It is the best way to get back at the artist. Have them turn in a record that is supposed to be the single, shoot a video, put a ton of marketing and promotion money behind it, and then say, “You know, we did our best, but people just did not respond. Let’s try again.” And they do that repeatedly (rinse and repeat). Meanwhile, the artist is racking up a ton of debt owed. That is the reason he did not recoup. They set him up. They played this game numerous times under the guise of trying to do right by him and keep working until the right single hit. The reality was; they were never actually trying at all. But they sure were (legally) charging him for the work.
Edit: And they did not care about the bottom line because music was their least profitable division (and it was so even prior to the sale of WMG). I cannot recall the exact percentage, but it was next to nothing. Film and television (Time Warner) made their music division disposable. In 2003, I was actually told by another executive (an employee) that they could shut Warner Music Group down and it would not hurt them at all. It was at the bottom of their list (he showed me the list — it was indeed the last entry).
Keep in mind this was when music was much more profitable than it is now.
Their entire strategy to get back at Mike was to keep putting money into that album so that there was no way he could ever recoup. That was the plan. They wanted him to owe them money. That was their plot for what they considered his defiance. And Mike’s words to me before that meeting were, “I’m sitting on millions. I’m not worried.”
The problem is they sit on billions. Warner is the type of company you will sue for $15,000, and they will spend 1.5 million just to keep you from getting the 15K.