Band alleges that Universal Music Group owes it more than $200m after concealing royalties
Callum JonesSun 13 Oct 2024 06.00 EDTShareOne of the world’s largest music companies has been accused of depriving “potentially hundreds” of artists and bands of their royalties by the 90s nu-metal band Limp Bizkit.
Three decades after it rose to prominence, the band and its founder, Fred Durst, alleges that Universal Music Group (UMG) owes more than $200m after fraudulently concealing royalties from the band.
In a lawsuit filed in California, attorneys representing Durst, Limp Bizkit and Flawless Records accused UMG of using software “deliberately designed to conceal artists’ (including Plaintiffs’) royalties” so it can pocket the profits.
UMG is one of the most powerful forces in the global music industry, with a roster spanning from Taylor Swift and Neil Diamond to Dr Dre and Renee Rapp. The company did not respond to multiple invitations to comment.
Limp Bizkit claims it was not paid “a single cent by UMG in any royalties” until taking legal action, despite a “tremendous” resurgence in popularity in recent years, with its songs played hundreds of millions of times on streaming platforms in 2024 alone.
The lawsuit, filed in California federal court, claims that many more bands and acts might also be getting shortchanged. Attorneys for Durst, Limp Bizkit and Flawless Records go so far as to suggest that a pre-trial discovery process – in which both sides of a case exchange information – will “show that potentially hundreds of other artists have likewise been wrongfully defrauded regarding their royalties, showing that the system was intentionally designed to commit fraud on Plaintiffs and other artists”.
Break stuff! How Limp Bizkit, rioting fans and a huge candle handout led to a music festival fiascoRead more“These accusations are massive,” said Jay Gilbert, a music industry consultant and former executive at UMG and Warner Music Group. He is skeptical.
“My gut tells me that this isn’t a systematic scheme to withhold royalties. It’s more of an accounting issue that’s blown up,” Gilbert said. “It sounded pretty damning and pretty heavy-handed, but in my experience, I think it’s something less dramatic.”
This lawsuit was “the nuclear option”, added Mark Tavern, who previously worked at record companies including UMG and Sony Music. “I think it’s designed to force a settlement, and make it happen quickly.”
“It’s a bit over the top,” said Tavern, who now lectures on the music industry at the University of New Haven. “It can probably be easily explained by bureaucracy, or incompetence,” or the sheer volume of payments processed by a music firm as large as UMG, he said.
Durst claims he was told by UMG that he had not received any royalty statements because his account was still so far from recoupment, with executives at the firm suggesting it had paid Limp Bizkit some $43m in advances over the years, according to the lawsuit.
When representatives of Durst and Limp Bizkit gained access to UMG’s portal for royalty statements in April, however, they claim to have noticed balances that indicated it owed more than $1m.
In August, UMG paid just over $1m to Limp Bizkit and $2.3m to Flawless Records, according to the lawsuit, which says executives blamed the failure to pay sooner on an error with new software.
Questions over royalty payments arise “all the time”, according to Gilbert, but rarely explode into the open. “This sort of dirty laundry is not aired commonly,” he said, with issues typically resolved through audits “behind the scenes”.
The global music industry has been rapidly transformed over recent decades, first by the rise of downloads, and then by streaming. Finding and listening to songs has never been easier, thanks to hundreds of millions of tracks that stack the libraries of platforms like Spotify and Apple Music.
Take Break Stuff by Limp Bizkit. It was first released in May 2000, but you might hear it in passing while watching TV, scrolling through social media, or playing a video game. Gone are the days when you would visit a local record store, go through the racks, find the album, and ultimately listen back to the song. It’s just a few taps away.
chart shows spotify’s monthly active listeners rising rapidly between about 2015 and 2023Even Limp Bizkit’s attorneys acknowledged that the band – which split up in 2006, and reformed in 2009 – had a “relatively quiet period” in the early 2010s. In the lawsuit, however, they claim that interest in the band began to increase “exponentially” around 2017, leading it to sell out arenas and headline festivals.
“There is a big pop-punk revival going on,” observed Tavern. “The current generation [of fans] is looking back 20 or 25 years.”
Such “heritage” acts and artists, as they are referred to by music industry executives, are prized by record labels.
UMG sought Durst’s approval to reissue Limp Bizkit’s 2000 album Chocolate Starfish and the Hot Dog Flavored Water on vinyl last year, according to the lawsuit, and “repeatedly asked” him to get involved with an anniversary rerelease of Significant Other, another of its albums. To Durst, it seemed like a “money grab”.
The complaint alleges that the plaintiffs are still owed much more than they have been paid. Durst, Limp Bizkit and Flawless Records are demanding a jury trial. Their case is already making waves.
“Everyone is talking about it,” observed Tavern, who noted the complicated nature of calculating music royalties in the streaming era had led to widespread confusion – and, sometimes, suspicion of the industry’s dominant firms.
“The way the money gets paid is totally different now, and much more convoluted,” he said. “You can point to 450 million streams, but that is not the same as 450 million records.”
Gilbert said: “I think cooler heads will prevail,” suggesting that attorneys for either side would probably meet privately to examine the facts. “This thing will be resolved,” he said. “I think it’s going to go away.”
