Nu-rock band Limp Bizkit, led by frontman Fred Durst, is taking Universal Music Group to court over what they say are unpaid loyalties. The band is seeking $200 million in damages and unpaid royalties, which they say UMG has avoided paying through alleged "fraudulent" accounting practices. They also say these practices are "systemic" in nature and not limited to just the label's practices with Limp Bizkit. Attorneys representing Durst claim in the lawsuit that the Bizkit auteur has "not seen a dime in royalties" during his entire life as a successful rock star.
Universal allegedly claimed that Limp Bizkit had not been paid royalties because it had not recouped the roughly $43 million the label paid the band in the form of advances, production, and marketing costs over the years.
That's a rather astounding claim considering the fact that Limp Bizkit has sold 45 million albums since the late 1990s and has recently become very popular on streaming platforms. Bizkit has generated 450 million streams all-time and will end 2024 having generated close to 800 million streams.
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How does a label like Universal get out of paying royalties it contractually agreed to pay its artists? According to the suit, it's by way of a "fraudulent," "systemic" policy that the executive side of the business "deliberately designed" in order to "keep those profits for itself" and out of the mailboxes of songwriters, performers, and producers.
The suit goes on:
"UMG's creation of such a system, while holding itself out as a company that prides itself on investing in and protecting its artists, makes plaintiffs' discovery of UMG's scheme all the more appalling and unsettling."
In an allegation that Billboard called "stunning," the lawsuit says that despite selling millions of copies and millions of streams on platforms like Spotify, the members of Limp Bizkit "never received any royalties from UMG," a situation made even more egregious by the band's enduring popularity:
"Despite this tremendous 'come back,' the band had still not been paid a single cent by UMG in any royalties until taking action against UMG, leading one to ask how on earth that could possibly be true."
Durst says he only became aware of the situation in April of this year when his new representation were "shocked" to find out he wasn't getting any royalty checks from UMG. But he had been told by the label that he would only get paid when the band hit "recoupment," which means when the royalties they owe surpass the money they made up front, a common practice in the music business. As the suit puts it:
"Durst explained that he had been informed by UMG that he had not received any royalty statements because UMG told him over the years that it was not required to provide them since his account was still so far from recoupment…Durst's representatives, suspicious that UMG was wrongfully claiming Plaintiffs' accounts were unrecouped, suggested investigating further."
At that point, UMG said that the band's accounts contained more than $1 million in royalties that they were not told about or paid, a mistake that the band's attorneys say wasn't really a mistake at all but rather a willful scheme to avoid paying out royalties and that it was far from the first and only time it had been pulled:
"UMG's failure to issue royalty statements in particular from 1997-2004 — the height of the band's fame and during periods in which they made record-breaking sales — with respect to its most popular albums suggests that UMG was intentionally concealing the true amount of sales, and therefore royalties, due and owing to Limp Bizkit in order to unfairly keep those profits for itself."
The suit even goes so far as to say the whole premise of Limp Bizkit being "unrecouped" doesn't make any financial sense when you look at the numbers:
"Given that Limp Bizkit's first three albums had already sold several million copies by the early 2000s, the recording funds and costs should have been quickly recouped, and UMG should have started paying royalties on those albums right away — not over twenty years later."
UMG had previously told Durst's lawyers that the band was paid approximately $43 million in "recoupable advances" going back to their first big break and subsequent albums and that that revenue threshold was only recently crossed. They paid out that previously mentioned $1.03 million to the band and another $2.3 million to Durst's own label, Flawless Records, but the suit says that's only a drop in the bucket compared to what they are actually owed:
"Given the vast amounts of money collected by UMG in relation to sales of Limp Bizkit's and Flawless Records' albums over the years … UMG is liable to plaintiffs for tens of millions of dollars in copyright infringement, if not more…Indeed, Plaintiffs allege that the amounts owed to them by UMG following the rescission of these agreements will easily surpass $200 million."
The band is looking for that $200 million in court, not only in unpaid royalties but in damages for violating their contract. They are also seeking to get Limp Bizkit's copyrights and master recordings back from Universal in view of these alleged contract violations.
UMG has yet to respond publicly to the suit, but it could end up being a historic case in the music business and for the cause of artists earning royalties on their work.
