Business
Page: 118
Sorry, kids — Live Nation’s antitrust issues have nothing to do with how hard it is to get Taylor Swift tickets. Those are expensive because there just aren’t enough for everyone who wants to see the show, and the antitrust lawsuit against Live Nation won’t change that — and it might not even change the cost of tickets. What it could do, though, is reshape the way the U.S. concert and ticketing businesses work — as well as how they work together.
The lawsuit, filed by the Department of Justice and more than two dozen states, alleges that Live Nation colluded with the venue management company Oak View Group, threatened potential rivals, locked venues into long-term agreements with Ticketmaster in a way that shuts out competitors, restricted promoters’ access to its venues, and acquired companies to reduce competition. There’s a lot there.
Live Nation, at least according to the lawsuit, operates less like a concert promoter than a live entertainment platform — one that uses its dominance in some sectors to secure or further its dominance in others by making it hard for other companies to separate out its services. The most relevant comparison, at least in legal terms, might be the Microsoft antitrust case. Almost all of the behavior described in the lawsuit takes place outside of public view, but the Department of Justice argues that it reduces competition, and indirectly raises ticket prices for consumers. The first of these seems very likely, at least based on the descriptions of company policy in the lawsuit, but the second is less clear. Based on the thriving secondary market, concert tickets still seem to be underpriced.
Trending on Billboard
The common complaint about Live Nation is that it controls too many venues, and that Ticketmaster has too large a share of the ticketing business, especially in ways that annoy the hell out of consumers. Those factors may be less important than they seem, though. Most areas only have so many venues, and it’s not entirely clear how much sense it might make to have more than one ticket retailer handle each show. (It’s far easier to argue that companies in the primary market shouldn’t enter the secondary market, and vice versa.) And since a share of Ticketmaster fees end up going to promoters or venues anyway, cutting them could just end up shifting costs to the face-value price of tickets. I hate the extra charges on budget airlines, but eliminating them would just make tickets more expensive.
The more serious issue is how Live Nation uses its market power. Ticketmaster signs long-term contracts with venues in exchange for exclusive ticketing rights, which has been an issue since Pearl Jam took on the practice three decades ago. But the most damning parts of the lawsuit, to which Live Nation will respond before the end of summer, involve issues that haven’t received as much attention. The Department of Justice alleges that Live Nation restricts artists from performing in its venues unless they also use the company as a promoter and presses venues to sign exclusive deals with Ticketmaster. This kind of behavior is an important part of what antitrust law is designed to prevent — wielding the leverage that comes from dominance in one market to gain an unfair advantage in others. The government would need to prove its case, though — and antitrust cases can be hard to win.
The lawsuit alleges that Live Nation works that way by design. It references a 2019 statement by CEO Michael Rapino that “we have to put the show where we make the most economics,” and that venues that use other ticketing companies could be at a disadvantage. (Under the terms of an antitrust consent decree, Live Nation has a court-appointed monitor tasked with preventing this.) The question is whether Live Nation operates this way, and whether what might be thought of as its platform is intended to do so.
Hence the comparison to Microsoft, which the Department of Justice sued in 1998 for trying to use its dominance in operating systems, and its resulting leverage over PC makers, to control the market for web browsers. (Microsoft lost in district court; that decision was partly overturned by the court of appeals; and the case was eventually settled.) In that case, though, the compatibility issues were intuitive and the harm to consumers was obvious.
For years, antitrust law focused on protecting consumers from higher prices, and it’s not entirely clear that tickets would get cheaper — or that there would be more or better concerts — if Live Nation were constrained or broken up. Some judges and scholars now take a broader view, though, and it’s easier to imagine that more competition would lead to more innovation.
Apart from the legal issues, the lawsuit portrays Live Nation as a minefield of conflict of interest, where the best side of a deal to be on is both of them. Thinking about the company means appreciating the significant synergies among its different businesses while somehow also believing that those different businesses can negotiate fairly with one another. Think of Live Nation’s talent management operation, where agents that represent artists sometimes negotiate deals for concerts against another division of the company. The artists must be satisfied with the service they’re getting, but you also have to wonder if the House always wins.
This is just the opening salvo in what’s likely to be a long conflict — antitrust cases tend to be long and complicated, and this one could have eras, like Swift. By the end of it, though, whichever side wins, Live Nation will either be constrained from having its various divisions work together in a way that disadvantages competitors or it will have to take more care that they don’t — and this can only be a good thing for the rest of the business.
As we come to the end of Mental Health Awareness Month, the music community would be remiss to not critically examine the mental health of the most vulnerable among us — specifically, the child and youth labor that represents a significant portion of our market share, revenues, and slots on the new artist charts. The state of our entertainment union, one that venerates youth above seemingly all else, ironically puts a low value on artist’s holistic wellbeing, putting them in myriad situations that are age-inappropriate, and that are dangerous mentally, emotionally and physically.
The discussion of youth safety in the workplace is hardly new and as the recent documentary about abuses at Nickelodeon, Quiet on the Set: The Dark Side of Kids TV, showed, we’ve seen embarrassing and tragic cases of industry putting commerce before conscience. Having only minimal guard rails in place, such practices in the entertainment industry have resulted in mental health damages that oddly run counter to the fiscal goals of the industry itself, but more importantly, cause mental scars on young artists that are carried long into adult life.
Trending on Billboard
A study published by JAMA Psychiatry last month echoed what so many other studies have shown: over 40% of adult mental illness — anxiety, depression, substance use and suicidal ideation — is directly linked to traumatic events sustained in childhood and adolescence. The study strongly advocates for policy-driven prevention measures to reduce the rates of youth mistreatment, thereby reducing the rates of serious mental illness in adulthood.
The entertainment industry, and specifically the music industry, needs to enact deep systemic, policy-driven changes, ones that introduce the presence of mental health therapists in virtually all situations and venues encountered by new artists. Shadows, if you will, that protect the artist, thereby indirectly protecting the asset the label has so dearly invested in: the artist themselves.
What would this look like? Just as we require on-set academic tutoring and child labor OSHA protections, the music industry should lead the way and have 24/7 mental health support people shadowing each and every new label signing, helping the artists navigate their new reality of constant adoration, free-flowing money, highly-sexualized environments, the prevalence of drugs and alcohol, and long, unsupervised hours in studios and on the road where rampant sexual/gender-based harassment and assault can and does occur. Labels and publishers would present standardized curricula related to mental health on-boarding upon signing, mental health de-boarding upon termination (ie, when an artist is dropped), gender-based assault/harassment safety best practices, recording studio safety, balanced and healthy touring, and general psychotherapy, among other things.
Some forward-thinking industry players are already part of that change. Nettwerk Music Group builds “wellness budgets” into their artist deals. Limited Edition Music Publishing, a new independent publisher, is doing the same. There are also non-profits including MusiCares, Sweet Relief and Backline that offer valuable assistance. But the list of agencies, labels, and publishers giving only lip service during Mental Health Awareness Month is pathetically long.
For more than 15 years, I was a senior level A&R guy. Over those years, I signed a number of young songwriters and bands (Disturbed, Michelle Branch, Hoobastank, BRMC, Remy Zero, among others). The industry thrives on the young. Michelle Branch was 14 when I signed her. The stories many young women tell of being harassed, including Phoebe Bridgers and Billie Eilish, very likely could have been minimized or outright avoided with the presence of therapist shadows (and zero tolerance for the men doing the harassing). But as it stands now, mental health initiatives in the music industry are mostly just performative talking points.
Artists are our livelihood. Artists are our passion. We as an industry need to do better, proactively protectingthem at all costs from predatory, dehumanizing behavior that relegates them the status of a disposable widget (and not someone’s daughter or son). To be sure: artists will be dropped, singles won’t be worked, and albums will be shelved — that’s business — but how the artist is treated when these events occur can make all the difference in their lives going forward.
And what’s the payoff? How about fewer artists with devastating identity issues, severe depression, debilitating anxiety, substance use disorders, suicidal ideation and more? How about artists that don’t flame and burn out? How about artists whose creativity is boundless and ever evolving? And how about cultivating a whole generation of young artists who are emotionally, mentally, spiritually and physically at the top of their game — thriving and creating — and not traumatized by the very industry meant to nurture them. Now there’s a legacy we could all be proud of.
David Andreone is the founder of ArtistServices Therapy, a psychotherapy and coaching practice tailored to artists, creatives and creative executives. Andreone has held senior level A&R positions at Warner/Chappell Music Publishing, and Columbia Records, and continues to manage artists and produce TV content.
Los Angeles-based electronic producer Jauz partnered with global distribution company OneRPM to relaunch his six-year-old label, Bite This. Together, the two teams are planning label takeovers, pop-up events and compilations as they bring genre-spanning sounds by rising artists to the release calendar. The partnership with OneRPM — whose client list also includes artists like Chance Peña, Yelawolf, A$AP Twelvyy and Alejo — will provide projects from emerging Bite This acts like Albert Breaker and Edison Cole with label services that would normally be rare to have at an artist-run imprint. – Katie Bain
U.K.-based ATC Management, whose clients include Bring Me the Horizon and Bullet for My Valentine, signed a new cooperation agreement with Chinese independent music company Modern Sky. Through the deal, the two companies will leverage their resources across management, live representation, merchandising, marketing and digital to drive artists’ careers in their respective markets.
Trending on Billboard
AWAL partnered with L.A.-based networking and mentoring program Creative Futures Collective to launch the AWAL Futures program, which will focus on launching the careers of artists and supporting creatives from underrepresented communities. The artists selected into the program will receive an EP release from AWAL (including an EP release event at Soho Warehouse in July) as well as mentorship from AWAL executives. Creatives from the Creative Futures Collective community will assist with marketing assets including music videos, photos and other artwork. Selected artists for the inaugural program are Brooklyn-based project BITTERS featuring British frontwoman Claudia Mills; Columbus, Ohio-based Ghanian-American singer-songwriter NanaBCool; and Chicago rapper/producer Jay Wood.
Two French collecting societies, the SCPP (for sound recording producers) and ADAMI (for music and audiovisual artists), signed a partnership agreement to pool their respective databases and distribution tools for private copying remuneration and equitable remuneration. A study is currently underway to draw up the operational implementation of the pact, which includes a clause under which the two companies may decide to merge within a joint subsidiary being created under the deal. The creation of the subsidiary will be submitted for approval at each company’s upcoming general shareholders meetings. “Both companies jointly acknowledged that the situation in France creates inefficiencies that are detrimental to all rights holders and weakens their ability to negotiate their rights,” according to a press release. “This is because there are 7 related rights collective management organizations in France, whereas in most European countries there is only one.”
U.K. physical distributor Proper Distribution signed a deal with U.S.-based Firebird Music Holdings to service Firebird’s partner labels, artist management agencies and other creative businesses. Proper will spearhead physical sales and distribution for Firebird’s frontline and catalog releases across the United Kingdom, Republic of Ireland and Europe (via Proper’s partner Bertus) for select signed and self-releasing artists on Firebird’s partner rosters. Firebird partners will be granted access to Proper’s facilities and resources, specialist knowledge of local record retailers and marketing and sales teams in agreed-upon territories. Self-releasing artists under Firebird will enjoy a streamlined process to release music on physical formats. The deal will encompass releases by Slash, Chase Rice, The WAEVE, Moonchild Sanelly, Whiskey Myers, Danielle Bradbery and Rainbow Kitten Surprise, among others.
Keywords Studios, an international provider of technology-enabled solutions to the gaming and entertainment industries, partnered with Reactional Music, a music personalization engine that allows music and audio to be generated live in video games. Under the deal, Keywords will offer help facilitate the integration of Reactional into game development projects on behalf of its clients. “Collaborating with [Keywords’] teams and studios provides an incredible opportunity to scale Reactional,” said Reactional Music president David Knox in a statement. “We believe that Keywords’ implementation teams can also enable Reactional to extend its generative music and creator tools in innovative ways beyond the core gaming space.”
Producer Eli Brown (Drake, Giveon, PARTYNEXTDOOR, Chris Brown) signed an exclusive deal with Warner Music Canada through which he will develop and sign Canadian artists to the label via his imprint, Loophole Records.
Code.org, a nonprofit dedicated to expanding access to computer science in schools, particularly for students from underrepresented groups, partnered with Amazon to launch Music Lab, a platform through which K-12 students can learn to code through interactive music composition featuring hit songs by artists including Tinashe, The Chainsmokers, Rosa Linn and Aloe Blacc. Through an educational partnership with Amazon, each artist contributed tracks and samples for use in the platform. Over the past six months, Code.org has tested Music Lab with thousands of students and teachers.
The European Music Managers Alliance (EMMA) announced a new partnership with AI-driven msuic funding platform beatBread, which uses billions of data points to forecast an artist’s earnings potential in order to offer advances on existing catalog as well as new and unreleased music. Artists then repay their advances as a percentage of their revenue over a period of time that artists can set. The partnership will kick off with an exclusive online workshop for EMMA members on July 2 that will focus on funding and business building.
.MUSIC, a top-level domain name designed for the global music community, partnered with global identity verification provider Shutfi Pro. Through the deal, Shufti Pro will authenticate the digital identity of the music community to create a “trusted ecosystem of verified artists, creators, industry professionals, organizations, businesses, and brands” under the .MUSIC domain.
Mastercard Midnight Theatre, a 150-seat venue in Manhattan, selected Oak View Group (OVG) to manage its operations. OVG plans to debut a new restaurant concept at the venue, an investment of Dolphin Entertainment, this spring.
U.K. taxi app FREENOW announced a third year of financial support for Music Venue Trust (MVT). Under the arrangement, FREENOW customers can opt in via the company’s app to round up the cost of their fares and donate to MVT, which supports grassroots music venues across the United Kingdom. Donations will be collected for every trip completed and sent to MVT, which will use the funds to operate its emergency response service — one MVT claims has saved “hundreds” of venues from closure since being established in 2017.
A Seoul court has barred K-pop giant HYBE from dismissing Min Hee-jin as CEO of its ADOR subsidiary label following HYBE’s internal audit and subsequent police report against the executive last month. The decision will keep Min in her role as CEO, by extension allowing her to stay in control of the label’s sole artist, girl group NewJeans.
As Bloomberg cites from local Korean coverage, “The Seoul Central District Court said HYBE’s evidence and rationale were not sufficient to back the company’s case for Min’s dismissal.” Despite HYBE’s 80% stake in ADOR (where Min has an 18% stake, with the last 2% retained by other executives), the company cannot vote to dismiss Min, which it was expected to do at a company shareholder meeting scheduled for Friday (May 31).
Trending on Billboard
“We urge HYBE to respect the court’s decision,” Min’s attorney said in a statement, per Bloomberg. “If Hybe takes any action to remove Min from her position as CEO, it will be in direct violation of the shareholders’ agreement.” The legal reps shared their hope that Min’s leadership team at ADOR would also stay intact.
In its own statement, HYBE acknowledged the court’s decision and said it would not utilize its voting rights but vowed to “follow up within the framework of the law.” The company noted that the court admitted Min had sought ways to weaken HYBE’s control over ADOR — efforts that could have led to Min independently running ADOR, taking NewJeans out of the HYBE system or pressuring HYBE to sell its shares in the subsidiary label. The company say sit still plans to pursue its breach of trust case after finding “substantial evidence to prove that Min deliberately led the plan to take over management control of the subsidiary.”
In the meantime, the 2023 Billboard Women in Music honoree will be able to continue directing NewJeans following ADOR’s release of two new singles from the group: “How Sweet” and “Bubble Gum.” The group’s debut Japanese single, “Supernatural” — which reportedly reinterprets a ’00s Pharrell single — is set to drop in June.
Despite the court ruling, the ongoing K-pop power struggle is hardly resolved, and in fact has only widened since HYBE’s initial audit in April.
Following HYBE’s request for her to exit her role as ADOR CEO, Min held an emotional two-hour press conference in which she detailed her concerns and struggles with other teams in the HYBE LABELS system. AsThe New York Times‘ Seoul reporter Jin Yu Young noted in her report, Min’s “pushback against HYBE and its founder, Bang Si-Hyuk, has resonated widely in South Korea, where corporate life can be punishingly hierarchal.”
Last week, HYBE label BELIFT LAB announced it had submitted a letter of complaint for obstruction of business and defamation against Min stemming from Min’s claims that BELIFT girl group ILLIT had copied NewJeans music, style and creative concept. The conflict has also involved the parents of NewJeans members, who have voiced worries about Minji, Hanni, Danielle, Haerin and Hyein’s reputation and treatment in a letter.
The court order follows last Friday’s release of new material from NewJeans and fellow HYBE artist RM, both of whom will likely make substantial bows on the Billboard charts next week.
Big Loud Records has promoted Patch Culbertson to executive vp/GM. With the appointment, Culbertson becomes the company’s first executive vp, reporting to Big Loud partners Seth England, Joey Moi and Craig Wiseman.
Culbertson joined Big Loud Records as vp of A&R in 2017 and rose to senior vp/GM of the label in 2021. In his new role, Culbertson will continue to oversee day-to-day operations, strategize on commercial tactics and help to expand the creative development of the Big Loud Records roster. Big Loud artists incude Ashley Cooke, Charles Wesley Godwin, Dallas Smith, Dylan Gossett, ERNEST, Griffen Palmer, Hailey Whitters, HARDY, HIXTAPE, Jake Worthington, Larry Fleet, Lauren Alaina, Lauren Watkins, Lily Rose, MacKenzie Porter, Maggie Rose, Morgan Wallen, Shawn Austin, Stephen Wilson Jr. and Zandi Holup.
Prior to joining Big Loud, Culbertson served for eight years at Republic Records, rising to director of A&R at the company’s New York headquarters. His work at Republic included signing and/or developing artists including Aminé, Florida Georgia Line (via Republic Nashville), SoMo and The Naked and Famous. He also led releases from Colbie Caillat, Florence + The Machine, Mat Kearney and more.
Trending on Billboard
“Patch has been a critical part of Big Loud’s success for over seven years now,” England said in a statement. “He’s a brilliant strategist with an unmatched ability to process information and make sound decisions. Patch is a true leader that’s continued to invest in this company with his time and expertise, and his impact can’t be underestimated. This promotion is well-earned.”
“I am immensely proud of the accomplishments of our roster and staff these past seven years,” Culbertson added. “It is a privilege to serve these artists and work alongside a best-in-class team that is writing its own chapter in music history. A special thank you to Seth, Joey, Craig, and (Big Loud COO) Austen (Adams) for their support and leadership. They continue to show the world how to win with integrity, and I’m honored to be part of it.”
“What sets Patch apart as a GM is that he — like all of us at Big Loud — continues to keep songs first,” Moi added. “He applies his analytics brain and his firsthand understanding of artists and how they work best to every circumstance, while balancing the growth of our company. We’re grateful for his continued leadership.”
Billy McFarland‘s long, strange redemption arch is taking another weird turn tonight in Austin, Tex., where the convicted Fyre Fest fraudster will fight in a karate tournament organized to entertain podcaster Joe Rogan and several hundred crypto executives attending a blockchain and Web3 conference.
McFarland will face Justin Custardo, best known for being the founder of the Web3 Breakfast Club channel on YouTube, which has about 1,000 subscribers. Organizers of the conference, dubbed Consensus 2024, insist the fight is an officially sanctioned bout by Karate Combat, a martial arts league built around crypto tokens that fans can trade while watching fights between former Olympians in their late 30s and early 40s. McFarland and Custardo will fight in the heavyweight division of Karate Combat’s Influencer Fight Club series, with Karate Combat oddsmakers giving Custardo a 52%-48% advantage over McFarland.
Since being released from prison in May 2022 after serving most of his six-year sentence on fraud charges related to the disastrous 2017 Fyre Festival in the Bahamas, McFarland has managed to stay in the limelight through a variety of media stunts and promises to repay the $26 million he admitted to stealing from investors. That includes a long-running promise to successfully stage Fyre Fest. The date for that event has been pushed back several times — it’s now supposedly scheduled for sometime in 2025 — with a location, lineup and plan of any kind all TBD at the moment.
Trending on Billboard
Tonight’s fight will be streamed across Karate Combat’s social media pages starting at 6 p.m. CT and will be attended by Rogan, who told viewers of his podcast earlier this week that he would be in attendance to watch the main event between American fighters Ross Levine and Adrian Hadribeaj.
McFarland has posted several videos on Instagram that show him training for the match, including one video where he punches through a pizza box housing a large pepperoni pizza and another in which he kicks a watermelon.
McFarland’s opponent Custardo appears to be taking a more holistic approach to training for the fight, focused on weight loss, technical skills work and mental acuity training through philosophical puzzles posed by his followers.
The men have been trading shots over social media in the lead-up to the fight. Yesterday, McFarland and Custardo came face to face at the official weigh-in in Austin, where the two men, clad in blue jeans and white button-up shirts, traded barbs and sized each other up, appearing to almost come to blows at one point.
“I’ve been training Muay Thai and I’m going to kick (Custardo) very hard,” McFarland warned when asked about his training regimen by the event’s emcee. At a press conference after the weigh-in, Custardo fired back, warning that “every punch [McFarland] takes is in honor of every person he scammed.”
McFarland told the audience he would donate all winnings to victims of his fraud.
Besides his restitution fund, McFarland faces a civil lawsuit claiming he ripped off an investor who gave him $740,000 after getting out of prison. An attorney for 54-year-old Jonathan Taylor of New York — who met McFarland while both were serving prison sentences at Elkton Federal Correctional Institute in Ohio, — claims McFarland needs to appear in court and agree to repay him or face legal action for civil fraud, conversion, civil conspiracy, breach of contract and unjust enrichment.
An attorney for McFarland said Taylor is trying to profit off his connection to McFarland, stating, “we tried multiple times to repay Jon his money, but his lawyers went silent despite our repeated attempts to contact them. We remain open to a settlement.”
Subscription gains and a string of acquisitions helped Reservoir Media’s fiscal year revenue grow 18% to $144.9 million, beating the company’s guidance from February of $140 million to $142 million, the company announced Thursday (May 30). Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in the period ended March 31 climbed 20% to $55.6 million, topping guidance of $53 million to $55 million.
Organic growth, which strips out the impact of acquisitions made during the year, was 14% for the full year. Among the company’s catalog purchases during the fiscal year were four members of R&B group The Spinners, Latin music artist Rudy Perez, hip-hop producer Mannie Fresh and 2Pac collaborator Big D Evans. Reservoir also invested in Egyptian company RE Media and Saudi Arabian hip-hop label Mashrex.
Among Reservoir Media’s signings during the year were songwriter Steph Carter, who shares a co-writing credit on Sabrina Carpenter’s “Espresso,” and Rob Ragosta, co-writer of “Need a Favor” by Jelly Roll. The company also landed publishing deals with rock band Kings of Leon and rock legend Joe Walsh.
Trending on Billboard
The company said it expects fiscal 2025 revenue to be between $148 million and $152 million, which would reflect 3.5% growth at the midpoint. Adjusted EBITDA is expected to be $58 million to $61 million, which implies 7.0% growth at the midpoint.
“Our financial guidance reflects our confidence in growth driving organic growth with our value enhancement efforts and capitalizing on the projected growth of the music industry,” CEO Golnar Khosrowshahi said during Thursday’s earnings call. Some of that organic growth will come from additional price increases at music subscription services, she added: “Looking forward, we are poised to benefit from what we believe will become a regular cadence of price increases across streaming platforms.”
Shares of Reservoir Media jumped 15.5% to $9.00 Thursday morning before falling to $8.26, up 6.1%, by late afternoon.
Elsewhere, full-year publishing revenue at the company rose 15% to $96.2 million. Digital revenue grew 17% to $51.6 million and performance royalties jumped 36% to $22.8 million. CFO Jim Heindlmeyer said the “improvement is largely derived from higher royalty rates and price increases at multiple music streaming services, as well as the expansion of our catalog through M&A.”
Recorded music revenue grew 22% to $42.4 million in the full fiscal year largely due to price increases at subscription services and the timing of Reservoir Media’s release schedule, Heindlmeyer said. While physical revenue climbed 49% to $8.9 million, digital revenue rose 17% to $26.9 million and accounted for the majority of recorded music’s $7.6 million in revenue growth.
Fiscal fourth-quarter revenue grew 12% to $39.1 million. Operating income grew just 2%, however, to $8.8 million, while adjusted EBITDA improved 6% to $16.0 million.
Reservoir’s pipeline of potential acquisitions dropped by 50% to $1 billion, down from $2 billion at the end of December. Khosrowshahi downplayed the change, however, noting the company is seeing “ample deal flow” despite “a couple of larger deals” having moved. Liquidity at the end of the year of $132.3 million from $18.1 million of cash and $114.2 million available in a revolving credit facility “gives us the capital to fund our strategic objectives,” said Heindlmeyer. Added Khosrowshahi, “I’m generally quite optimistic about what that pipeline looks like.”
Megan Thee Stallion is firing back at a lawsuit that claims the superstar forced a cameraman to watch her have sex with a woman inside a moving vehicle, calling them “false and fabricated” allegations filed by a “con artist.”
In a scathing first response to the April accusations, attorneys for Megan (Megan Pete) said that Emilio Garcia’s lawsuit “consists almost entirely of falsehoods, misrepresentations of fact, and outlandish claims that have no basis in fact or law and no merit.”
“Plaintiff is a con artist who is manipulating the judicial system to act as his publicist and bullhorn in a desperate attempt to boost his failed singing career while trying to tear down the successful career of Megan Thee Stallion,” wrote the star’s attorney, Alex Spiro.
Trending on Billboard
In his lawsuit last month, photographer Emilio Garcia accused the superstar and Roc Nation of subjecting him to a hostile work environment due to the alleged car-sex incident, which he says took place while on tour in Spain in 2022. Garcia claims the incident left him “embarrassed, mortified and offended,” and that Megan and Roc Nation later retaliated against him by reducing his work and eventually terminating him.
But in Thursday’s response, Spiro painted a very different picture — of a former contractor who was terminated after he repeatedly “falsified his invoices and overcharged Ms. Pete for services he never completed.”
“Angry at the loss of this high-profile gig and his exile from the inner circles of stardom, plaintiff filed a factually and legally frivolous Complaint,” Megan’s attorneys wrote. “Plaintiff took a run of the mill wage and labor dispute and trumped up his frivolous claims with sensationalist false allegations of sex, debauchery, and workplace harassment for the sole purpose of creating a media firestorm to tarnish the career and reputation of Ms. Pete.”
Beyond rebutting the lawsuit’s allegations, Megan’s attorneys also argued Thursday that the case was filed in entirely the wrong place. In a motion seeking to have the case moved to federal court, they argue the case has “absolutely no connection to California state court” — citing the fact that Garcia lives in Texas and Megan lives in Florida.
“Plaintiff was more concerned with staging his lawsuit in an improper forum than accurately pleading the facts underlying his claims,” Megan’s lawyers wrote.
Attorneys for both sides did not immediately return requests for comment on Thursday.
Madonna is facing another class action lawsuit over delayed concerts on her Celebration Tour, this time from a ticket buyer who also claims she forced fans to watch “pornography” during the show.
Like several previous cases, the new lawsuit claims that the Queen of Pop violated false advertising laws by taking the stage more than an hour later than expected, leaving fans to wait in an “uncomfortably hot” arena and get home later than expected.
But the new case, filed in Los Angeles on Wednesday (May 29) by a fan named Justen Lipeles, also includes a bold new accusation: that Madonna should have warned fans that the show would include “topless women” who were “engaging in simulated sexual acts.”
Trending on Billboard
“Forcing consumers to wait hours in hot, uncomfortable arenas and subjecting them to pornography without warning is demonstrative of Madonna’s flippant disrespect for her fans,” lawyers for the aggrieved fan wrote. “Plaintiff felt like he was watching a pornographic film being made.”
Madonna and promotor Live Nation are already facing similar cases in New York and Washington, D.C., over claims that late starts to her Celebration concerts broke the law. Both were filed as class actions, seeking to represent potentially thousands of other fans who also faced the alleged delays.
The New York case, focused on December shows at the Barclay Center, made headlines because it claimed the fans “had to get up early to go to work” the next day — a claim Madonna’s lawyers have since argued is not the kind of “cognizable injury” that can form the basis for a lawsuit. The D.C. case, targeting tour dates at the District’s Capital One Arena, added claims that the arena was “uncomfortably hot” and that she had lip-synched portions of the show.
In his new lawsuit, Lipeles echoed all of those claims about Madonna’s March 7 performance at the Kia Forum. He claims he paid more than $500 per ticket for a show that was supposed to start at 8:30 p.m. but that Madonna didn’t take the stage until after 10 p.m., leaving fans to wait in an arena that was overheated due to “Madonna’s requirement that venues not turn on air conditioning.”
“Plaintiff and members of the class were profusely sweating and became physically ill as a result of the heat,” his lawyers write. “When fans complained about the heat, Madonna unreasonably told them to take their clothes off.”
When the show finally did start, Lipeles claims, “it was apparent to plaintiff that Madonna was lip synching” during “most of the performance.” And he says he was given no warning that “there would be nudity and pornography on stage during Madonna’s concerts.”
In technical terms, the lawsuit accuses Madonna of breaching her contract with ticket buyers, negligent misrepresentation, false advertising and several other forms of legal wrongdoing under California law.
You’ve most likely heard by now the news that Spotify, through a surprising bundling maneuver, has unilaterally decided to give songwriters a substantial pay cut. As part of our ongoing efforts to provide the songwriting community with data and details related to this incredibly important income stream — which at this point must feel like a continual moving target — we have reviewed and analyzed Spotify’s reporting for the first month where they instituted this change (March), and compared it with the month prior (February).
What Is Happening?: Spotify has decided to bundle audiobooks in its premium tier offerings (affecting 85% of total Spotify subscribers). By doing so, they are now claiming that nearly half of total subscriber revenue is attributed to audiobooks, reducing reported service revenue to music to 52%. This results in a substantial decrease in payments to songwriters, which we explain below.
Trending on Billboard
In March, total mechanical revenue paid by Spotify was reduced by 33.9% (from $36.7 million in February to $24.3 million). This is where the reported yearly $150 million reduction comes from — an estimate built on Spotify’s prior-year performance and payment reports to the Mechanical Licensing Collective. The twist here is that Spotify reported that performance royalties increased 18.75% from February to March (from $31.2 million to $37 million).
Spotify’s performance royalties always fluctuate from month to month (by as much as +/- 10%) but the magnitude of this change is unusual (and unexplained). Was March’s unexpected growth in Spotify’s performance royalties an anomaly, or a precursor to a new level of payments for that royalty? Due to the structure of the mechanical royalty payment formula, an increase in performance payments results in a decrease in mechanical payments.
For many songwriters who have agreements with music publishers, performance royalties are beneficial because half are paid directly to the songwriter and not through their publishing agreement, whereas mechanical royalties run through the publisher.
So, while mechanical payments in March were reduced by 33.9%, the total reduction in payments to songwriters was 9.75% ($67.9 million to $61.3 million), which on an annual basis comes out to $80 million.
Historical Performance vs. Mechanical Payments for CRB III: This harkens back to prior reporting (and confusion) a couple of months ago when the streaming services reported an increase in performance revenue over the prior five-year period (2018-2022). While we cannot explain exactly why performance revenue changed in this historic accounting period, we can presume that it had something to do with deals that were being negotiated during that time and were finalized and took retroactive effect by the time the final remanded reporting was provided and required by the final determination of the appeal.
If Spotify Cut Revenue in Half, Why Aren’t We Seeing a 50% Reduction? The payment structure has various protections so that Spotify and other similar digital service providers cannot unilaterally adjust their prices to the detriment of songwriters, as Spotify has done here. One of those protections is an obligation to pay songwriters a portion of what they pay record labels, to the extent that that amount is greater than the service revenue percentage. This is called the “TCC Prong,” or “Total Content Cost Prong.” Because Spotify’s deals with the record labels apparently do not give them the flexibility to choose what they can bundle into offerings and make price reductions, what they pay the labels has not changed. In fact, in March, that percentage increased by 5.86%, or $13.1 million.
So is the Total Yearly Reduction 150M or 80M? This will most likely land somewhere in the middle, as it depends on what Spotify reports paying on performance (i.e., if March’s performance royalty growth was an anomaly) and what it pays to the labels. Over the course of the next several months, if Spotify does not change its position, we will be monitoring and reporting trends in percentage and actual results as part of our ongoing effort to provide the songwriting community with actual and up-to-date information related to their royalties. You can also check the current going rate of publishing revenue yourself at any time with our royalty calculator, updated monthly.
Spotify spent five years litigating against publishers and songwriters to establish rates for 2018-2022. The result was a positive increase but a major delay in payment. In total, the mechanical increase from all digital service providers came out to about $250 million over that period. Of that, Spotify contributed $98.6 million more, and that’s just from its restated 2021-2022 period. Songwriters did not receive the eventual rate increase until earlier this year.
When Spotify, the NMPA and NSAI reached an agreement for 2023-2027, we thought the fight was over. We were wrong.
At the end of March, Spotify reported yearly revenue of $15 billion. This audiobook bundling maneuver, which affects 100% of all musical content on its service, reflects less than a 1% cost savings for the tech behemoth. And for a limited time, at that, since the settlement referenced above ends in 2027. This begs the question to Spotify analysts and shareholders alike as to whether it is worth it — and leads to the obvious answer: “It is not.” Spotify should reverse course immediately and find 1% savings somewhere else that doesn’t work to decimate the revenue of millions of American songwriters, the lifeblood of our treasured American music industry.
Jordan Bromley leads Manatt Entertainment, a legal and consulting firm providing services to the entertainment industry for over 45 years. He sits on the Board of Directors for the Music Artists Coalition, an artist first advocacy coalition established in 2019.
Trent Smith is a financial analyst at Manatt Entertainment with extensive experience in the streaming economy.