In November, a courtroom drama that drew dozens of placard-waving ‘N Sync fans to the steps of an Orlando federal courthouse cleared the way for Jive Records to become one of the biggest labels in pop music. A first-round legal victory gave Jive the right to release ‘N Sync’s second album, No Strings Attached, in March. The label already has the Backstreet Boys and Britney Spears, who, along with ‘N Sync, sold a combined 20 million albums in 1999.
The move comes after ‘N Sync jumped ship from Trans Continental – the same company the Backstreet Boys accused of withholding their earnings – and declared themselves free agents. And the switch may give Jive’s founder, Clive Calder – a renegade businessman from South Africa who was willing to take on ‘N Sync’s legal tangle when no other label would touch it – quite possibly the richest prize in pop. “He’s a maverick,” says one music-business attorney familiar with the case. “He decided, ‘Fuck it, I’m taking my shot here.’ “
‘N Sync’s high-profile defection to Jive set off one of the record industry’s most contentious courtroom battles in years. The high-stakes standoff began last spring when ‘N Sync broke off renegotiations with their record company, Trans Con (distributed by BMG Entertainment). As is customary, ‘N Sync were seeking to sweeten their deal to reflect their superstar status. “We tried everything humanly possible to reconcile the situation,” says ‘N Sync’s lawyer Adam Ritholz. “But we were just too far apart.”
Convinced that the Trans Continental contracts signed in 1996 had been repeatedly breached by the company, ‘N Sync terminated the deals and were promptly signed by Jive, stunning both BMG and Trans Con’s Lou Pearlman – the hitmaker who helped create and market ‘N Sync as well as BSB, LFO, Five and C-Note. When Jive told retailers to expect a new ‘N Sync album in early 2000 – the same ‘N Sync album that BMG was banking on releasing – Trans Con and BMG filed a $150 million breach-of-contract suit and asked a judge for an injunction to stop Jive.
‘N Sync answered with their own court papers, in which singer Joshua Chasez calls Pearlman “an unscrupulous, greedy and sophisticated businessman who posed as an unselfish, loving father figure and took advantage of our trust.”
“That’s the lawyers talking,” Pearlman responds, adding that none of the ‘N Sync members would ever say such things to his face. “And if they did, shame on them. I made them multimillionaires.”
At the hearing, Judge Anne C. Conway refused to grant BMG and Trans Con an injunction. “The defendants have raised serious questions . . . about Mr. Pearlman and his dealings,” she said. As of early December, Trans Con and BMG were still trying to find a way to retain ‘N Sync. But a financial settlement, in which Jive would compensate the band’s former label and become ‘N Sync’s new home, seemed more likely.
This story is from the January 20th, 2000 issue of Rolling Stone.