They should have no rights aside from that which you have granted to them as to the music itself. Obviously, they will have rights to the use of their name, image, etc., in reference to the name of the album, marketing of the album if their name is XXXXX XXXXX things that relate to their name and/or image.
For instance with, Stevie Ray Vaughn, Live from Carnegie Hall, you can guarantee that his record label had to in some way pay a royalty to Carnegie Hall for the use of their name. However, the rights to the original works of art are vested with the copyright owner, in that case SRV (or his label) and in this case you and your band (or your label).
I would suggest fighting this to the hilt. It might be advisable to locate a local attorney with knowledge of intellectual property law to draft a cease and desist letter on your behalf.
Hope this helps and best wishes.
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