially rang- ists] to get a conventional loan, because they ing from 43 percent to 81 percent. Many have a very unconventional working history,” loans included fees of up to 20 percent of says Bob Clarida, a copyright attorney. the principal, which could accrue interest FCZYK Omidvar fills this void. The idea is sim- at the same rate as the loan. In one lawsuit OSE ple: Advance money to artists, who sign over J brought by an Omidvar client, a California their royalty streams to his company. Omid- court found that one of the financier’s com- aron var then collects the royalties directly from panies had charged illegally high rates on record labels and music societies until the loans smaller than $5,000. debt is repaid with interest. On his website, By comparison, Artist Royalty Tracking, REUTERS/A he offers “immediate cash to music royalty SPECIAL REPORT 2 ENTERTAINMENT THE MUSIC BANKER’S BIG SCORE earners so they don’t have to wait months hospitalized for complications to receive their much-needed distributions.” from prostate surgery and placed Omidvar says he started out at an ac- on a morphine drip for two weeks, counts-receivable factoring company and fell his suit says. into the music business by chance. Clients It also says that the day after leav- say he wears formal suits and ties, setting him ing the hospital, Womack visited apart in casual Southern California. Omidvar’s office. Thinking he was “When you walk in, you feel like this guy simply borrowing money, the suit knows what he’s doing,” says Danny Pear- says, he signed away all his royalties son, a former client whose credits include for $225,000 to an Omidvar company the 1978 hit “What’s Your Sign Girl?” called Music Royalty Consulting Inc. Omidvar writes his loans as commercial After “costs and charges” were notes; interest rates on such notes, unlike deducted from the $225,000 loan those on short-term consumer loans, gen- Womack expected, the suit alleges, erally are exempt from regulatory rate lim- he received a check for $40,000 for “all its. While many of the notes carry maturi- past, present and future income” - a frac- ties of six months to a year, he says, most tion of what his royalties regularly bring are written with the expectation they will in annually, his lawyer says. Womack’s suit be paid off within weeks. “We don’t want claims he was confused because of medi- people to default in 30 days,” he says. “If we cation he was taking, and never would did that, we would be loan sharks.” have signed had he been of sound mind. Marvin Gaye III, the son and heir of the Omidvar, in an interview, says Wom- late soul singer, says that for 17 years, he ack “was in completely great shape” and has been a satisfied customer of Omidvar, understood he was selling his royalties. whom he calls “a really great guy.” “If you He notes that during the months pre- understand the contract,” he says, “there’s ceding and after the deal, Womack was no surprises.” performing in concerts, “dancing his heart out.” YouTube videos of live per- A HOST OF MALADIES formances in March and June of 2011 Bobby Womack’s family has a different show an animated and seemingly un- take. Womack started out in the 1960s as impaired Womack on stage. lead singer for doo-wop group the Valen- “Dementia and dancing are two dif- tinos. He went on to play guitar for soul ferent things,” says Jim star Sam Cooke and released hit singles like “Woman’s Gotta Have It,” “Har- ry Hippie” and “Across 110th GOLDEN OLDIES: Len Street.” Barry, Gene Page (and In the 1980s, Womack began his heirs) and Danny borrowing from Omidvar. His Pearson have all borrowed lawsuit says he took roughly 15 from Omidvar, pledging advances from Omidvar over the royalties from their past 25 years. long-ago hits. REUTERS/ By 2011, Womack was suffer- BRENDAN MCDERMID ing from prostate cancer, demen- tia, cataracts and other maladies, according to documents filed in the suit in Los Angeles Superior Court. In April that year, he was SPECIAL REPORT 3 ENTERTAINMENT THE MUSIC BANKER’S BIG SCORE Ryan, Womack’s lawyer. Ryan declined to Omidvar “told me that my dad make Womack available for an interview. told him to look after us. … The case is scheduled to go to trial in May I trusted him.” next year. California exempts most commercial Chris Page loans from usury caps. Even so, a jury in son of late musician Gene Page 2009 found that Omidvar had overcharged on loans of less than $5,000, which are sub- they misappropriated his trade secrets by ject to limits. issuing Bowie-like royalty bonds. That suit That case involved Daryl Cleveland, son was ultimately dismissed. He also filed of Motown songwriter Al Cleveland, who complaints about elderly neighbors in co-wrote Marvin Gaye’s mega-hit “What’s his New York City co-op, accusing them Going On” and Smokey Robinson’s classic of running an illegal bookbinding busi- “I Second That Emotion.” ness out of their apartment. Pullman Al Cleveland was a client of Omidvar’s. and the co-op entered litigation, and When Al died in 1996, Daryl, now 56, the board kicked Pullman out, setting kept up the borrowing, using his father’s a legal precedent allowing New York $100,000 annual royalty stream as collat- City co-ops to oust undesired residents. eral. In court documents, Cleveland said Pullman moved to Los Angeles shortly Omidvar promised that he would treat him thereafter.
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