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A new report by Eurogamer says that the original Halo music composers, Marty O'Donnell and Mike Salvatori, are suing Microsoft over unpaid royalties. Some of these royalties seem to date back roughly 20 years according to the lawsuit.
Lawyers for O'Donnell and Salvatori filed this lawsuit back in June 2020 with a Washington state court. Next week, mediation is scheduled to begin but if no agreement is reached, the dispute may be headed to a court trial.
Furthermore, the pair have also instructed their lawyers to look into possibly blocking the release of the upcoming Halo TV series with an injunction.
The lawsuit itself includes six causes of action against Microsoft: Breach of contract, breach of fiduciary duty to develop the royalty income in a joint venture, breach of duty to act in good faith and fair dealing, failure to provide an accounting partnership, unjust enrichment, and tortious interference.
In speaking with Eurogamer, O'Donnell claims that he and Salvatori worked for more than a decade to "get much clarity" on the royalties situation. He says that the pair created and licensed the music to Bungie, a deal that remained in place after Microsoft's acquisition of Bungie in 2000. O'Donnell claims that he and Salvatori, operating as O'Donnell Salvatori Inc., created and licensed the music to Bungie.
Microsoft claims the Halo music qualifies as a work-for-hire and as such Microsoft qualifies as the author of that work. O'Donnell disputes that claim.
O'Donnell and Salvatori dispute this. "It was never work-for-hire," O'Donnell said. "It was always a licence deal. So that's what we did with Halo. With the first Halo music ever, that was written and recorded in 1999 for the first time. It was licensed to Bungie. Bungie didn't get bought by Microsoft for over a year."
Ten days after being hired by Bungie, the studio itself became a part of Microsoft. Thus, O'Donnell also became a Microsoft employee as a result. It was around this time that O'Donnell claims the contract problems began.
"On day one of signing my employee contract, I wrote this addendum at the back where you're supposed to, and I said, by the way, the Halo music up to now is licensed, it's owned by O'Donnell Salvatore, Inc., and I'm an ASCAP (American Society of Composers, Authors and Publishers) composer. And that's the way it needs to be going forward.
"And immediately, I was segregated out from all the other people and I was shunted into a little room with Microsoft biz guys and attorneys or who knows what? And they wanted me to explain what I was talking about.
"And I told them, 'Look, what you bought was a licence deal for this music. They never had had an internal composer who wrote original music as an employee, so this was all new for them, too.
"And so I was like, 'Hey, if you guys can't handle this, no harm, no foul, I'll go back to Chicago and, you know, maybe I can freelance this stuff. I didn't know. But they said, 'Okay, we'll let you do ASCAP music and we'll deal with the licence later on this music, because like, how much of this music is going to be used in Halo?'
"This is 2000, so it's more than a year before we released. And I remember saying, 'I have no idea, I don't know.' But if they made a mistake on that first initial conversation with me, it was that somebody should have said, 'Well, who's going to make the decision on how music is written and used in this game?' Because then I would have said, 'Well, that'll be my decision. I have a vested interest at this point to use this music for the game.'
"But at the time, we'd only used that music for a couple of trailers that were, you know, pretty popular, but I didn't know if the stickiness of the monk chant and the theme would actually be appropriate to the final game. I just didn't know yet. I hoped it would be. I wrote it so it would be.
"That's when it first started. And they said, 'Yes, we will deal with this later.' And believe it or not, I couldn't get anybody's attention to deal with the fact that this was officially-licensed music until after we shipped Halo 1.
"And I kept saying, 'Hey, we need to deal with this.' O'Donnell Salvatori actually paid the musicians for all the work that we did with live musicians in Chicago, and then ran those bills in through Microsoft. We were the union signatory for the voice talent, which was all union, and O'Donnell Salvatori, my company, was the union signatory on all the voices in Halo 1.
"And I kept saying, 'You know, we need to deal with this. It shouldn't be O'Donnell Salvatori doing this stuff. It should be Microsoft.' I just couldn't get anybody's attention until we finally got around to convincing them that there should be a separate soundtrack, for example.
"That's when that first new contract came in, where we were like, 'Yes, we will sign over the publishing rights and the copyright on this music for Halo to Microsoft.' However, I wanted to do it the way it's done in movies and television, where the composers are still ASCAP composers, and it's not a pure work-for-hire. There is a contract for any ancillary royalties - so use in commercials, use in anything outside the game, specifically, or sales of soundtracks.
"O'Donnell Salvatori is supposed to get 20 percent of anything outside the game that uses the music. Which is, by the way, actually reasonable. A lot of composers and music people in the movie business get more like 50 percent.
"So I was like, 'Look, we'll do it for 20 percent.' And, along with that, there should be some sort of quarterly accounting where we can see, here's where you've used it, and here's what you've received, or here's what you received in kind - like if you did a deal with Doritos, or Mountain Dew in some sort of barter exchange - there's still some monetary value that should accrue to the original composers.
"It's just the typical music business deal. That's what we thought we wrote into the contract. And 20 percent of course of soundtrack sales - so we were expecting, quarterly, to see - this is how simple it would have been for us - 500 soundtracks were sold at $10 a soundtrack, Microsoft made $9 - or let's say $11 and Microsoft made $10. And, here's your cheque for $2 per soundtrack to O'Donnell Salvatori, so we could see the number of soundtracks sold, and here's our 20 percent. We never got that kind of accounting for decades, if you can believe it."
"And immediately, I was segregated out from all the other people and I was shunted into a little room with Microsoft biz guys and attorneys or who knows what? And they wanted me to explain what I was talking about.
"And I told them, 'Look, what you bought was a licence deal for this music. They never had had an internal composer who wrote original music as an employee, so this was all new for them, too.
"And so I was like, 'Hey, if you guys can't handle this, no harm, no foul, I'll go back to Chicago and, you know, maybe I can freelance this stuff. I didn't know. But they said, 'Okay, we'll let you do ASCAP music and we'll deal with the licence later on this music, because like, how much of this music is going to be used in Halo?'
"This is 2000, so it's more than a year before we released. And I remember saying, 'I have no idea, I don't know.' But if they made a mistake on that first initial conversation with me, it was that somebody should have said, 'Well, who's going to make the decision on how music is written and used in this game?' Because then I would have said, 'Well, that'll be my decision. I have a vested interest at this point to use this music for the game.'
"But at the time, we'd only used that music for a couple of trailers that were, you know, pretty popular, but I didn't know if the stickiness of the monk chant and the theme would actually be appropriate to the final game. I just didn't know yet. I hoped it would be. I wrote it so it would be.
"That's when it first started. And they said, 'Yes, we will deal with this later.' And believe it or not, I couldn't get anybody's attention to deal with the fact that this was officially-licensed music until after we shipped Halo 1.
"And I kept saying, 'Hey, we need to deal with this.' O'Donnell Salvatori actually paid the musicians for all the work that we did with live musicians in Chicago, and then ran those bills in through Microsoft. We were the union signatory for the voice talent, which was all union, and O'Donnell Salvatori, my company, was the union signatory on all the voices in Halo 1.
"And I kept saying, 'You know, we need to deal with this. It shouldn't be O'Donnell Salvatori doing this stuff. It should be Microsoft.' I just couldn't get anybody's attention until we finally got around to convincing them that there should be a separate soundtrack, for example.
"That's when that first new contract came in, where we were like, 'Yes, we will sign over the publishing rights and the copyright on this music for Halo to Microsoft.' However, I wanted to do it the way it's done in movies and television, where the composers are still ASCAP composers, and it's not a pure work-for-hire. There is a contract for any ancillary royalties - so use in commercials, use in anything outside the game, specifically, or sales of soundtracks.
"O'Donnell Salvatori is supposed to get 20 percent of anything outside the game that uses the music. Which is, by the way, actually reasonable. A lot of composers and music people in the movie business get more like 50 percent.
"So I was like, 'Look, we'll do it for 20 percent.' And, along with that, there should be some sort of quarterly accounting where we can see, here's where you've used it, and here's what you've received, or here's what you received in kind - like if you did a deal with Doritos, or Mountain Dew in some sort of barter exchange - there's still some monetary value that should accrue to the original composers.
"It's just the typical music business deal. That's what we thought we wrote into the contract. And 20 percent of course of soundtrack sales - so we were expecting, quarterly, to see - this is how simple it would have been for us - 500 soundtracks were sold at $10 a soundtrack, Microsoft made $9 - or let's say $11 and Microsoft made $10. And, here's your cheque for $2 per soundtrack to O'Donnell Salvatori, so we could see the number of soundtracks sold, and here's our 20 percent. We never got that kind of accounting for decades, if you can believe it."
In this lawsuit, O'Donnell claims that he and Salvatori received royalties from Microsoft on a quarterly basis over several years. However, the payments were allegedly not connected to any metric that showed how many units were sold or if any other deals were done.
"We started getting kind of suspicious because we were like, 'I think the Halo 2 soundtrack really sold a lot, but we don't have any numbers that show how many units were sold.' How many digital downloads happened on Amazon or YouTube or iTunes? We have no numbers.
"And then the cheque we would get seemed like, okay, if this is 20 percent, then it doesn't seem like Microsoft is really making much money. So we would say, 'Could you guys tell us what the numbers are?' And then they just wouldn't. But sure enough, four months later, you would get another little cheque, and just, 'Here's your amount.' But it wasn't connected to anything.
"It just just seemed to us like, well, wait a minute, what about Halo 1 Anniversary? You guys did a whole new soundtrack. Then you did a whole new compilation. How much did you make on that? And what happened when you did the anime version? And these other films that you did, which are ancillary? They're not the game. They're ancillary to the game. They did tons of different films that had the music in it. And video projects and stuff. And we never saw any accounting about that."
"And then the cheque we would get seemed like, okay, if this is 20 percent, then it doesn't seem like Microsoft is really making much money. So we would say, 'Could you guys tell us what the numbers are?' And then they just wouldn't. But sure enough, four months later, you would get another little cheque, and just, 'Here's your amount.' But it wasn't connected to anything.
"It just just seemed to us like, well, wait a minute, what about Halo 1 Anniversary? You guys did a whole new soundtrack. Then you did a whole new compilation. How much did you make on that? And what happened when you did the anime version? And these other films that you did, which are ancillary? They're not the game. They're ancillary to the game. They did tons of different films that had the music in it. And video projects and stuff. And we never saw any accounting about that."
"I mean, part of our contract even said, 'If you're going to re-record any of our stuff you need to contact us, talk to us about it or give us some sort of information.' We've heard nothing. Look at Halo Infinite. That first trailer that came out and the announcement of Halo, you saw Master Chief's leg come in, and the piano went 'gung, gung, gung, gung gung gung', which, not only did I write but I played and I fought for back during 2007 Halo 3 days.
"I haven't seen Mike's name or my name on any of the pieces. Most people know, well, this is Marty and Mike's music, right? I mean, people who care about it or paid attention, they go, 'Hey, this is great. We're hearing Marty and Mike's music again.' But they're not crediting us or giving us 20 percent or accounting for it or anything. So part of the lawsuit is to discover what the damages should be."
"I feel disrespected," Salvatori told Eurogamer in a phone interview.
"I haven't seen Mike's name or my name on any of the pieces. Most people know, well, this is Marty and Mike's music, right? I mean, people who care about it or paid attention, they go, 'Hey, this is great. We're hearing Marty and Mike's music again.' But they're not crediting us or giving us 20 percent or accounting for it or anything. So part of the lawsuit is to discover what the damages should be."
"I feel disrespected," Salvatori told Eurogamer in a phone interview.
