Hip-Hop Group Black Sheep Files $750M Lawsuit Against Universal Music Group Over Royalties

Bronx hip-hop group Black Sheep is taking Universal Music Group to court saying that the company “has unlawfully retained approximately $750 million in royalties that should have been paid to plaintiffs.”

According to Rolling Stone, the plaintiffs, Andres “Dres“ Titus and William “Mista Lawnge” McLean, of Black Sheep have sued Universal Music Group, in a class action lawsuit filed on behalf of the artists alleging breach of contracts when they inked a “sweetheart” deal with the streaming platform, Spotify.

The group members claim the label accepted cash and company stock from Spotify so the streaming company would gain access to Universal’s stable of artists. They also allege that UMG then only counted the cash when it distributed royalty payments.

The lawsuit states that the “previously undisclosed” agreement violated the original contract that the duo signed in the early-1990s with Polygram which is owned by Universal Music Group.

In that contractual agreement, Universal is required to pay 50% of all net receipts connected to the exploitation of the works of Black Sheep.

“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. 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 lawsuit claims.

Universal Music Group did issue a response to the lawsuit to Rolling Stone.

“Universal Music Group’s innovative leadership has led to the renewed growth of the music ecosystem to the benefit of recording artists, songwriters and creators around the world,” a UMG spokesperson wrote in a written statement to Rolling Stone. “UMG has a well-established track record of fighting for artist compensation and the claim that it would take equity at the expense of artist compensation is patently false and absurd. Given that this is pending litigation, we cannot comment on all aspects of the complaint.”

The law firm representing the group, Wittels McInturff Palikovic, wrote, “As a result of its continuing contractual breaches, Universal has unlawfully retained approximately $750 million in royalties that should have been paid to plaintiffs and the class.”