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A prominent ’90s hip-hop duo is suing Universal Music Group for withholding royalties related to what they claim was a “lovers” deal the label struck with Spotify in the late 2000s. increase.
In a lawsuit filed Wednesday (January 4) in U.S. District Court in New York by attorneys for hip-hop duo Black Sheep members Andres Titus (Dres) and William McLean (Mista Lawnge), UMG has filed an agreement with the artist about It claims to owe $750 million. Royalties arising from Spotify’s stake in the company. They said that under his 2008 licensing deal between UMG and the streaming giant, the label agreed to receive lower royalty payments in exchange for shares in the streaming company that were accruing at the time. claims. However, Titus and McLean have said the label has violated contracts with Black Sheep and other artists, withholding what they claim is the artists’ rightful 50% cut of UMG’s now lucrative Spotify stake. , says it did not compensate them for the lower royalty payments they otherwise received. as a result of an alleged transaction;
“Instead of giving artists 50% of Spotify’s stock or paying them true and accurate royalties, Universal has, over the years, shortchanged artists and has been freed from plaintiffs and class members. , deprived Universal of full royalty payments due under its agreement,” the complaint reads. Titus and McLean further allege that Universal intentionally omitted from its royalty statements both its ownership of Spotify shares and the fact that his royalty payments were reduced as a result of the deal with the streaming service. there is
“Over time, the value of Spotify stock improperly deducted from artists by Universal has ballooned into the hundreds of millions of dollars,” the complaint continues. “By these and other misconduct detailed herein, the company violated its agreements with artists, violated the promises of good faith and fair dealing implied in those agreements, and caused harm to artists. and obtained an unfair advantage.”
In a statement sent to billboardA UMG spokesperson denied Titus and McLean’s allegations. UMG has a track record of fighting for artist compensation, and any claim to acquire equity at the expense of artist compensation is plainly false and absurd. As this is a pending lawsuit, we are unable to comment on all aspects of the complaint. ”
According to the lawsuit, Titus and McLean signed a record deal with Polygram in July 1990 (later amended in July 1991 and amended in July 1991) and released the hit rap single “The Choice Is Yours”. Revisited)”, a duo best known for being signed as Black Sheep. 1991 RIAA Gold Selling Album wolf in sheep’s clothingBlack Sheep’s record deal was taken over by UMG after the company merged with Polygram in 1998.
Citing 2018, UMG acquired a little over 5% stake in Spotify in a licensing agreement “in or around the summer of 2008” in exchange for a lower royalty payment, the complaint adds. global music business Report. In 2011, he claimed Universal acquired an additional stake in Spotify with its acquisition of EMI. Then, citing UMG’s own prospectus released in September 2021, it will invest approximately 6.49 million in Spotify shares worth €1.475 billion ($1.79 billion) as of June 30, 2021. It was revealed that the label owns the stock (about 3.35%).
However, it is worth noting that since June 30, 2021, UMG’s stake in Spotify has become significantly less profitable. As of Wednesday’s closing price, UMG’s stake in Spotify is currently worth only $560 million. That’s the result of a 70.5% drop in Spotify’s stock over the past 18 months. Notably, Spotify isn’t the only streaming service UMG has invested in. According to the same prospectus, he also owns his 0.73% stake in Tencent Music Entertainment, which is currently valued at $112.5 million.
The complaint contains Black Sheep’s July 1991 amendment to Polygram’s contract, which states that royalties due to Titus and McLean ” [Universal’s] Net proceeds relating to “exploitation” for “use or exploitation” of “master recordings” made by plaintiffs. Plaintiffs allege that they and other UMG artists thereby were entitled to receive 50% of the label’s Spotify stock, which UMG did not pay. , and stems from two broad assumptions that a portion of UMG’s stake in Spotify is not similarly indemnified.
Plaintiffs seek compensatory damages, punitive damages, and an injunction requiring UMG to “refrain from engaging in deceptive practices” or any other appropriate equitable statute, as outlined in the litigation. seeking relief from
UMG isn’t the only major label to acquire a stake in Spotify. In May 2018, Sony sold half of his 5.707% stake in Spotify for an estimated $761 million, while in the same month Merlin sold his entire stake for an unknown sum and shared the proceeds with members. announced. Warner announced in August 2018 that he would sell all of his 2% stake in the streamer for $504 million, with approximately $126 million in proceeds going to the company’s artists.
UMG has yet to sell its stake in the streaming giant.
– Additional report by Glenn Peoples
You can read the full lawsuit below.
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