Black Sheep Files Lawsuit Against Universal Music Over $750M Unpaid Royalties

[Michael's Black Son]

fukk it.

Cash out!

 

[BK The Great]

I’m wondering if this will break record labels as a collective. We are seeing artists gain more power than ever.

 

[get these nets]

New York judge dismisses Black Sheep lawsuit on Universal's Spotify equity​

Nov 21, 2023

A New York court has dismissed a lawsuit filed by rap duo Black Sheep which accused Universal Music of agreeing to take a lower royalty rate from Spotify in return for getting equity in the streaming firm - and in doing so reducing the royalties received by artists.

A New York judge yesterday dismissed a lawsuit filed by rap duo Black Sheep against Universal Music over the first deal the major label did with Spotify back in 2008. The rappers argued that Universal got Spotify equity in that deal in return for accepting a lower royalty rate, despite knowing that that would disadvantage its artists.
Judge Jennifer L Rochon said that Black Sheep members Andres 'Dres' Titus and William 'Mista Lawnge' McLean were far too late in filing their legal action against the record company because of an obligation in their record contract to file any litigation relating to royalty disputes within two years from when the disputed royalties were paid.
Black Sheep only filed their lawsuit in January this year, long after the 2008 Spotify deal they were taking issue with. And even if they restricted their claim to royalties that were due in the two years prior to filing, their legal arguments still fail, the judge concluded.
That’s because the wording of their record contract basically says that Universal can structure licensing deals around Black Sheep's recordings in any way it sees fit, providing it pays a royalty on income directly attributable to their music.
Black Sheep's lawsuit claimed that Universal Music agreed a deal with Spotify in which it accepted a lower ongoing royalty rate in return for receiving equity in the streaming business, knowing that the ongoing royalty payments would have to be shared with its artists.
“Universal is withholding hundreds of millions of dollars in royalties from artists", the lawsuit stated, "through a previously undisclosed arrangement whereby Universal licensed artists’ recordings to the Spotify music streaming service in exchange for Spotify stock and lower royalty payments”.
All the majors and indie label repping Merlin took equity in Spotify as part of their original licensing deals with the streaming company. They then had the option to sell that equity for profit when Spotify listed on the New York Stock Exchange in 2018.
However, the labels would almost certainly argue that the equity part of the deal didn't have any significant impact on the core revenue share part of the deal. Plus, ultimately, the labels committed to share the profits of the sale of the Spotify stock with their artists, even though arguably they were not contractually obliged to do so.
Rochon dismissed Black Sheep's case with prejudice, meaning they will not be able to file new proceedings on this dispute

 

[DrexlersFade]

That’s because the wording of their record contract basically says that Universal can structure licensing deals around Black Sheep's recordings in any way it sees fit, providing it pays a royalty on income directly attributable to their music.

Read them contracts

 

[Peabo Bryson]

I knew this would be the outcome. The language in those early 90's rap contracts is wild. They put shyt in there that protects and allows them to do pretty much anything with the masters. The labels were even covered for the development of digital and streaming formats back then by stating that they could release the recordings on ANY format that currently exists AND any format that may be developed in the future. All their bases were covered.

 

[King Sun]

 

[African Peasant]

an obligation in their record contract to file any litigation relating to royalty disputes within two years from when the disputed royalties were paid.

 

[L. Deezy]

well, their Masters revert in a few years.

they do 410,000 monthy users on Spotify which is cool for an artist that debuted in 91 and 1 HUGE record.

 

[Crumple]

New York judge dismisses Black Sheep lawsuit on Universal's Spotify equity​

Nov 21, 2023

A New York court has dismissed a lawsuit filed by rap duo Black Sheep which accused Universal Music of agreeing to take a lower royalty rate from Spotify in return for getting equity in the streaming firm - and in doing so reducing the royalties received by artists.

A New York judge yesterday dismissed a lawsuit filed by rap duo Black Sheep against Universal Music over the first deal the major label did with Spotify back in 2008. The rappers argued that Universal got Spotify equity in that deal in return for accepting a lower royalty rate, despite knowing that that would disadvantage its artists.
Judge Jennifer L Rochon said that Black Sheep members Andres 'Dres' Titus and William 'Mista Lawnge' McLean were far too late in filing their legal action against the record company because of an obligation in their record contract to file any litigation relating to royalty disputes within two years from when the disputed royalties were paid.
Black Sheep only filed their lawsuit in January this year, long after the 2008 Spotify deal they were taking issue with. And even if they restricted their claim to royalties that were due in the two years prior to filing, their legal arguments still fail, the judge concluded.
That’s because the wording of their record contract basically says that Universal can structure licensing deals around Black Sheep's recordings in any way it sees fit, providing it pays a royalty on income directly attributable to their music.
Black Sheep's lawsuit claimed that Universal Music agreed a deal with Spotify in which it accepted a lower ongoing royalty rate in return for receiving equity in the streaming business, knowing that the ongoing royalty payments would have to be shared with its artists.
“Universal is withholding hundreds of millions of dollars in royalties from artists", the lawsuit stated, "through a previously undisclosed arrangement whereby Universal licensed artists’ recordings to the Spotify music streaming service in exchange for Spotify stock and lower royalty payments”.
All the majors and indie label repping Merlin took equity in Spotify as part of their original licensing deals with the streaming company. They then had the option to sell that equity for profit when Spotify listed on the New York Stock Exchange in 2018.
However, the labels would almost certainly argue that the equity part of the deal didn't have any significant impact on the core revenue share part of the deal. Plus, ultimately, the labels committed to share the profits of the sale of the Spotify stock with their artists, even though arguably they were not contractually obliged to do so.
Rochon dismissed Black Sheep's case with prejudice, meaning they will not be able to file new proceedings on this dispute

I'm surprised Black Sheep found out about the details in Universal's deal with Spotify. All the intricacies. They did all that and unfortunately took over 10 years past the due date to file. It looks like they won something around 2008 is that true? Then from there they had two years to file a dispute.

It's wild that the judge closed the case just like that.

Nyt article but for messed up reasons.

All the best to Black Sheep.