According to an exclusive report from Rolling Stone, Native Tongue family favorites Black Sheep have filed a large class action lawsuit against Universal Music Group over unpaid royalties related to a side deal that the global music giant allegedly made with Spotify.
Black Sheep, which is Dres and Mista Lawnge, says that UMG owes them and their entire artist roster over $750 million for breach of contract after allegedly accepting cash and company stock from Spotify in exchange for music from their artists. Black Sheep claims that UMG only counted the money when distributing royalty payments.
Black Sheep also alleges in the lawsuit that the “previously undisclosed” deal violated their deal with Polygram, a subsidiary of Universal, going back to when they signed their original record deal. The lawsuit says that Universal owes 50 percent of all net receipts related to the duo’s music.
“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,” the lawsuit states.
“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 continues, “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.”
A Universal spokesperson called the allegations “fake and absurd” in a statement 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,” the statement read. “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.”
Spotify did not respond to comment.
Universal owns a $1.7 billion stake in Spotify, according to a 2021 Universal report, and Black Sheep’s suit claims that a “substantial portion” originates from the shares Universal and its subsidiaries acquired in or around 2008.