Rick James' Estate Sues Universal Music Group for Higher Royalty Rate

Other artists can join class action suit in the wake of legal precedent set by Eminem court victory

April 4, 2011 4:10 PM ET
Rick James' Estate Sues Universal Music Group for Higher Royalty Rate
George Rose/Getty

The estate of funk legend Rick James has filed a class action lawsuit against Universal Music Group claiming that it is owed 50 percent of all digital sales of his songs as tracks, albums and ringtones. The suit comes in the aftermath of a recent legal victory on behalf of Eminem, which set a legal precedent determining that digital sales qualify as licenses, not traditional sales, thus entitling copyright holders to half of all revenue rather than around 12 percent.

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The fact that this is a class action suit is very bad news for UMG, since it means that any other artist in its catalog with a similar claim can join in the suit for an even larger potential payday (though none have done so yet). It's likely that most artists who recorded for the label before the late Nineties has a contract without any stipulation regarding digital sales, which could entitle them to the drastically increased revenue share.

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