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Black Sheep File $750M Lawsuit Against Universal Music For Unpaid Royalties

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According to an exclusive report from Rolling Stone, Native Tongue family favorites Black Sheep have filed a large class action lawsuit against Universal Music Group over unpaid royalties related to a side deal that the global music giant allegedly made with Spotify.

Black Sheep, which is Dres and Mista Lawnge, says that UMG owes them and their entire artist roster over $750 million for breach of contract after allegedly accepting cash and company stock from Spotify in exchange for music from their artists. Black Sheep claim that UMG only counted the cash given when distributing royalty payments.

Black Sheep also allege in the lawsuit that the “previously undisclosed” deal violated their deal with Polygram, a subsidiary of Universal, going all the way back to when they signed their original record deal. The lawsuit says that Universal owes 50 percent of all net receipts related to the duo’s music.

“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 equity stake in Spotify – then a fledgling streaming service,” the lawsuit states.

“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 continues, “For approximately a decade, Universal omitted from the royalty statements Universal issued to plaintiffs that it had received Spotify stock in connection with the ‘use or exploitation’ of Black Sheep recordings.”

A Universal spokesperson called the allegations “fake and absurd” in a statement to Rolling Stone.

“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,” the statement read. “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.”

Spotify did not respond for comment.

Universal owns a $1.7 billion stake in Spotify according to a 2021 Universal report and Black Sheep’s suit claims that a “substantial portion” originates from the shares Universal and its subsidiaries acquired in or around 2008.

The post Black Sheep File $750M Lawsuit Against Universal Music For Unpaid Royalties appeared first on The Source.

Classic Rap Duo Black Sheep Spearheads A $750 Million Class Action Lawsuit Against Universal Music Over Spotify Royalties

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Three-quarters of a billion dollars are on the line in a new class-action lawsuit filed against Universal Music Group, according to Rolling Stone. The suit is spearheaded by classic rap duo Black Sheep, who are best-known for their 1991 hit “The Choice Is Yours (Revisited).” The duo was also part of the Native Tongues collective which included A Tribe Called Quest, De La Soul, and Queen Latifah.

Their lawsuit alleges Universal Music Group accepted both cash and company stock from Spotify in exchange for its labels’ music, but only paid royalties to its artists from the cash received from Spotify, cutting artists out of more than $750 million in royalties. Black Sheep argues that this violates the original terms of their 1990s contract with Polygram (since folded into the UMG umbrella), under which the label would have paid 50 percent of all net receipts from Black Sheep’s music.

The suit claims, “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 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. For approximately a decade, Universal omitted from the royalty statements Universal issued to plaintiffs that it had received Spotify stock in connection with the ‘use or exploitation’ of Black Sheep recordings.”

According to the documents filed in Manhattan federal court, Universal valued its stake in Spotify at around $1.7 billion as of September 2021, with “substantial portion” of that coming from the above-mentioned deal. Since Universal could have withheld royalties from “thousands of artists” that have been signed to UMG’s subsisdiaries over the years, Black Sheep says they don’t know the “exact size” of the lawsuit’s possible class but that certification is forthcoming and that Universal’s records can reveal more information once subpoenaed.

The implications of this lawsuit could be massive, as streaming royalties have been at the center of numerous controversies at DSPs like Spotify, Apple Music, and Tidal for years.

Black Sheep Files $750Mil Lawsuit Against UMG Over Unpaid Royalties: Report

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Usually, it’s good to hear about iconic Rap groups, but Black Sheep isn’t surfacing for a walk down Hip Hop’s memory lane. Instead, the classic duo—which includes Andres “Dres” Vargas Titus and William “Mista Lawnge” McLean—is reportedly suing Universal Music Group. According to a report by Rolling Stone, the pair have filed a $750 million class action lawsuit against UMG over unpaid royalties.

Black Sheep claims that UMG worked out a deal with Spotify that shortchanged artists in the long run. Universal is accused of exchanging music from artists for cash and Spotify stock.

Read More: Universal Music Sued Over Royalty Payouts For Kanye West’s “Power”

The rappers also allege they weren’t advised of this side deal; thus, it violates their contract with UMG’s subsidiary, Polygram.

“In the mid-2000s, Universal struck an undisclosed, sweetheart deal with Spotify,” the lawsuit reportedly reads. “Universal agreed to accept substantially lower royalty payments on artists’ behalf in exchange for 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.”

NEW YORK, NEW YORK-October 1: Hip-Hop Duo Black Sheep’s Mista Lawnge (William McLean) and Dres (Andres Vargas Titus) appear in a portrait taken on October 1, 1994 in Brooklyn, New York City. (Photo by Al Pereira/MIchael Ochs Archives).
Read More: Universal Music Group Pulls Catalog From TikTok Rival Triller

Following Rolling Stone‘s report, a UMG spokesperson denied Black Sheep’s claims.

“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,” they said.

“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.”

[via]

Drake Reportedly Signed A New Deal With Universal Music Group For $400 Million

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The biggest star in hip-hop just made the biggest move of his career. Variety reports that Drake has signed a new deal with Universal Music Group that could be worth up to $400 million. During a first-quarter earnings call, the company’s chairman Sir Lucian Grainge announced the deal, which is described as an “expansive, multi-faceted” endeavor “that encompasses recordings, publishing, merchandise, and visual media projects.” Drake had completed the deal in 2021 but it looks like he won’t be taking Russ’ advice anytime soon after re-upping for a “Lebron-sized” payday, which Variety’s sources say could reach that above-mentioned figure.

Drake’s signing follows the announcement of a similar deal by his Toronto compatriot The Weeknd (who may soon be going by just Abel). Earlier this year, it was reported that The Weeknd had also signed a similar expansion of his prior deal with Republic (a subsidiary of Universal) which would likewise cover “recorded music, publishing, merchandise, and video.” These deals have become quite popular, according to Variety, as a way for major labels to keep the industry’s biggest stars under their umbrellas as technological advances and cultural shifts have begun enticing more and more artists to strike out on their own outside the label system (i.e. Russ).

Even among those who haven’t commanded the sort of mind-boggling streaming success Drake has, bigger deals are keeping rappers like Lil Durk and Trippie Redd closer to home. Not for nothing, Trippie Redd’s label, TenThousand Projects, is also a subsidiary of Universal, while Durk’s imprint, Alamo, is under Sony. If the major labels are throwing around this kind of money (while buying up pieces of the various DSPs), it looks like their continued dominance over the music industry will remain assured for some time to come.

The Weeknd Expanded His Partnership With UMG To Include Publishing, Merchandise And Audiovisual Releases

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Fresh off a massive headlining performance at Coachella, in which he was basically the only artist who could replace Kanye West after a last-minute cancelation, The Weeknd no longer has to prove his star power. The self-proclaimed Starboy (sorry, had to) is locked into a massive deal with Universal Music Group, who have doubled down on their partnership with the artist. Given his excellent new album, Dawn FM, and 2020’s massive release, After Hours, it’s not surprising that UMG now wants to partner with Abel Tesfaye on all “recorded music, publishing, merchandise and video.”

According to Variety, UMG will remain The Weeknd’s home for all things label-related, and take over his future music publishing rights once a deal with Kobalt expires. Universal’s merchandising arm, Bravado, will work with XO on “global merchandising, branding, ecommerce and retail licensing opportunities around future projects and releases.” Also, Republic and UMG will handle all future audiovisual projects. So basically, everything he might get into over the future course of his career.

UMG chairman and CEO Lucian Grainge said the following about the partnership: “Over the past decade, we have been honored to work so closely with Abel, who has quickly become one of music’s most creative and important artists—a once-in-a-generation talent. With Sal and the XO team as our incredible partners, we’ve developed a deep trust and respect that has enabled us to successfully execute Abel’s brilliant vision.”

Anderson .Paak Is Launching A New Label Called Apesh*t

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In a hilarious faux press conference posted earlier today on Instagram, Anderson .Paak announced that he’s launching a brand new label. Dubbed Apesh*t, he explained that the name is partly an acronym for “Anderson .Paak Empire” and a reference to the fact that “we on some other sh*t.”

A press release indicated that Apeshit is indeed a partnership with Universal Music Group and that Paak’s focus is on “no gimmicks, no button-pushing, just raw talent.” An unusual success story himself, this effort definitely feels like he’s trying to find other multi-talented artists that have gone undiscovered the way he was until he broke through on Dr. Dre’s Compton album in 2015, and then with his own album Malibu in early 2016. “I’m looking for artists that can captivate an audience,” he elaborated in the Instagram video. “I want musicians. I want people that can play instruments and perform at the same time.”

Apesh*t has a website up already proclaiming itself as “A disruptive platform for the most captivating talent in the world,” as well as a new Instagram account with upwards of 6,000 followers on its first day of existence. “Do you plan on signing artists from Korea?” one of the actors in the Instagram clip asked in Korean. Paak replied in Korean with “Yes lawd!”

It feels like strategic timing to introduce Apeshit to the world as An Evening With Silk Sonic, Paak’s album with Bruno Mars as Silk Sonic, is set to arrive on November 11th. As the video comes to a close, he looks at the camera and delivers a parting thought on the venture: “The game is crazy man. This industry can be like a jungle. Snakes, tigers, rainy days, hot days…What I’m trying to say is look: If the industry is like the jungle? Well, I guess we got no choice but to go APESH*T!”