UPDATE: Dr. Luke's legal team responded. See below.
Sony is caving to demands they drop Dr. Luke.
Sony Music will end their working relationship with Dr. Luke one year ahead of schedule because the scandal surrounding him and Kesha is a PR nightmare, reports The Wrap.
Not because it's the right thing to do?
“The fact that this hasn’t already been taken care of is confusing, especially for people in the building,” an insider said of Sony. “There is no contest. Kesha has no case in regards to her contract but they can’t afford the Adeles of the world out in the streets calling the label unsupportive,” said another source. “The fact that this hasn’t already been taken care of with Luke is confusing, especially for people in the building.”
Sony faces an uphill battle dissolving the contract because ultimately, both sides will need to come to a resolution. In a previous statement, Sony admitted they're powerless when it comes to negotiating Kesha and Luke's contract because they are "legally unable to terminate the contract to which it is not a party." Kesha's recording contract with Luke is "through a separate deal with his production company, Kasz Money Inc."
The decision ultimately falls on CEO Doug Morris and his boss, Sony Entertainment CEO Michael Lynton. If they decide to nullify the agreement, they would be in a direct breach of contract because, as a second individual close to the decision said of Luke, he has been “convicted via Twitter,” adding “no court has convicted this person, so there may not be any legal basis to terminate an agreement. It would have to be mutual.”
That's unlikely. Attorney Dina LaPolt said last month Dr. Luke “will lose everything to clear his name. Should he compromise? I think so, but he will go down with the ship.”
— Lady Gaga (@ladygaga) March 9, 2016
Sony must now decide if their contract with Kesha is worth losing out on potential revenue from future signees who decided against joining because they may fear they'll be put in an unsafe environment to create music.
“If they feel other well-known artists won’t sign with them in the future, they’ll take that into consideration in the economic analysis,” attorney Mark Passin said, adding one way Sony might compromise is by "reducing the number of remaining albums Kesha owes in her contract in exchange for a payment upfront and/or a royalty on future albums with whatever record label she signs with."
LaPolt believes Sony will take action one way or another. “I wouldn’t be surprised if there’s an announcement in the next couple of weeks that Sony has separated itself from his label,” she says.
UPDATE: Luke's lawyers tell TMZ, "Luke has an excellent relationship with Sony. His representatives are in regular contact with executives at the highest levels at Sony, and this has never come up."