NEW YORK (CelebrityAccess MediaWire) — A recent ruling in the case of FBT Productions v Interscope may have paved the way for numerous artists to seek what may amount to billions in unpaid royalties from major labels.
FBT Productions, a company associated with Eminem's early career, successfully sued Universal's Interscope for a bigger share of royalties from Eminem's early catalog, based on contracts that predate the Internet era. Interscope had been paying Em the physical product rate (typically 10-15% and 12% in Eminem's case) instead of the correct licensing rate, which in older contracts, is typically 50%.
While most post-iTunes contracts with record labels stipulate that music downloads are covered under the lesser royalty rate, there are many artists with catalog covered by older, pre-internet contracts in which downloads would be covered under the licensing rate, prompting these artists to seek belated royalty payments.
And while Universal was quick to state that the ruling in the FTB/Eminem case did not establish a precedent, that didn't stop the estate of Rick James from filing a class action lawsuit against Universal, requesting that the ruling in the FTB case be made applicable to all artists with similar recording contracts.
Just how much exposure the labels have in this is unclear, but the Future of Music Coalition has estimated that unpaid royalties from just iTunes might top $2 billion. – CelebrityAccess Staff Writers