Much has been made of Eminem’s former production company FBT Productions and how their groundbreaking lawsuit against the Universal Music Group changed a key distinction of how digital sales are tallied. Arguing that digital sales should be considered a license and not a simple sale – which would change the smaller royalty payout to a 50 percent licensing fee – the U.S. 9th Circuit Court of Appeals in San Francisco awarded FBT a victory against the major label in 2009. An appeal by UMG raised in the Supreme Court was rendered unsuccessful last March and the appeals court ruling was upheld. But while millions of dollars could have been due to Eminem, a key point of the lawsuit cannot be overlooked.
A recent piece from Forbes magazine on the suit quoted a source that Eminem won’t reap any financial benefit of the lawsuit as the rapper declined to join FBT and their stand against Universal. The Forbes piece further speculated that Eminem may have declined to join the suit as Universal is also the label that houses his employer Interscope Records. As the case continues in California to further tabulate damages and payouts, the only way Eminem would see any of the heavy amounts of cash is to negotiate a settlement with the label or draw his own suit.
Universal Music Group handled this slightly crushing blow with usual corporate grace, and even issued a statement saying that this lawsuit should not be seen as some groundswell of artists coming after large labels with opens hands looking for a brand new payout. “The case has always been about one agreement with very unique language. As it has been made clear during this case, the ruling has no bearing on any other recording agreement and does not create any legal precedent.”
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