Chuck D Files Class Action Lawsuit Over Digital Royalties

November 16th, 2011
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Chuck D, the frontman for the Long Island rap group Public Enemy has filed a class-action lawsuit against the group’s label Universal Music Group over royalties disputes.  The suit claims that Universal has not fulfilled contractual agreements in regards to digital song downloads and ringtones.

According to the suit, Universal owes it’s musicians and artists “hundreds of millions of dollars in royalties,” however the Public Enemy frontman is not the only person to file suit against Universal over discrepancies.  The estate for the late, “Super Freak,” singer Rick James has also filed suit against Universal alleging that the music mogul has treated licensing profits as resale profits.

For the class action suit filed earlier this month at a U.S. District Court in Northern California, Chuck D claims that Universal has shorted it’s artists substantially in regards to digital sales while also treating those sales as physical products.

The royalties discrepancy which Chuck D claims is two fold with a twist.

Out of 1,000 songs downloaded digitally artists and producers should receive $315.85, or 50 percent of net receipt amounts.  Yet they are only being paid $80.33.

Out of 1,000 ringtones downloaded the artists and producers are entitled to $660 rather than the $49.89 which is yielded by Universal’s accounting methods.

The twist regards certain aspects of royalties when considering a product which is sold physically.  A tangible record requires things which digital downloads (whether songs or ringtones) don’t, such as; the formatted material whether vinyl cassette or CD, packaging, with a containing case or sleeve.  Those aspects warrant a record company to deduct certain amounts of royalties paid to the artist based upon a unit of sales.

In the case of digital format songs or ringtones which customers download, those aspects of transaction are void since they are not requisite.

Chuck D claims in the suit that Universal Music Group has treated these digital sales as physical sales leading to the reduced royalties rate which does not meet the contractual agreement of 50 percent net receipts.

A spokesperson for Universal Music Group issued the following response to The Wrap:

This complaint suffers from serious flaws and weaknesses,  not the least of which is that the claims asserted are not appropriate for class treatment.

Claiming a breach of contract on behalf of Universal, Chuck D has requested a jury trial.


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By Patrick Cowles Posted in News ,

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Photos: Public Enemy Live at Club Nokia Los Angeles