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This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between. This week: Shaboozey gets into a thorny legal battle with his former label; Beyoncé and the Foo Fighters move to stop Donald Trump from using their songs; another lawsuit erupts over the control of the Ramones; and much more.
THE BIG STORY: Shaboozey’s Looming “Bar” Fight
Amid the massive success of Shaboozey’s “A Bar Song (Tipsy),” an acrimonious legal battle is brewing in Los Angeles Superior Court. On Wednesday (Aug. 21), the breakout country star (born Collins Obinna Chibueze) filed a lawsuit against music publisher Warner Chappell and his former record label, Kreshendo Entertainment, accusing them of breach of contract. Two days later, Kreshendo sued him right back, accusing him of “a strategy of fraud and misrepresentation.” The dispute? The extent to which Shaboozey is still bound by a deal he signed with Kreshendo back in 2016, when he was a relatively unknown artist. Both sides agree that the deal was terminated in 2019, but they are at odds over Shaboozey’s continuing obligations to his old label. And Warner has gotten roped in because it administers his publishing rights, which play a key role in the dispute. The litigation is getting underway just as “A Bar Song” has emerged as one of the biggest hits of 2024. A genre-blending hit that interpolates J-KWON‘s 2004 rap hit “Tipsy” into a bouncy pop country track, the track has spent seven weeks at No. 1 on the Billboard Hot 100, marking the longest chart-topping stint of the year. In its lawsuit, Kreshendo says it was that sudden success that sparked the legal battle: “Shaboozey had no issue with any of these terms for years. It was only after he recently released the ‘Bar Song,’ which has become a huge hit, that he has taken sudden issue with the terms he expressly agreed to.” We’ll keep you posted as the dispute moves ahead in court…
Other top stories this week…
FAMILY FUED – A California appeals court issued a final ruling allowing the Michael Jackson estate to proceed with a $600 million sale of the singer’s catalog to Sony Music, rejecting objections from his mother Katherine Jackson that aimed to block the deal. She’d argued that the deal “violated Michael’s wishes,” but the court ruled that the superstar’s will gives his executors (John Branca and John McClain) “broad powers” to ink such transactions. HOLD UP – Beyoncé‘s record label and music publisher sent a cease-and-desist to Donald Trump‘s presidential campaign over its use of the megastar’s song “Freedom” in a social media video, prompting the campaign to quickly pull down the offending post. The Bey track serves as the official theme song for the campaign of Democratic presidential nominee Kamala Harris — likely the reason why the Trump campaign used it. ANTI-HERO? – Elsewhere in Trump world, the Foo Fighters publicly claimed that they had not authorized the former president to play their 1997 anthem “My Hero” at a rally with Robert F. Kennedy Jr. and would seek to prevent him from doing so in the future. The campaign later claimed that it had, in fact, obtained proper licenses to perform the song. Either way, the band said that any royalties received as a result of this usage would be donated to the Harris/Walz campaign. DAME’S UNPAID TAXES – Just a week before a court-ordered auction of Damon Dash’s one-third stake in Jay-Z’s Roc-A-Fella Records, there was a stunning new wrinkle: He owes more than $8.7 million in unpaid taxes — and New York state says the proceeds from the Roc-A-Fella sale must be used to pay them. The new claim complicated an already complex situation, in which Dash’s stake in the storied record label is being sold off by U.S. Marshals to pay off an $823,000 civil judgment. HEY, HO, LET’S SUE – Opening up a new front in the never-ending legal war over the Ramones, Joey Ramone’s brother (Mitchel Hyman, better known as Mickey Leigh) sued Johnny’s widow (Linda Cummings-Ramone), accusing her of infringing the band’s trademarks by carrying out an “unrelenting quest” to associate herself with the Ramones. DIDDY CASE UPDATE – Sean “Diddy” Combs asked a federal judge to dismiss a case filed in February by Rodney “Lil Rod” Jones, arguing that the “salacious” lawsuit was filled with “blatant falsehoods” designed to pressure him into paying a lucrative settlement: “Running to nearly 100 pages, it includes countless tall tales, shameless celebrity namedrops, and irrelevant images.” SNEAKER SETTLEMENT – The sneaker company Vans and a Brooklyn art collective called MSCHF reached a settlement to end a long-running trademark lawsuit over Tyga‘s “Wavy Baby” sneakers — a parody of the company’s classic Old Skool brand of shoes. The artists said Tyga’s pricy sneakers were akin to an art project, and thus protected by the First Amendment. But Vans called it “blatant” infringement of the company’s IP, and federal courts repeatedly agreed with that assessment. OUTKAST TRADEMARK CASE – The legendary rappers sued an EDM duo called ATLiens, the same name as one of OutKast’s best-known songs. Big Boi and André 3000 claimed that the name (a combo of “aliens” and their hometown of Atlanta) is a novel linguistic term that had been “invented by OutKast” — and that the rival group is confusing music fans by using it. SHKRELI SEIZURE – A federal judge ordered convicted pharma executive Martin Shkreli to hand over his copies of Wu-Tang Clan’s Once Upon a Time in Shaolin, rejecting his claims that he had a right to retain duplicates of the one-of-a-kind album even after he forfeited it to federal prosecutors.
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Surely many Deadheads took in multiple performances of Dead & Company’s 30-date residency at Las Vegas’ Sphere this past spring and summer. It’s unlikely, however, that many of them saw more than Bernie Cahill.
Cahill — who, as a partner at Activist Artists Management, co-manages Dead & Company with Irving Azoff and Steve Moir — caught 20 Dead Forever shows at the fantastical, $2.3 billion venue, with his box suite perch offering impeccable views of the band as it seemed to lift off from the Grateful Dead’s former house in San Francisco’s Haight Ashbury district and hurtle into deep space.
“This definitely was a work in progress,” Cahill tells Billboard. “We were adding new content as late as the final weekend. We feel like we had made a commitment to the fans that we would continue to evolve the show and deliver, and we did.“
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The run made Dead & Company the third group to play Sphere after U2 opened the venue last September and Phish put on a three-night run of shows this past April. Dead Forever grossed $121.5 million and sold 429,000 tickets over 27 shows from May 16-Aug. 3, according to numbers reported to Billboard Boxscore.
Here, Cahill talks about helping break in the cutting-edge venue, bringing Deadheads to Vegas and why, if asked, they’d likely do it all over again.
Was there a sense of learning as the residency went on, and if so, what were those lessons?
Getting in that room and dealing with the audio and some of the basics of not having amplified sound on stage, you learn a lot. Obviously, Irving had just gone through it with U2, so we definitely had a leg up and were lucky that U2 shared so much institutional knowledge with us.
But still, until you get in that room, you just don’t know what you’re in for, so it was a constant evolution. Every single night we were learning things about the room, the audio, the content. Sometimes we would see new content that we would have, and it would just pop and be remarkable, and other times it didn’t always work exactly as it was envisioned. That’s just part of the process of this new medium and new canvas.
I imagine by the end, you have this performance that feels really fully formed, because you’ve developed it over the course of all these shows.
I feel like the guys were inspired as well. They found a new gear at the Sphere. Maybe part of it is the residency, part of it is the challenge of doing something new. I think that was huge for them. You’ve been doing this for particularly as long as Bob [Weir] and Mickey [Hart] have, and I think they were really fired up about the challenge of it. They leaned into all parts of it without ever losing sight of the songs. They were just knocking it out of the park. After the final tour, I didn’t think the band could get much tighter and better, and they pulled it off.
Do you feel they were leveling up because they had to compete with this fantastical thing they were in?
Yes, there’s some of that. But also, they were looking for ways to make this a complimentary integration of their visual storytelling and their music. With this immersive experience happening around you when you’re on that stage, I think they probably felt — and it shows — that they needed to deliver it at another level musically, and they did. I think the room invites that.
Were there unforeseen challenges that came up over the course of the residency?
Lots. [Laughs] I think some of the bigger ones were just things Derek Featherstone, our tour director and front-of-house engineer, had to manage, which was we had less rehearsal than we probably would have liked. When we’re loading in after they show the [Darren] Aronofsky movie [during the daytime], for instance, and we can’t do a full tech run-through of new content, that can be scary and flying without a net a bit. But I think what we see in our granular understanding of the show and then the fan experience, I don’t think they felt any of that stress or worry.
Were you finding that fans were going again and again, or was it more of a one-off experience for people?
Definitely repeat. There were so many repeats, and I think people were really gratified that they were doing more than just a show or more than just one weekend. We had people that saw shows every weekend. Most people saw at least two or three shows. That’s kind of the magic of this band and this community. They know that at a minimum, Bob and John [Mayer] are going tell a story over the weekend and they’re not going to repeat any songs. That story would unfold Thursday, Friday, Saturday, almost like a three-act play. That really appealed to our community.
Having done this, what advice would you give to a manager whose group is about to play the Sphere?
Well, for one thing, learn as much as you can from folks like U2 and Dead & Co. and Phish that have done it. We’re an open book, we’ll share whatever we can. We made mistakes, and we learned a lot, and we’re happy to share that with other artists that are coming after us.
Being a band that has always had visuals as a prominent part of the storytelling helped us a lot. It was very natural for us to explore that and go much deeper at the Sphere. I think bands that come after us who have those visual elements as a part their story and their brand will have an easier time creating their show. I would just advise to get started as soon as you can and don’t stop pushing the margin, either. Keep going with it and keep exploring and experimenting throughout your run.
The venue also really makes sense for a band with such a long a rich history, because the show so effectively leaned into that visually. Obviously, that’s not something a newer act can really do.
True. We have this very rich palette to draw from, and it really clicked in this venue. Yes, there were the crazy moments when it felt very 3D and hurtling through space. Then there were the analog moments and, I think, important emotional moments where the band was just connecting, whether it was Bob playing while standing on the moon and the ballads that just brought everybody to a whisper. I guess the other advice would be to strike that balance of those emotional, analog-feeling moments and then playing with the technology and how big you can go.
It was touching, thinking about the life of Bob Weir and where he and Mickey are coming from and now, they’re effectively playing in a spaceship.
Yeah, exactly. But by the way, it’s very Bob Weir if you know him. He loves technology. They’re all really technophiles. They love it. I think they love anything that allows them to go deeper with their storytelling and their exploration of this music. That is a gift to these artists, and I think is a big part of why the Sphere worked so well and was such a success.
Would they try it again?
When asked in interviews they’ve done since, I think they’ve all said they would definitely entertain an invite and would love to come back and do some things. Bob wants to really lean into this idea of being able to affect the visuals in real time and synching them more with the music itself.
But there were already some interesting things happening in that room that I don’t know if people even realized. [One night] there was a full moon outside, and we beamed the actual live full moon into the Sphere. That wasn’t video. That was a Weir idea.
If you were to do another residency, is there anything you would change?
Jim Dolan, you have to give him so much credit. He nailed it with this venue, which is impeccable in almost every way, from the backstage where we all spent most of our time, to front of house. Maybe [it would be] having a bit more time to rehearse, more tech rehearsal, just getting comfortable in the Sphere, because it’s one of one. It’s the only one in the world.
NFL star brothers Travis and Jason Kelce are taking their services to the Wondery podcast studio. According to The Hollywood Reporter, the Super Bowl-winning siblings have signed a significant new deal taking their two-year-old New Heights with Jason and Travis Kelce podcast to the Amazon-owned podcast studio, which signed a distribution and exclusive ad-sales representation deal for the family talk show.
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“We couldn’t be more excited to team up with Wondery for the next phase of New Heights,” the Kelce brothers told THR. “We love this show, and the fanbase that has grown with us over the last two seasons. Wondery understands the shared vision and will offer a wealth of experience and resources to take us to New Heights! We are going to create some groundbreaking moments together through this partnership. We are thrilled to start Season 3.”
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While the specific terms of the deal were not announced, THR noted that a person close to the matter described it as being in the “nine figure” range and “very competitive.” The multi-year deal will give Wondery exclusive global distribution rights to all audio and video episode of the pod, as well as its back catalog and the rights to make international audio adaptations of the show.
“We’ve been watching the growth of the podcast, really since it was launched, and I have been building a relationship with Travis and Jason and getting to know them for a while now,” Wondery CEO Jen Sargent told THR. “Sports is a really exciting category for podcast listeners. It’s a strategic priority of Wondery’s and Amazon’s. So there were a lot of reasons to think about joining forces here on the New Heights podcast.”
Sargent added that Wondery is looking into live domestic and international events and potentially creating localized content.
The brothers — older sib Jason retired from the NFL last year after 13 seasons as a center with the Philadelphia Eagles and tight end Travis is a three-time Super Bowl champion with the Kansas City Chiefs — launched the podcast in 2022 with Wave Sports + Entertainment. The new deal will make the show available on all podcast services, as well as YouTube, with Wondery also offering ad-free listening to its Wondery+ subscribers.
Talking about their lives on the gridiron and off the field, the show drew a dedicated sports audience that exploded into a much wider fanbase when Travis started dating Taylor Swift last year. Since then, the Ambies-, Webbys- and Shorty-award-winning football talk on the show that usually ranks as one of the top sports podcasts on Apple and Spotify has been spiced up with some tidbits from Travis and Taylor’s romance.
Among the Traylor highlights over the past year were such scenes as Travis dancing to Swift’s “Shake It Off” during a live taping in April in Cincinnati — where both men attended the University of Cincinnati — and Travis gushing about Swift’s “insane” Eras Tour show at Gillette Stadium in December. Kelce also revealed the the moment the singer officially won over brother Jason during an episode earlier this year, in one of the many mentions of the pop superstar on the pod.
The Kelces have both been expanding their off-field activities lately, with Jason joining ESPN as an analyst and Travis signing on to host Amazon’s Are You Smarter Than a Celebrity? and booking a slot on Ryan Murphy’s upcoming FX horror show Grotesquerie, as well as circling the action comedy Loose Cannons.
Their mega-deal comes amid new of a few other huge signings recently, including Wondery’s similar distribution and ad sales deal with actor Dax Shepard’s Armchair Expert pod, which signed an estimated $80 million pact in July, as well as the just-announced $125 million deal Alex Cooper signed wit SiriusXM for her Call Her Daddy show.
While biking across Iowa this summer, Mark Michaels enjoyed a rare moment of reflection. “You’re riding about 80 miles a day among cornfields, and it gives you a lot of time to think,” the United Record Pressing chairman/CEO says. “I spent a lot of time while I was peddling thinking about United,” he adds of the oldest and largest American-owned, U.S.-based vinyl pressing plant in the world, which will celebrate its 75th anniversary this fall.
Michaels is speaking from his Nashville office, where he’s surrounded by signed records from Buddy Guy, Jack White and more of his icons, all expressing their thanks to him and his manufacturing team. (In 2014, White made history by recording, pressing and releasing a 7-inch of his single “Lazaretto” in under four hours, thanks to URP.) “It’s easy to forget those moments of euphoria and gratitude because you’re so focused on ‘How many records of this did we ship?’ or ‘What’s going on with that press?’ ” Michaels says. “But you don’t want too much life to pass by where you don’t stop and reflect.”
URP was founded as Bullet Plastics in Nashville in 1949, becoming Southern Plastics in the ’50s before landing on United Record Pressing in 1971. By the ’60s, a deal was signed for the plant to handle singles pressings for Motown, and in 1963, the first Beatles 7-inch, “Please Please Me”/“From Me to You,” was pressed, with a typo that spelled the band’s name as The Beattles.
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In 2007, a year before Record Store Day officially launched and just before the format was beginning its first-wave resurgence, Michaels bought the company — and helped sustain it through a particularly rough patch. As he recalls, half of URP’s output at the time was 12-inch singles created as promo records for DJs. “That was a lot of what we did, and shortly after I bought the company, the labels stopped doing that,” he says. “The DJs all got [music production software] Seratos, and the labels figured out that was a better business model. So all of a sudden, the health of the company was in serious jeopardy … We were doing everything to keep the lights on.”
By the summer of 2009, a career-changing order came in: a 50th-anniversary pressing of Miles Davis’ Kind of Blue (a favorite of Michaels) — the plant’s biggest order to date. Michaels himself oversaw quality control, checking a record at random every 30 minutes. “I remember one night, it was two in the morning and I’m in my office listening to these records, and I thought, ‘This is crazy, but goddamn, I’m lucky.’ And it just gave me this boost of energy. The next month, we got another order of that size.” Since, URP has manufactured vinyl for every major artist, from Adele to Taylor Swift.
In the early 2020s, URP faced another challenging period: the coronavirus pandemic. “Demand for vinyl exploded” during lockdown, Michaels says, but the orders put an unprecedented pressure on pressing plants to keep up. He says that was the catalyst for URP to expand, resulting in an $11 million project that built new infrastructure and supporting equipment and added 26 new presses. “The challenge is you can’t do that overnight,” he says. And now, not only can URP meet demand, but “the plant runs better than ever.”
He and his team of approximately 130 employees — all of whom have been sporting anniversary T-shirts that detail the plant’s various logos over the years — are now ready to toast such a feat and storied history, with Michaels saying the energy “is palpable” at the plant these days. A forthcoming celebration will bring together partners, customers, vendors and “people who support the format … There’s a renewed sense of pride and interest in what we do.”
Already, Michaels is focused on how to maintain it for the next 75 years, doubling down on the honor he has in keeping the process — and workforce — in Music City. “Seventy-five-plus years of history gives you a lot of gas in your tank in terms of pride,” he says. “You don’t make the first Beatles record in America, you don’t make all these Motown records, you don’t accumulate all this history and know-how and not have something special. And I never want to lose that.”
This story appears in the Aug. 24, 2024 issue of Billboard.
Sean “Diddy” Combs wants a federal judge to end one of the several sexual abuse cases he’s facing, arguing that the “salacious” lawsuit is filled with “blatant falsehoods” designed to force him into a settlement.
In a motion filed Monday in Manhattan federal court, attorneys for the star ask a judge to dismiss a case filed in February by Rodney “Lil Rod” Jones, who claims Combs sexually assaulted, drugged and threatened him while he worked as a producer on the rapper’s 2023 The Love Album.
Though they say the case is really nothing more than a “run of the mill commercial disagreement,” Combs lawyers claim Jones’ lawyer added “meaningless allegations and blatant falsehoods” in order to “generate media hype and exploit it to extract a settlement.”
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“Running to nearly 100 pages, it includes countless tall tales, shameless celebrity namedrops, and irrelevant images,” Combs’ lawyers write. “Yet, despite all its hyperbole and lurid theatrics, the [complaint] fails to state a single viable claim against any of the Combs defendants.”
The filing took personal aim at Jones’ attorney Tyrone Blackburn, citing a recent ruling in a separate case in which a federal judge sharply criticized the lawyer for filing suits designed to “garner media attention” and “embarrass defendants.”
Once one of the most powerful men in the music industry, Diddy has been hit with at least seven civil lawsuits alleging sexual abuse over the past year, including claims by ex-girlfriend Cassie Ventura that were followed by a video showing him assaulting her. The hip-hop mogul is also facing an apparent federal criminal investigation after authorities raided his homes in March.
Though the rapper has denied the legal allegations against him, he issued an apology in May over his conduct captured on the video of the Ventura attack: “My behavior on that video is inexcusable. I take full responsibility for my actions in that video.”
Jones sued in February, accusing Diddy not just of sexual assault but also of operating a sweeping conspiracy that violated the Racketeer Influenced and Corrupt Organizations Act — the federal RICO statute that’s more often used in criminal cases against mobsters and drug cartels. He also accused Combs and others of violating federal sex trafficking laws.
In Monday’s motion to dismiss the case, attorneys for the rapper argued that Jones had fallen well short of showing that he could sue under RICO.
“Because litigants frequently attempt to transform garden-variety fraud or breach of contract cases into RICO claims, the civil provisions of RICO are the most misused statutes in the federal corpus of law,” Combs’ lawyers write, quoting from earlier rulings. “Thus, courts strive to flush out frivolous RICO allegations at an early stage of the litigation.”
Combs lawyers also asked the judge to dismiss the other claims in the case. They argued that the claim of sexual assault is spelled out in “two vague paragraphs” in which Jones “fails to allege essential facts, such as the where, when, and how of the purported misconduct, or even any conversation about, report of, or witness to any particular occurrence.”
Jones’ attorney, Blackburn, did not immediately return a request for comment from Billboard. But in a statement to Deadline, Blackburn called the motion to dismiss “nothing more than a billing exercise by Sean Combs’ latest set of lawyers.”
“It is a weak attempt to fill their pockets before he is indicted, and they decide to haul ass, just like his five previous lawyers did,” Blackburn told the outlet.
Jones’ case initially named Universal Music Group (UMG) and CEO Lucian Grainge as defendants, claiming they “aided and abetted” Combs in his alleged misconduct and were members of the RICO conspiracy. But Jones later dropped them from the case, with Blackburn admitting there had been “no legal basis for the claims and allegations that were made against the UMG defendants.”
Read the entire motion filed by Combs’ lawyers here:
The merger between entertainment giant Paramount and media company Skydance is set to go ahead after Edgar Bronfman Jr. withdrew a competing offer.
Bronfman, executive chairman of streaming service Fubo, told Paramount’s special committee of directors Monday night that he would not proceed with his bid.
“While there may have been differences, we believe that everyone involved in the sale process is united in the belief that Paramount’s best days are ahead,” he said.
Bronfman, the former chairman and CEO of Warner Music, had intitially offered $4.3 billion for Shari Redstone’s National Amusements, the controlling shareholder of Paramount, according to multiple media reports. He then upped that bid to $6 billion.
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Paramount agreed last month to a merger deal with Skydance that will inject desperately needed cash into a legacy studio that has struggled to adapt to a shifting entertainment landscape.
Since then, during what’s known as a “go shop” period, a special committee of Paramount’s board had reached out to more than 50 third parties to determine whether they were interested in making offers. The go shop period was extended for Bronfman, but has now closed.
Shari Redstone’s National Amusements has owned more than three-quarters of Paramount’s Class A voting shares through the estate of her late father, Sumner Redstone. She had battled to maintain control of the company that owns CBS, which is behind blockbuster films such as “Top Gun” and “The Godfather.”
The deal signals the rise of a new power player, Skydance founder David Ellison, the son of billionaire Larry Ellison, who founded the software company Oracle.
Skydance, based in Santa Monica, California, has helped produce some major Paramount hits in recent years, including Tom Cruise films like “Top Gun: Maverick” and installments of the “Mission Impossible” series.
The proposed combined company of Paramount and Skydance is valued at around $28 billion. The deal is expected to close in September 2025, pending regulatory approval.
Paramount, founded in 1914 as a distributor, is one of Hollywood’s oldest studios and has had a hand in releasing numerous films — from “Sunset Boulevard” and “The Godfather,” to “Raiders of the Lost Ark” and “Titanic.”
After more than a decade out of circulation, SPIN is returning to print as a quarterly magazine, the media brand announced Tuesday (Aug. 27) — the same day its first new issue featuring cover star Lainey Wilson hits newsstands. The revived magazine will again be run by SPIN founder and editor-in-chief Bob Guccione Jr., who […]
UPDATE (Aug. 26): Shaboozey’s ex-record label sued him back after the singer filed his own lawsuit against the company, accusing him of “fraud” to avoid fulfilling his contractual obligations. You can read more here.
PREVIOUSLY (Aug. 23): Amid the chart-topping success of “A Bar Song (Tipsy),” Shaboozey is now suing music publisher Warner Chappell — claiming the company is stonewalling his efforts to exercise a contractual provision that would give him an early exit from his deal.
In a case filed Wednesday (Aug. 21) in Los Angeles, the country star (born Collins Obinna Chibueze) claims his publishing administration deal with Warner-Tamerlane (a unit of Warner Chappell) contained an acceleration clause — meaning he could repay 110% of advances to speed up the expiration of the deal.
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Shaboozey’s lawyers say he invoked that clause last month — perhaps unsurprisingly, given the massive success of “Bar Song.” But they claim Warner has, thus far, declined to even tell him how much is owed.
“To date, Warner has refused to disclose to plaintiff the total amount of the unrecouped balance of prior advances it made,” writes Todd Bonder, the star’s attorney. “Warner’s conduct violates the administration agreement signed between the parties.”
The lawsuit comes amid a breakout year for Shaboozey. “A Bar Song,” a genre-blending hit that interpolates J-KWON‘s 2004 rap hit “Tipsy” into a bouncy pop country track, has spent six weeks at No. 1 on the Billboard Hot 100, tying the longest chart-topping stint for a song in 2024.
In his complaint, Shaboozey also names his former record label, Kreshendo Entertainment, as a defendant. He claims the company — which he left in 2019 before signing a new record deal with Empire — is the reason Warner is refusing to turn over the crucial information.
“Kreshendo and [others] have instructed Warner not to provide plaintiff the total unrecouped balance related to advances made with respect to the compositions or has refused to authorize Warner to provide such information,” his lawyers write.
The dispute appears to turn on Shaboozey’s argument that he personally took over Kreshendo’s role in the contract with Warner after he terminated his label. In his legal filings, he says that Warner “has not agreed” with such an interpretation.
The lawsuit also claims that Kreshendo released three separate Shaboozey songs in 2019 after he had already terminated the deal — “More,” “Joan Jett” and “Prosperity” — without his permission.
A spokesman for Warner Music Group did not immediately return a request for comment. A spokesperson for Kreshendo could not immediately be located for comment. A publicist for Shaboozey did not return a request for comment.
Days after Shaboozey sued both Warner Chappell and his former record label, the label sued him right back — accusing the breakout country star of using “fraud” and “bad faith” to avoid his existing contractual obligations in the wake of the massive success of “A Bar Song (Tipsy).”
In a complaint filed Friday (Aug. 23) in Los Angeles court, Kreshendo Entertainment claims that after it released Shaboozey (Collins Obinna Chibueze) from his record deal in 2019, the company retained key rights to his music. Rather than stick to those requirements, Kreshendo claims the star has instead “elected a strategy of fraud and misrepresentation to deprive plaintiffs of their contractual rights.”
“Notably, Shaboozey had no issue with any of these terms for years,” write the company’s attorneys, from the law firm Reed Smith. “It was only after he recently released the ‘Bar Song,’ which has become a huge hit, that he has taken sudden issue with the terms he expressly agreed to.”
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The new case was filed just two days after Shaboozey filed his own case on Wednesday (Aug. 21) against Kreshendo and Warner Chappell. In that lawsuit, Shaboozey claimed that Warner was blocking him from exiting a publishing administration deal and that it was doing so at the behest of Kreshendo even though he had terminated the label years earlier.
But in the new accusations, Kreshendo says it’s Shaboozey who’s in the wrong. The company admitted that it had released Shaboozey from his record deal in 2019 but argued that the move came with important stipulations — namely, that Kreshendo would continue to own a 50% stake in all of the singer’s compositions and retain a right to be paid a percentage of profits from his masters.
Those requirements were put in place, according to Kreshendo, to compensate the company for the support it had provided a then-undiscovered singer.
“Before Shaboozey became the well-known artist he is today, he was an unknown artist that plaintiffs believed in, and they agreed to invest their time and money to help him develop and reach success in the music industry,” the complaint reads.
The lawsuit claims that Shaboozey has repeatedly breached the termination agreement, including through failing to pay the required profits and also through the wrangling with Warner that was detailed in his own lawsuit earlier in the week. Kreshendo says Shaboozey’s statements to Warner, including directing the company to stop paying Kreshendo, have been “false” and “an attempt to circumvent his contractual obligations.”
An attorney for Shaboozey did not immediately return a request for comment from Billboard on Monday (Aug. 26). Warner Chappell, which was named as a defendant in Shaboozey’s case, is not a plaintiff in the newer lawsuit.
The dueling lawsuits come amid a breakout year for Shaboozey. “A Bar Song,” a genre-blending hit that interpolates J-KWON‘s 2004 rap hit “Tipsy” into a bouncy pop country track, has spent seven weeks at No. 1 on the Billboard Hot 100, marking the longest chart-topping stint for a song in 2024.
The Schulhof surname first became associated with the music business when former Sony America vice chairman Mickey Schulhof led the negotiations to acquire CBS Records in the late 1980s. But his son David staked out his own territory in 2006, when, backed by Trilantic Capital Partners, he used institutional money to buy music publishing assets from songwriters as a co-founder of Evergreen Copyrights — an early player in the song catalog gold rush that would extend into the 2020s. Schulhof and his partners later sold Evergreen to BMG for $80 million in 2010. Now, after spending about a dozen years as a publishing and business development executive for various film studios — as well as a two-year stint as a managing director of G2 Investment Group, a spinoff focusing on media assets for private equity firm Guggenheim Partners — the 53-year-old Georgetown University graduate is touting music industry stocks to retail investors through his latest undertaking, MUSQ Global Music Industry ETF.
ETFs, or exchange-traded funds, are essentially hybrids of mutual and index funds that enable investors to participate in the performance of publicly traded companies without buying individual stocks. ETFs tend to focus on a specific industry or investment theme. MUSQ (pronounced “music”) is an industry index fund that lets retail investors participate in the music industry’s growth through investments in 40 to 50 mainstream company stocks, including the three major-label groups, the major digital service providers (Spotify, Amazon, Apple and Alphabet), Live Nation, SiriusXM, LiveOne and Sonos. It also includes international music companies HYBE, Alex, CTS, Believe and HIM International Music.
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Schulhof, who designed the parameters of the index — which is a passive investment vehicle — and serves as its sponsor, launched MUSQ on July 7, 2023, with $2 million in seeding from Goldman Sachs. That investment enabled the creation of about 100,000 shares in the ETF. On that first day of trading, it closed at $24.95. Today, the fund has grown to about 900,000 shares and is backed by the stocks of music companies that carry a net asset value of about $22.8 million.
On Aug. 6, MUSQ closed at $22.17 a share, a week after Schulhof talked to Billboard about his reasons for creating the fund, as well as its performance since its launch.
The MUSQ website lists you as CEO of the fund. If you are the creator and the chief executive, why doesn’t your name appear on any of the financial filings with the U.S. Securities and Exchange Commission? Jay Garrett Stevens is listed as the CEO in the annual report.
Once I owned the index, I licensed it. There are maybe a half a dozen white-label, turnkey service providers that manage and work with ETF investment trusts. In order to be listed on any of the stock exchanges, the fund has to be a trust. So I identified what I believe to be the best ETF service provider out there, Exchange Traded Concepts. If you go to their website, you’ll see they manage several billion dollars and something like 60 ETFs across all kinds of other thematic funds. Garrett is the CEO of ETC, and he is listed in all those filings like that, as are the names of [ETC’s] portfolio advisers.
Promotional materials that Schulhof handed out during MUSQ’s first day of trading.
Nina Westervelt
In that case, what is your role with the MUSQ fund?
I am the founder, sponsor, owner and CEO. I handle all marketing. I am the face for this fund. I’ve done tons of podcast interviews and things like Fintech.tv. When reporters call, I am the one talking about the results from Luminate’s midyear report, Goldman Sachs’ Music in the Air report or something Billboard may have written about. I’m also out there talking to investors, evangelizing about how the music industry is undermonetized, and cheap when it’s compared to streaming services like Netflix or Hulu.
How do your service providers work with MUSQ?
ETC is doing all the back-office work for me. They are the adviser and the trading subadviser. Here’s an analogy: If I buy a publishing catalog and outsource it to Kobalt to handle the collections, accounting and to deal with all the other back-office stuff, it’s basically the same thing. Meanwhile, VettaFi does the rebalancing of the index fund every quarter, aligning it with the eligibility requirements for the companies’ shares in the fund. I give those results to ETC.
Do you have any fiduciary responsibility for the fund?
No. What I do on a daily basis besides marketing is deal with all the compliance. I get everything cleared and [Financial Industry Regulatory Authority-approved]. And I need to get my appearances on podcasts and other media approved by compliance if I want to put them on our website.
What are the eligibility requirements for a company’s shares to be considered for inclusion in the MUSQ index?
Companies eligible for the MUSQ index either have to generate more than 50% of their revenue from music or they have to be a top five player in [music] streaming or content, live music, ticketing, technology or radio. If you look in our fund, we do have Apple, Amazon and Google, and clearly those names don’t generate more than 50% of their revenue from music, but they are among the top five players in the streaming category.
A plaque that the New York Stock Exchange presented to him on July 13, 2023, when he rang the closing bell.
Nina Westervelt
What other requirements or restrictions does MUSQ have?
No single stock can be greater than 5% of the fund’s overall holdings. It used to be 7%, but I lowered it. If a company has a good year and its stock comprises 8% of the index, it would be rebalanced at the end of the quarter. Other rules: No company can have less than a $100 million market capitalization or a daily trading liquidity of less than $500,000 per day. So those rules help give the index a good crosssection of small-cap, midcap and large-capitalization companies with liquidity. And I added a small buffer: If a company drops below $100 million in market cap, then their capitalization weight is cut in half. If the stock price continues to drop in the next quarter, it comes off the index.
Have any mainstream music industry stocks not met the requirements to be included in the index?
You may notice Deezer is not in our index. Even though it has over a $200 million market cap, it does not meet the daily trading liquidity requirement.
Have any companies been removed from the index?
IHeart was once in our fund but the stock is down 70%, so it is no longer in the index. The reverse is true if a small [music-related] company grows and now has a market cap greater than $100 million and it also has the required daily trading level of liquidity. Then it can become eligible. It has to have both ingredients.
When a big company in the index releases its financials, does it have much of an impact on the index’s share price?
Yes. The share price is based on the net asset value, but earnings do have an impact. Spotify right now has an average weight of about 3.4% in our fund, so it’s a top 10 holding. The stock crushed earnings in July, and year to date it’s up almost 70%, so that’s going to have a greater weight this quarter because it delivered stellar results. Other stocks like Believe and Tencent are posting positive returns that will have an impact on the weighting. But no single name can be greater than 5% of the fund. MUSQ pricing has been pretty stable during the past year [ranging from a high of $25.82 on July 31, 2023, to a low of $22.17 on Aug. 5, 2024].
This signed copy of Dr. Dre’s The Chronic is a souvenir from Schulhof’s first music industry internship with Jimmy Iovine at Interscope. Dre’s inscription: “Join the Chronic Patrol and take the hit of the bomb shit! Stay up.”
Nina Westervelt
What happens when the stocks in the index aren’t doing well?
MUSQ is a highly diversified, uncorrelated fund. So when the markets are tanking, MUSQ is not tanking. Also, we’re not a meme play in any way. This is really designed to capture the growth and accurately track the global music industry. We view this as a long-term growth investment for investors.
Does MUSQ consist entirely of equity investments, or do you buy fixed-income instruments from these companies too?
They are all equities.
You say your fund is diversified by music industry sector, geography and genre.
The index has labels and music publishers that supply content, it has companies in the concert business, it has technology stocks, and those companies are diversified by genre. Also, the index is diversified across many countries. Today, it looks like 49% is U.S., 21% is Korean, 11% is Japan. If you go to the index page on our website, it will give you a breakdown. Internationally, we’ve got some exciting companies: Tencent in China, CTS Eventim in Germany, Hipgnosis in the U.K., Believe in France. And then we’ve got 10 or 11 K-pop stocks like Genie Music Corp and Cocoa, [and] the two biggest streaming companies in South Korea, HYBE and YG Entertainment. We have companies like Cloud Music and Avex in Japan and Amuse, one of the biggest content companies in Taiwan.
Does having international companies make the index more attractive to investors?
All the international companies in this fund trade in local currencies. You would have to open up local accounts to trade them, and that costs fees. MUSQ creates a very liquid, convenient and portable way for investors to have access to all these exciting companies.
Guitar that Bruce Springsteen autographed for Schulhof when they met after a show on the 1996 Ghost of Tom Joad tour.
Nina Westervelt
How did you do on Hipgnosis?
Hipgnosis was 2.3% weight in our fund and because Blackstone is taking it private, it is up 42%, so we made money on it.
Your fund has grown from $2 million in assets to over $20 million in assets. What’s the next goal?
To reach $25 million. A lot of financial firms have that as a minimum before they offer it to their customer. Beyond that, it’s $50 million. If the MUSQ fund gets to that point, it would have hundreds of thousands of financial advisers offering it as an investment option.