Supreme Court Won’t Review Eminem/UMG Royalty Dispute

The U.S. Supreme Court ruled this afternoon (3/21) that it will not hear the appeal from Universal Music Group in a digital royalty dispute between Eminem’s former production company and the label.

Last year the 9th U.S. Circuit Court of Appeals ruled in favor of Eminem’s former production company, who filed the suit claiming they were underpaid for digital sales. UMG then appealed to the Supreme Court.

The suit claims that the rapper’s music on iTunes was being licensed, not sold, and therefore was subject to a higher royalty percentage rate. According to Eminem’s contract, he is owed a 12% royalty on “records sold” and a 50% rate on licensing agreements. He was paid for iTunes sales under the 12% rate.

The 9th Circuit U.S. Court of Appeals ruled that iTunes downloads aren’t sales because the label is licensing use of the master recordings to iTunes, which then sells the digital downloads without further involvement from the label. This means he is owed 50% of money made from paid digital downloads.

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Sarah Skates has worked in the music business for more than a decade and is a longtime contributor to MusicRow.

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