Royalties
At least half a dozen distributors and record labels are frustrated with the streaming service Napster due to late royalty payments, executives tell Billboard. In some cases, rights holders say Napster is a few months behind schedule; in others, the lag on payments is well over a year.
Napster, despite its history as a pirate-disruptor to the recorded music business around the turn of the century, has long operated as a licensed streaming service, albeit a small one. But “for years, they have cited fundraising struggles as an excuse for delayed royalty payments,” according to one executive at a distributor who spoke on the condition of anonymity.
Napster’s CEO, Jon Vlassopulos, declined to comment.
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Napster is not the first streamer accused of falling behind on payouts. A lawsuit against TIDAL in 2021 revealed that the platform had $127 million in liabilities, mostly in the form of unpaid streaming fees to record labels. TIDAL CEO Jesse Dorogusker told Billboard in 2023 that the payment situation had been remedied following TIDAL’s acquisition by Block.
More recently, labels and distributors have said they are struggling to get timely payments from Boomplay, a streaming service with a large user base in Africa. In December, Sony Music pulled its catalog from the platform.
At the end of 2023, Boomplay said it had 98 million monthly active users across Africa. Napster is considerably smaller: It had a little more than 1 million monthly active users at the end of 2020, according to Music Ally.
Rights holders acknowledged to Billboard that the royalties they had received in the past from Napster account for just a small fraction — often less than 1% — of their overall streaming income. “What we earn from it as a distributor isn’t that much,” says an executive at another distribution company that is missing many months of Napster payments.
“But,” he continues, “in terms of payouts to the artists and the labels who we represent, it can be a solid sum of money.” $100,000, for example, may be a drop in the bucket for a volume distributor. However, that money can make a meaningful difference for a small indie label.
Napster launched in June 1999 as a file-sharing service that allowed users to download tracks for free. It was soon battling copyright infringement lawsuits from various heavy-hitters, including Metallica, Dr. Dre and the RIAA. “Napster is not developing a business around legitimate MP3 music files, but has chosen to build its business on large-scale piracy,” the RIAA wrote in a suit filed in 1999.
This first version of Napster shut down in 2001. The following year, Bertelsmann announced that it would acquire the service and turn it into a licensed listening platform. But a judge later blocked the sale.
In the years since, Napster has bounced from one home to another. It was first acquired by Roxio and then by Best Buy for $121 million in 2008. Three years later, Napster was scooped up by Rhapsody, an early music streaming service. Rhapsody subsequently rebranded itself as Napster in 2016.
In 2020, the virtual reality concert app MelodyVR bought Napster for $70 million. The company changed hands yet again in 2022, with Hivemind Capital Partners and cryptocurrency company Algorand becoming the new owners.
Vlassopulos took over as Napster’s CEO in the fall of 2022 following a stint as global head of music at Roblox. Two decades before, he had worked at Bertelsmann and been part of the team that put together the deal for Napster — only to have it scuttled months later. “It always stayed with me: What if we could have finished what we started?” Vlassopulos explained in an interview last year.
But first, he had to work on “cleaning up the Napster business.” “The company had been around for 20 years, and so now we’ve modernized,” Vlassopulos added. “We’re right at break even, and we’re kind of in a process now to raise material funds, or the company is maybe looking to roll us up into something bigger.”
Despite this progress, some rights holders told Billboard that they were considering pulling their catalogs from Napster, or no longer delivering new releases to the platform.
When labels and distributors are not receiving payments from streaming services, taking their catalogs off platforms is one of their only options. The other is to take legal action against the streamer.
But litigation is costly and time-consuming, which means rights holders are usually stuck sending follow-up emails over and over again. This hasn’t worked for several companies trying to get money owed to them by Napster, though. “Not only have they failed to pay royalties,” says the first distribution executive, “but they have also been unresponsive when we’ve attempted to resolve these matters.”
Songwriters Jessi Alexander, Amy Allen, Jessie Jo Dillon and RAYE will not be attending or performing at Spotify’s Songwriter of the Year Grammy party slated for Jan. 28, with Allen and Dillon citing Spotify’s treatment of songwriters as the reason for their absence. As a result, four out of five nominees in the Songwriter of the Year category at this year’s Grammys will be opting out of the event. (A representative for the fifth, Edgar Barrera, has not responded to Billboard‘s request for comment.)
Representatives for Allen (“Espresso” by Sabrina Carpenter, “Adore You” by Harry Styles and “greedy” by Tate McRae) and Dillon (“10,000 Hours” by Dan + Shay, “Lies Lies Lies” by Morgan Wallen and “Am I Okay?” by Megan Moroney) confirmed to Billboard that they both made the decision not to attend due to Spotify cutting royalty rates on premium streams for songwriters and publishers in April of last year, which Billboard estimated will lead to a $150 million decrease in royalties over 12 months compared to how much they would have made had the royalty rate not been reconfigured.
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Spotify believes it qualifies for a lower mechanical royalty rate for songwriters and publishers because it has added audiobooks to its premium subscription tiers and reclassified those services as “bundles,” with multiple services included in one price. Now, the royalty originally intended for songwriters and publishers alone is split between paying for music and audiobooks.
“After some thought, I couldn’t in good conscience support this initiative given their approach to bundling royalties,” said Dillon in a statement to Billboard. “It is very nice to be individually honored, but it is better for me and my entire songwriter community to be paid fairly for our art. There are no songs without songwriters.”
A representative for RAYE (“Escapism.” by RAYE, “Dancing With a Stranger” by Sam Smith & Normani, “Secrets” by One Republic) says the singer/songwriter never committed to attending or performing at this event, so “there’s nothing for her to back out of at present,” but adds that RAYE has been “an outspoken advocate on behalf of songwriters’ rights igniting an industry-wide dialogue on the topic.” A representative for Alexander (“Ain’t No Love in Oklahoma” by Luke Combs, “The Climb” by Miley Cyrus, “You, Me and Whiskey” by Justin Moore & Priscilla Block) confirmed to Billboard that she will not be attending the event but did not provide a reason for dropping out.
A representative for Spotify declined Billboard’s request for comment.
Spotify started its Songwriter of the Year Grammy event to celebrate the nominees for the prestigious writing award, which the Recording Academy established in 2023. Each Songwriter of the Year nominee has been invited to take the stage at Spotify party and sing the songs they wrote for other artists in a room full of their peers.
Other songwriters have taken to social media to express their dismay about Spotify’s upcoming event after receiving Save the Dates from the streamer. Songwriter Ross Golan said, via an Instagram Story, “If you are a songwriter, you cannot go to this. Do not let Spotify f— you on bundling and then give you free booze.” A 2023 Grammy Songwriter of the Year nominee Laura Veltz said in her own Instagram Story, “Spotify is robbing you. Songwriters: do not fall for this horse s—.”
In April 2024, Spotify officially added audiobooks as an offering to its premium tiers (which include premium, family and duo plans). By adding audiobooks, the streaming service claimed it now qualifies to pay a discounted so-called “bundle” rate to songwriters for premium, duo and family tier streams.
At the time, a Spotify representative said that “changes in our product portfolio mean that we are paying out in different ways based on terms agreed to by both streaming services and publishers” and called its decision to reclassify premium tiers as bundles as “consistent” with “multiple [other] DSPs.” Other competitors like Apple Music and Amazon Music do have bundled offerings — including Amazon bundling Prime and Amazon Music and Apple bundling Apple Music and Apple News — but Spotify’s move to make its popular premium tiers into bundles has a much larger impact than its competitors, given that Spotify is the most popular streaming service in the U.S. and the premium tiers are a widely used offering.
“Spotify is on track to pay publishers and societies more in 2024 than in 2023,” the Spotify representative added at the time, citing the company’s Loud and Clear report that says the streamer has paid nearly $4 billion to publishers, PROs and collection societies in the last two years.
The National Music Publishers Association (NMPA), The Mechanical Licensing Collective (MLC), and various songwriters did not take the news lightly. The MLC filed a lawsuit against Spotify in May, claiming the streamer “improperly” classified its premium tiers as bundles. The NMPA’s CEO/president David Israelite said Spotify had “declare[d] war” on songwriters and launched a multi-faceted attack that included sending a cease-and-desist for unlicensed lyrics, video and podcast content; unveiling a legislative proposal; and filing complaints with the FTC and nine other consumer trade groups.
Israelite has also voiced his disapproval over Spotify’s Songwriter of the Year party, saying in an Instagram post: “Is this a joke? Spotify declares war on songwriters. Is attempting to gut what they pay them. Is being sued by the MLC. And they think they can throw a party honoring songwriters? I’m at a loss for words. Actually, I’m not. Hubris. Audacity. Crassness. Hypocritical. Cynical. Forward this and add your own word.”
Sony Music pulled its catalog from the streaming service Boomplay on Monday (Dec. 9) due to late royalty payments, Billboard has confirmed. Several other prominent labels and distributors also confirmed to Billboard on Monday that they have not received recent royalty payments from the service. Additionally, a monthly payment report published by the distributor Symphonic […]
Universal Music Group (UMG) is firing back at a lawsuit from Limp Bizkit frontman Fred Durst claiming the label owes the band more than $200 million, calling the allegations “fiction” and demanding they be thrown out of court.
The blockbuster lawsuit, filed last month in Los Angeles federal court, claimed that Durst had “not seen a dime in royalties” over the decades — and that hundreds of other artists may have been treated similarly under “systemic” and “fraudulent” policies.
But in UMG’s first response on Friday, attorneys for the label said the lawsuit must be dismissed immediately because it is “based on a fallacy.”
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“Plaintiffs’ entire narrative that UMG tried to conceal royalties is a fiction,” writes Rollin A. Ransom, an attorney with the law firm Sidley Austin who represents UMG in the lawsuit. “Plaintiffs’ complaint fails as a matter of law and should be dismissed with prejudice.”
The key problem with Durst’s claims? According to UMG’s attorneys, it’s that documents included in his own lawsuit “eviscerate” his allegations. They specifically cite emails in which a UMG exec appears to have reached out to get royalties flowing, but was rebuffed by the band’s own business manager.
“Over a year before plaintiffs’ ‘discovery’ of allegedly ‘concealed’ royalties, UMG affirmatively and unilaterally reached out to Limp Bizkit’s representative so that it could begin making royalty payments to the band, and was instead informed by him that all members of Limp Bizkit but one (including plaintiff Durst) had assigned their royalty shares to others, and were therefore not entitled to any royalty payments from UMG,” the company wrote in Friday’s filing.
Durst’s attorneys did not immediately return a request for comment on Monday. They will have a chance to file a formal response in court opposing UMG’s motion to end the case.
Durst and Limp Bizkit sued UMG in October, claiming the band had “never received any royalties from UMG,” despite its huge success over the years: “The band had still not been paid a single cent by UMG in any royalties until taking action.”
That claim was something of a stunner. How had one of the biggest bands of its era, which sold millions of records during the music industry’s MTV-fueled, turn-of-the-century glory days, still never have been paid any royalties nearly three decades later?
According to Durst, the answer was an “appalling and unsettling” scheme to conceal royalties from artists and “keep those profits for itself.” He claimed the company essentially kept Limp Bizkit in the red with shady bookkeeping, allowing it to falsely claim the band remained unrecouped — meaning its royalties still had not surpassed the amount the group had been paid in upfront advances.
But in Friday’s response, UMG said such claims of “concealment” were undercut by those emails. UMG says the message show a senior royalties director reaching out on his own initiative to Paul Ta, the band’s business manager, to “start making royalty payments,” but being rebuffed.
“Mr. Ta rejected that proposition, responding that all the Limp Bizkit members but one (including Plaintiff Durst) ‘have … sold/assigned their share [of the royalties] to various companies,’ such that no royalty payments were owing to any of those individuals (including Plaintiff Durst),” UMG wrote in Friday’s motion.
UMG says Ta later emailed back that his statements had been incorrect, at which point the label paid out roughly $3.4 million to the band and its companies – a fact that contradicts the lawsuit’s claims of “never received any royalties.”
“Plaintiffs concede thereafter receiving millions of dollars in payments from UMG,” the label wrote Friday. “Plaintiffs nevertheless brought this suit alleging breach of contract and fraud on their ‘suspicion’ that they are owed more royalties, and seeking rescission of the parties’ agreements.”
Ten-time ASCAP songwriter of the year Ashley Gorley is donating royalties from the Billboard Country Airplay chart-topping hit “I Am Not Okay,” written by Gorley with co-writers Taylor Phillips and Casey Brown, and recorded by Jelly Roll, to help aid mental health initiatives for those in the songwriting community.
Gorley, who is also known for writing No. 1 hits including the Morgan Wallen/Post Malone 16-week Hot 100 chart-topping “I Had Some Help” and other hits recorded by Carrie Underwood, Chris Stapleton, Kelsea Ballerini and more, is commemorating the success of “I Am Not Okay” by supporting the launch of a program by The Onsite Foundation, aimed at helping the creative community. The Creatives Support Network will provide free mentorship, education, resources and mental wellness support specifically created to help members of the songwriting community.
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“A song about struggling to get out of bed in the morning is No. 1 and that really speaks to where we are in the world,” Gorley said in a statement. “It was important for us to take this moment to say ‘you’re not the only one,’ and to support a creative network with programming that is tailored to songwriters at any stage of their journey.”
Songwriter-focused intensives are a key part of the program, including two-day immersive, individual or group coaching and therapy sessions designed for creatives. The program also includes mentorship, social impact initiatives and online curriculum and conversation resources complimentary to the creative community, thanks to Gorley giving 80 grants for 80 individuals, in addition to program infrastructure support.
“This song in particular, along with the Jelly Roll Era, is creating a movement and timely conversation regarding the need to equip creatives with necessary tools to optimize their personal and professional pursuits,” Onsite’s Miles Adcox said in a statement. “I’ve been at the intersection of Music and Mental Wellness for the better part of my career and have experienced firsthand the challenges and opportunities facing today’s creatives. Music is medicine, and the comfort, relief, support, and overall impact it provides globally to humanity is immeasurable. Our storytellers are a national treasure we should pour into and protect at all costs. We’re grateful to Ashley, Jelly Roll, and the Tape Room writers for starting this conversation in the songwriting community and for lending their expertise and resources.”
The Jelly Roll hit “I Am Not Okay” offers an honest portrayal of the struggles many face with mental health issues. The song is from Jelly Roll’s recent Billboard 200-topping album Beautifully Broken.
Among Gorley’s recent accolades are ACM songwriter and song of the year for the Cole Swindell hit “She Had Me at Heads Carolina,” and ASCAP’s country song of the year with Wallen’s “You Proof.” Gorley was also honored as NSAI’s Songwriter of the Decade for 2010-2019.
In 2011, Gorley, a Belmont University graduate, also formed his own publishing company, Tape Room Music, with a roster that includes his “I Am Not Okay” co-writers Brown and Phillips.
As Billboard reported Thursday (Oct. 24), global royalty collections rose 7.6% to a new high of 11.75 billion euros ($10.9 billion, based on the average exchange rate for 2023), according to the Paris-based trade organization CISAC (the Confédération Internationale des Sociétés d´Auteurs et Compositeurs). That article covers the basic news — digital collections grew 9.6% to 4.52 billion euros ($4.18 billion); radio and television collections declined 5.3% to 3.37 billion euros ($3.11 billion) after a significant jump the previous year; and live and background music collections grew 21.8% to 3.06 billion euros ($2.82 billion), fueled mostly by a resurgent concert business. There’s more detail in the news article.
Now let’s take a longer-term look at the state of the market to see where all the recent growth has come from and what that implies about the future. Since 2019, the music collections business has grown from 8.92 billion euros ($8.24 million) to 11.75 billion euros ($10.9 billion), an increase of 31.7% over five years, which is annualized growth of more than 6%. That arguably presents a more accurate picture of market trends than year-by-year changes from this period, since the concert business was so disrupted by the pandemic.
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Most of that growth came from digital, which grew 119% — from 2.06 billion euros ($1.9 billion) in 2019 to 4.52 billion euros ($4.2 billion) last year. Perhaps more important, the 2.46 billion euros ($2.27 billion) of digital growth represents almost all the growth in the business during that time. And that growth is starting to slow. In 2023, digital growth slowed from 35.1% to 9.6%, which contributed to an overall slowing of growth from 29% to 7.6%. Some of that is inevitable — subscription streaming growth has leveled off in the U.S. and Western Europe, the biggest markets that traditionally drive the business. Together, the U.S., Western Europe and Canada account for almost 75% of collections revenue. Digital revenue will almost certainly keep growing — from price increases and new products, among other factors, but the wonder years of digital growth may be in the past.
The state of global royalty collections offers other reasons for optimism, though. First, a caveat: These numbers don’t provide a perfect picture of the music publishing business, or even public performance royalties, since some digital royalties are paid through direct deals. These numbers represent the best global picture of the collecting business available, though, and it seems safe to say that the direct deals, for which numbers aren’t available, roughly follow these trends. This almost certainly understates the growth of the music publishing business, though, since it doesn’t include U.S. mechanical publishing royalties, any synch rights and a variety of new kinds of deals.
The challenge for collecting societies is that the second largest source of revenue, from TV and radio play for compositions, does not seem to be growing. It was 3.4 billion euros ($3.14 billion) in 2019 and it’s now 3.37 billion euros ($3.11 billion) — a more significant decline than it seems, given inflation. Since this revenue is tied to TV and radio businesses in most markets, some of it seems to have gone to digital, which has replaced it as the most important source of revenue.
There’s more hope in the live business. The disruption of the pandemic made this hard to see, but live and background music royalties are growing steadily — from 2.71 billion euros ($2.5 billion) in 2019 to 3.06 billion euros ($2.83 billion) last year — a rise of 12.7%. That’s not so big, divided over five years, but live is growing faster than the rest of the category, and growth in ticket prices for the biggest tours will result in more royalty revenue in territories where that’s linked to ticket prices. That trend is expected to continue, too. That could make live music an important source of growth in both established markets and new ones.
Right now, the collecting society revenue breaks down as follows: 38.5% of money comes from digital; 28.7% from TV and radio; 26.1% from live and background music; 3.2% from CD and video sales; 2.4% from private copy levies (which the U.S. does not have); and 1.1% from other sources. How might that look five years from now? It’s hard to imagine digital climbing above half since that would imply a significant decline for TV and radio revenue. Live royalties should climb, maybe significantly, and background music revenue could climb in some markets, although it’s not likely to grow so much in the U.S. and Western Europe.
The origins of collections revenue will also change: There’s also really impressive growth coming from parts of the world that barely generated much revenue five years ago. Collections in Latin America rose 26.2% last year but 108.2% over the last two years, driven by Mexico and Brazil and the spread of streaming throughout Latin America. Right now, that impressive growth doesn’t change the overall picture much — the region still only accounts for 5.9% of collections revenue. But if that growth pattern continues, the market could become significant soon. Over the last five years, Latin America collections went from 4.1% of the global total to the aforementioned 5.9% share.
The same goes for some markets in Asia. Overall, there’s not much growth there — it’s down 0.3% because of Japanese currency fluctuations but up 6.8% on a constant currency basis. But Vietnam, Indonesia and the Philippines, where between 80% and 85% of collections revenue comes from digital, are up 270.4%, 111.6% and 325.8%, respectively, over the last five years. Those increases aren’t big enough in revenue terms to lift the overall business, but they’re growing fast enough that they could make a difference five years from now. Africa, hailed as having so much potential, seems to be stuck: It went from accounting for .7% of global music collections to .6%. That won’t matter much to overall revenue anytime soon. But it shows how the music business still faces serious challenges in Africa, as well as how those challenges impact real, working creators. These problems are complicated, but they are also urgent: Creators in Africa deserve better.
Growth is continuing in bigger markets, however; the top 10 markets grew 6.3% last year. Over the past five years, the U.S. and Canada grew 44.4% and 38.9% respectively, with the U.K., France and Germany up 44.5%, 34.7% and 20.2%. The strongest growth over that time took place in Korea, up 70.9%. The health and stability of the larger markets should make it easier for the fast-growing smaller ones to improve the entire business.
Global royalty collections for song rightsholders grew 7.6% last year, to a new high of 11.75 billion Euros ($10.9 billion, based on the average exchange rate for 2023), according to CISAC (the Confédération Internationale des Sociétés d´Auteurs et Compositeurs), the Paris-based collecting societies trade organization. Much of the growth was driven by two categories: Digital collections rose 9.6% to 4.52 billion Euros ($4.18 billion), while live and background music royalties grew 21.8% — fueled largely by the concert business — to overtake the pre-pandemic total from 2019.
The big collecting societies all had good years, but the CISAC report offers unparalleled insight into a complicated but important part of the music publishing business. (CISAC includes other collecting societies from outside the music business, but publishing accounts for most of these royalties, which are, in turn, more important to music than to other businesses. CISAC breaks out music royalties, but its figures only include those that go through CISAC member societies rather than direct deals.) There are no big surprises here: Digital has been the main driver of growth recently, more than doubling in five years from 2.06 billion Euros ($1.90 billion) in 2019 to 4.52 billion Euros ($4.18 billion) last year — although last year’s growth of 9.6% was lower than in any of the preceding four. Digital now accounts for 38.5% of collections, more than any other category.
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Collections for broadcast and live concerts and background music represent the two other major sources of revenue, accounting for 28.7% and 26.1%, respectively. (Background music refers to compositions played in public, at restaurants, stores or bars, for example.) Royalties from TV and radio declined 5.3% to 3.37 billion Euros ($3.11 billion) after a significant jump the previous year. They have stayed fairly steady over the past half-decade.
The live and background music figures are more complicated because of the disruption from the pandemic. Last year those categories grew to 3.06 billion euros ($2.82 billion), fueled mostly by the return of live music revenue, which in some regions may lag live music events. More significantly, that represents a 12.7% jump from 2019.
Collecting societies take in most of their business in Europe and the U.S.; CISAC has one category for Western Europe and another for the U.S. and Canada. Western Europe collections rose 8.2%, while those in the U.S. and Canada rose 7.8%. Taken as a whole, Europe accounts for more than half of total collecting society revenue, and the U.S. and Canada together account for another 27.1%. Asia-Pacific royalties shrank by .3%, largely due to currency fluctuations in Japan, without which the region would have seen 6.8% growth. The fastest growing region is Latin America, up by 26.2% — and by 108.2% over the past two years – although it only accounts for 5.9% of the overall market. Africa, where executives have seen massive potential for years, is still growing very slowly – up 3.2% to .6% of the overall market.
General CISAC collections are also up 7.6%, to 13.09 billion Euros ($12.1 billion), also an all-time high, with digital up 9.6% to 4.62 billion Euros ($4.3 billion). (This includes collecting societies for other media, such as writing and visual art, which many countries in Europe have.)
Billboard will follow this news story with a more extensive analysis of growth sectors, the future of various markets, and how this business might grow in the years ahead.
PPL has been appointed to collect neighboring rights for John Lennon and Yoko Ono. Announced Tuesday (Oct. 15), the deal will see the U.K.-based collective management organization (CMO) collect broadcast and public performance royalties globally on sound recordings where Lennon or Ono are listed as performers in markets where such rights exist. “PPL has shown […]
Weeks after Nelly’s former St. Lunatics groupmates sued him for allegedly cutting them out of royalties for his chart-topping breakout album Country Grammar, three of the ex-bandmates now say they never wanted to be part of the lawsuit and must be removed immediately.
In a letter sent last month, Nelly’s attorney warned the lawyer who filed the case last month that Murphy Lee (Tohri Harper), Kyjuan (Robert Kyjuan) and City Spud (Lavell Webb) had recently retained his services and had “informed me that they did not authorize you to include them as plaintiffs.”
“They are hereby demanding you remove their names forthwith,” N. Scott Rosenblum wrote in the Sept. 24 letter, which was obtained by Billboard. “Failure to do so will cause them to explore any and all legal remedies available to them.”
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The move is a major twist just weeks after Harper, Kyjuan and Webb joined fellow St. Lunatics member Ali (Ali Jones) in filing the lawsuit against Nelly (Cornell Haynes). But it also makes sense after Nelly’s performance on Sunday (Oct. 6) at the American Music Awards, where all three men joined him on stage and appeared to be on good terms.
The withdrawal of Harper, Kyjuan and Webb means that the case is now essentially a dispute between Nelly and Ali alone. Ali’s attorney who filed the case, Gail M. Walton, did not immediately return a request for comment.
A group of high school friends from St. Louis, the St. Lunatics rose to prominence in the late 1990s with “Gimme What U Got”, and their debut album Free City — released a year after Country Grammar — was a hit of its own, reaching No. 3 on the Billboard 200.
In their Sept. 18 complaint, the bandmates claimed that Nelly had repeatedly “manipulated” them into falsely thinking they’d be paid for their work on the 2000 album, which spent five weeks atop the Billboard 200. But they said he never made good on the promises.
“Every time plaintiffs confronted defendant Haynes [he] would assure them as ‘friends’ he would never prevent them from receiving the financial success they were entitled to,” the lawsuit reads. “Unfortunately, plaintiffs, reasonably believing that their friend and former band member would never steal credit for writing the original compositions, did not initially pursue any legal remedies.”
During and after the Country Grammar recording session, the lawsuit claimed, Nelly “privately and publicly acknowledged that plaintiffs were the lyric writers” and “promised to ensure that plaintiffs received writing and publishing credit.” But decades later, in 2020, the lawsuit claimed that the St. Lunatics “discovered that defendant Haynes had been lying to them the entire time.”
“Despite repeatedly promising plaintiffs that they would receive full recognition and credit… it eventually became clear that defendant Haynes had no intention of providing the plaintiffs with any such credit or recognition,” the lawsuit read.
Limp Bizkit and frontman Fred Durst are suing Universal Music Group (UMG) over allegations that the label owes the band more than $200 million, with Durst’s lawyers writing that he had “not seen a dime in royalties” over the decades — and that hundreds of other artists may have been treated similarly.
In a lawsuit filed Tuesday (Oct. 8) in Los Angeles federal court, attorneys for Durst and the 1990s rap rock band accused UMG of implementing a “systemic” and “fraudulent” policy that was “deliberately designed” to conceal royalties from artists and “keep those profits for itself.”
“UMG’s creation of such a system, while holding itself out as a company that prides itself on investing in and protecting its artists, makes plaintiffs’ discovery of UMG’s scheme all the more appalling and unsettling,” Durst’s lawyers write, adding that “possibly hundreds of other artists” had also “unfairlyhad their royalties wrongfully withheld for years.”
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In a stunning claim, Durst alleges that as recently as August, Limp Bizkit had “never received any royalties from UMG,” despite the band’s huge success during its turn-of-the-century peak. The lawsuit said the band’s albums had all sold millions of copies, and that Limp Bizkit continues to have “millions of streaming users per month on Spotify alone.”
“Despite this tremendous ‘come back,’ the band had still not been paid a single cent by UMG in any royalties until taking action against UMG, leading one to ask how on earth that could possibly be true,” Durst’s lawyers write.
A spokesman for UMG did not immediately return a request for comment on Tuesday.
Durst claims that the current dispute dates to April when he retained new representatives who were “shocked” when he informed them he had “not received any money for any Limp Bizkit exploitations — ever.” He claims UMG had previously told him that he was not being paid because the band remained unrecouped — meaning its royalties still had not surpassed the amount the group had been paid in upfront advances.
“Durst explained that he had been informed by UMG that he had not received any royalty statements because UMG told him over the years that it was not required to provide them since his account was still so far from recoupment,” his lawyers write. “Durst’s representatives, suspicious that UMG was wrongfully claiming Plaintiffs’ accounts were unrecouped, suggested investigating further.”
When Durst’s reps contacted UMG, they say they learned that Limp Bizkit’s accounts actually held more than $1 million in royalties but that the label had “failed to alert” the band about the money. That prompted more suspicion about “UMG’s accounting and payment practices” and an investigation into Limp Bizkit’s records.
They didn’t like what they found. According to the lawsuit, UMG had allegedly failed to issue royalty statements at all during significant periods of the band’s history, including “during the height of Limp Bizkit’s fame.”
“UMG’s failure to issue royalty statements in particular from 1997-2004 — the height of the band’s fame and during periods in which they made record-breaking sales — with respect to its most popular albums suggests that UMG was intentionally concealing the true amount of sales, and therefore royalties, due and owing to Limp Bizkit in order to unfairly keep those profits for itself.”
The suggestion that the band’s albums are still unrecouped is also “highly suspect,” Durst’s lawyers write, citing the band’s huge commercial success during its early years: “Given that Limp Bizkit’s first three albums had already sold several million copies by the early 2000s, the recording funds and costs should have been quickly recouped, and UMG should have started paying royalties on those albums right away — not over twenty years later,” the lawsuit reads.
The lawsuit also points to potential “fraudulent accounting practices” that Durst’s attorneys claim were used by UMG to improperly keep the band in the red and avoid paying royalties.
“But where did this additional $199,676.00 charged to the account come from?” his lawyers write, referring to one such alleged inconsistency. “It seems to have come out of thin air to overdraft Limp Bizkit’s due and payable account in order to defraud Limp Bizkit and show an unrecouped account.”
When those issues were raised with UMG, the lawsuit says the label argued that Limp Bizkit had been paid $43 million in recoupable advances over the years, which explained why the royalties had not started flowing into the accounts until recently. Durst’s attorneys say the label eventually released $1.03 million to the band and $2.3 million to Durst’s Flawless Records, but that they’re owed far more than that.
“Given the vast amounts of money collected by UMG in relation to sales of Limp Bizkit’s and Flawless Records’ albums over the years … UMG is liable to plaintiffs for tens of millions of dollars in copyright infringement, if not more,” the lawsuit reads. “Indeed, Plaintiffs allege that the amounts owed to them by UMG following the rescission of these agreements will easily surpass $200 million.”
In technical terms, the lawsuit seeks not only allegedly unpaid royalties, but also a ruling voiding the band’s contract with the label, the return of the band’s copyrights to their recordings and copyright infringement damages over those rights.