Limp Bizkit are suing Universal Music Group (UMG) for what they allege are millions of pounds of unpaid royalties that they have “concealed” from the band, and-potentially-hundreds of other artists.
The action, taken out by the band’s founder Fred Durst and his label Flawless Records claims that UMG have paid “not a single cent” in royalties, despite the band enjoying a significant resurgence in popularity in recent years.
Attorneys for Durst and the band even suggest that a pre-trial discovery process – in which both sides of a case exchange information – will “show that potentially hundreds of other artists have likewise been wrongfully defrauded regarding their royalties, showing that the system was intentionally designed to commit fraud on Plaintiffs and other artists”.
If fraud on that scale is uncovered it could be potentially catastrophic for UMG. However, some observers are sceptical about Durst’s claims of deliberate fraud.
“My gut tells me that this isn’t a systematic scheme to withhold royalties,” said Jay Gilbert, a music industry consultant and former executive at UMG and Warner Music Group . It’s more of an accounting issue that’s blown up. It sounded pretty damning and pretty heavy-handed, but in my experience, I think it’s something less dramatic.”
This lawsuit is “the nuclear option”, added Mark Tavern, who previously worked at record companies including UMG and Sony Music. “I think it’s designed to force a settlement, and make it happen quickly.”
“It’s a bit over the top,” said Tavern, who now lectures on the music industry at the University of New Haven. “It can probably be easily explained by bureaucracy, or incompetence.”
Durst claims he was told by UMG that he had not received any royalty statements because his account was still some way from recoupment, with executives at the firm suggesting it had paid the band some $43m in recoupable advances over the years, according to the suit.
According to Durst’s attorneys, UMG eventually released $1.03million to the band, and $2.3million to Durst’s label Flawless Records. However, they claim that they are owed a much higher sum. In addition to this, the lawsuit is also seeking to void Limp Bizkit’s contract with Universal and give the band back the copyrights to their catalogue. Their lawyers are also seeking copyright infringement damages.
Durst and co are seeking a jury trail but Gilbert is doubtful it will get that far. “I think cooler heads will prevail,” he said, suggesting an out of court settlement is probably the most likely outcome. “This thing will be resolved,” he said. “I think it’s going to go away.”
UMG has not yet responded to the lawsuit.
