Enrique Iglesias is accusing Universal Music Group of “systematically underpaying” his streaming royalties in a new lawsuit filed Wednesday.
The Latin superstar filed a breach-of-contract complaint in Miami federal court that alleges he’s been shortchanged millions of dollars.
The suit claims that Universal is paying Iglesias far less than the 50 per cent royalty rate required under his contract for streamed music. Iglesias says Universal is paying him a rate based on sales of physical music such as compact discs even though there are far fewer overhead costs.
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According to the suit, the El Baño singer sought to look over Universal’s bookkeeping after receiving what the suit describes as a “small fraction” of his 50 per cent royalty rate for streaming.
“Universal has been systematically underpaying Iglesias’ streaming royalties by calculating those royalties at a small fraction of the contractually-required fifty per cent (50%) royalty rate,” states the new complaint. “Universal’s inaccurate financial statements characterize Iglesias’ account as being un-recouped millions of dollars even though Iglesias has generated sales of a magnitude rarely attained in the music industry.”
According to the complaint, Iglesias had 27 chart-toppers under his Universal contract and has sold over 100 million albums and generated billions of streams. The Subeme La Radio singer asserts that Universal pays the lower rate that is based on the sale of physical records.
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The Bailando singer is represented by lawyer James Sammataro, who says that streaming shouldn’t be treated the same way as physical sales because they don’t incur the same sort of attendant costs.
“Few business relationships in the history of the music industry have achieved the commercial success attained by Enrique Iglesias and Universal: 100 million albums sold, billions of streams, and repeat appearances at the top of the Billboard charts,” Iglesias’ lawyer said in a statement. “Despite this record-breaking success, Universal has wrongly insisted that artists like Enrique be paid for streams in the same manner as they are paid for physical records despite the fact that none of the attendant costs (production, distribution, inventory, losses) actually exist in the digital world. This is not what Enrique’s contract, or the contracts of many other artists, call for.”
“Artists, producers and songwriters should benefit from the reduced costs of streaming, not have their musical works spin unwarranted profits,” the statement continued. “Universal has long ignored, and is now attempting to distort, the clear terms of its artist agreements so that it alone reaps the savings from digital streams. After lengthy efforts to have Universal honour its contractual obligations, Enrique’s team regrettably concluded that he had no choice but to file this lawsuit.”
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The complaint points out that, “Up until approximately 2016, Interscope properly recognized and credited Iglesias’ streaming royalties at 50 per cent. However, upon receiving a directive from Universal, Interscope — without consulting or otherwise notifying Iglesias — began crediting streams at the incorrect, lower record royalty rate.”
It notes that, “Years earlier, Universal made a similar decision to pay a reduced royalty for digital downloads, and that decision prompted a series of lawsuits and an $11.5-million class-action settlement.”
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Iglesias’ lawsuit seeks unspecified damages from Universal, which didn’t immediately respond to an email seeking comment.
Iglesias has sold nearly 160 million albums worldwide and appeared in numerous movies and television shows. He lives in Miami Beach with his longtime girlfriend, tennis star Anna Kournikova, and their newborn twins.
—With files from the Associated Press
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