Members of the Black Sheep, a Bronx hip-hop group, have filed a class action lawsuit against Universal Music Group over approximately $750 million in royalties.” The plaintiffs, Andres “Dres ” Titus and William “Mista Lawnge” McLean, allege a “breach of contracts when UMG inked a “sweetheart deal with the streaming platform, Spotify.” The group members claim the label accepted cash and company stock from Spotify so the streaming company could access Universal’s stable of artists. They also allege that UMG only counted the cash when it distributed royalty payments.”
The lawsuit states that the UMG-Spotify violated their 1990 original contract with Polygram, owned by Universal Music Group, that provided them 50% of all net receipts connected to the exploitation of the works of Black Sheep.
“In the mid-2000s, Universal struck an undisclosed, sweetheart deal with Spotify whereby Universal agreed to accept substantially lower royalty payments on artists’ behalf in exchange for an equity stake in Spotify – then a fledgling streaming service. Yet rather than distribute to artists their 50 percent of Spotify stock or pay artists their true and accurate royalty payments, for years Universal shortchanged artists and deprived plaintiffs and class members of the full royalty payments they were owed under Universal’s contract,” the lawsuit claims.
Universal Music Group, in response, said, “Universal Music Group’s innovative leadership has led to the renewed growth of the music ecosystem to the benefit of recording artists, songwriters, and creators around the world.” “UMG has a well-established track record of fighting for artist compensation, and the claim that it would take equity at the expense of artist compensation is patently false and absurd. Given that this is pending litigation, we cannot comment on all aspects of the complaint.”
– Excerpt from an article for The Black Enterprise by Cedric Thorton. Read the full article here.
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