Black Sheep claim Universal illegally withheld $750M in royalties

Hip hop duo, Black Sheep are suing Universal Music Group, under claims of “unlawfully retained” $750M in royalties from their artists.

Black Sheep have filed a class action lawsuit against Universal Music Group, alleging the label owes artists in its roster over $750 million in royalties, which it “unlawfully retained.” Additionally, the group claim that Universal entered into a “sweetheart” deal with streaming giant, Spotify, which left thousands of artists “shortchanged.” 

Delving into the specifics of this deal, the 1990s hip hop duo, comprising Andres “Dres” Vargas Titus and William “Mista Lawnge” McLean, allege that the label gave Spotify music from their artists, in exchange for cash and stock in the company.

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As per Rolling Stone, the lawsuit filed by Black Sheep declares that the “previously undisclosed” deal violated the contract they had with former Universal offshoot label, Polygram, back in the ’90s. In consequence, Universal would be required to pay 50 percent of all net receipts linked to misuise of Black Sheep’s music.

As stated in the legal documentation, “In the mid-2000s, Universal struck an undisclosed, sweetheart deal with Spotify whereby Universal agreed to accept substantially lower royalty payments on artists’ behalf in exchange for equity stake in Spotify – then a fledgling streaming service.”

Credit: Reuters / Dado Ruvic / Illustration / File Photo

It continues: “Yet rather than distribute to artists their 50 percent of Spotify stock or pay artists their true and accurate royalty payments, for years Universal shortchanged artists and deprived plaintiffs and class members of the full royalty payments they were owed under Universal’s contract.”

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

Credit: Getty Images / Al Pereira

While Spotify is yet to make a comment on their alleged part in this legal injustice, a spokesperson for Universal Music Group has referred to the allegations as “patently false and absurd,” adding that the label has “a well-established track record of fighting for artist compensation.”

We’ll be keeping our eyes peeled for updates on this unfolding matter.