Universal Music Group (UMG), on behalf of UMG Recordings Inc. and Capitol Records LLC, and plaintiffs’ attorneys representing clients in class action lawsuits regarding digital download royalties today submitted a settlement for preliminary court approval.
In the lawsuit, the plaintiffs (including the estate of Rick James, Chuck D of Public Enemy, and others) alleged that UMG failed to pay proper royalties to certain artists when consumers bought MP3 files from digital music retailers.
Under the proposed terms, UMG will contribute a maximum of $11.5 million to supplement payments to class members for past digital download activity, cover attorneys’ fees and administrative costs, and also increase digital download royalties by approximately 10% going forward to class members who submit a claim. Class members can learn more about the settlement, including how to submit claims, at www.umgsettlement.com.
In the settlement agreement, UMG specifically denies the plaintiffs’ claims, and states that it agreed to settle the claims rather than continue to litigate the matter to avoid the associated legal expenses.
In a statement, UMG commented, “Although we are confident we appropriately paid royalties on digital downloads and adhered to the terms of contracts, we are pleased to amicably resolve this matter and avoid continued legal costs.”
Len Simon, one of the lead plaintiffs’ attorneys, said, “This settlement is a fair resolution of this controversy over how to compensate artists for their valuable work in a new medium which we believe was not contemplated by their contracts, many drafted in the 1970s or 1980s. And it compensates these artists now, rather than after additional years of litigation and uncertainty.”
About Universal Music Group
Universal Music Group is the global music leader, with wholly owned operations in 60 territories. Its businesses also include Universal Music Publishing Group, one of the industry’s premier music publishing operations worldwide.
Universal Music Group’s labels include A&M Records, Angel, Astralwerks, Blue Note Records, Capitol Christian Music Group, Capitol Records, Capitol Records Nashville, Caroline, Decca, Def Jam Recordings, Deutsche Grammophon, Disa, Emarcy, EMI Records Nashville, Fonovisa, Geffen Records, Harvest, Interscope Records, Island Records, Machete Music, Manhattan, MCA Nashville, Mercury Nashville, Mercury Records, Motown Records, Polydor Records, Republic Records, Universal Music Latino, Verve Music Group, Virgin Records, Virgin EMI Records, as well as a multitude of record labels owned or distributed by its record company subsidiaries around the world. The Universal Music Group owns the most extensive catalogue of music in the industry, which includes the last 100 years of the world’s most popular artists and their recordings. UMG’s catalogue is marketed through two distinct divisions, Universal Music Enterprises (in the U.S.) and Universal Strategic Marketing (outside the U.S.). Universal Music Group also includes Global Digital Business, its new media and technologies division and Bravado, its merchandising company.
Universal Music Group is a fully owned subsidiary of Vivendi.