Eminem's former producers lose royalty lawsuit

March 6, 2009 4:46:23 PM PST
Rapper Eminem's former production company, F.B.T. Productions LLC, on Friday lost its lawsuit against Universal Music Group that sought to claim a greater share of the revenue from digital downloads of the artist's works between 2003 and 2008. F.B.T.'s lawyer, Richard Busch, said a federal jury voted unanimously in favor of the defendants, which included Dr. Dre's record label, Aftermath Records, and its distributor, UMG's Interscope Records. Universal is a unit of France's Vivendi SA.

"We're very disappointed by the decision," Busch said afterward, adding that his clients were considering all options including appeal.

F.B.T. sought to have digital sales by such services as Apple Inc.'s iTunes music store be treated under a master recording licensing deal between Universal and Apple, in which case F.B.T. would be entitled to its share of a 50-50 split with Universal. Part of that 50 percent would have been split with Eminem.

Instead, the record label had paid F.B.T. and Eminem a total of 12 percent of the sales, the rate agreed upon for sales of physical albums.

Universal lawyers had argued there was no difference between a digital album sale and a physical album sale and that its royalty rate was the correct one.

The difference between the rates would have meant about $1.3 million more for F.B.T. and could have opened the door to Eminem, whose real name is Marshall B. Mathers III, to suing for a larger share of the sales himself, Busch said.

Universal spokesman Peter Lofrumento said the recording company, the world's largest, was "pleased with the jury's verdict."

Universal had earlier acknowledged an accounting mistake and agreed to pay about $159,000 to F.B.T., which the jury included in its verdict.

F.B.T. Productions is owned by brothers Mark and Jeff Bass, who discovered Eminem and signed him to an exclusive recording deal in 1995 before he signed with Aftermath in 1998. The Bass brothers shared a Grammy with Eminem for his breakout album "The Slim Shady LP" in 1999.

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