Cut the sweet harmonies: The members of 'N Sync are singing a new tune – in court. In a contentious legal maneuver, the boys in the band shocked their label, Trans Continental (founded by 'N Sync and Backstreet Boys guru Louis Pearlman), when they announced in September that they had signed to Jive Records, the home of Backstreet Boys.
Also stunned and furious were executives at RCA Records, which, in conjunction with the smaller Trans Continental, has been marketing, promoting and distributing 'N Sync in America, where the group has sold more than 7 million albums. Claiming that 'N Sync still owed seven more records on their original contract, the two labels teamed up in October to file a $150 million breach-of-contract lawsuit against the pop group, demanding that 'N Sync be prevented from signing with Jive or performing under the name 'N Sync and that the band return master recordings for an upcoming album. (RCA had been banking on the record as a big holiday seller; now it's on Jive's release schedule for early 2000.)
The public blowup stems from failed renegotiation talks between 'N Sync and Pearlman, which stretched out through last spring and summer. Like Backstreet Boys before them, 'N Sync were unhappy with the money they were earning from their multiplatinum successes. "They wanted more money, and they were going to get more," says Trans Continental lawyer Michael Friedman. "But they pushed it too far." A source inside the group's camp tells a different tale: "We tried to do everything humanly possible to reconcile the situation. Pearlman didn't take the group seriously."
Artists and labels often part ways under bitter terms, but it's almost unheard of for an act to sign with one label while its existing contract is still in dispute. "It's the most extreme position you can take," says one neutral music-business attorney, referring to 'N Sync's unexpected jump to Jive. "It's like the Boston Red Sox signing [Yankee] Bernie Williams, and the Yankees insisting Bernie's still on their team. It's a very drastic action."
Fraying nerves even further is the fact that RCA's parent, BMG, distributes Jive's records in America and owns twenty percent of the label. Meanwhile, Pearlman worked closely with 'N Sync's manager, Johnny Wright, in putting the group together. "If it turns out Johnny was instrumental in these moves," says Friedman, "that would be very disappointing to Lou." (Wright could not be reached for comment.)
Completing the cycle of litigation was news that Backstreet Boys were upset at Jive for signing their pop competitors. The Boys, who themselves left Trans Continental for Jive, threw a public tantrum and may end up in court with Jive as well – although some observers suggest that the tantrum may simply be a plot to wring more money out of Jive. For now, Jive's spokesperson insists, "Backstreet Boys are signed to a long-term exclusive recording agreement to Jive Records."
This story is from the November 25th, 1999 issue of Rolling Stone.