Enrique Iglesias Sues Universal International Over Streaming Royalties

(CN) – Grammy-award winning Latin pop singer Enrique Iglesias is suing his former record label, Universal International Music, claiming it has systematically underpaid him royalties from streamed music.

Enrique Iglesias is internationally known among both English- and Spanish-speaking audiences, and since the beginning of his career in the 1990s he’s released 10 music albums that have collectively sold over one hundred million copies.

In a federal complaint filed in Miami on Wednesday, Iglesias says Universal has been calculating his streaming royalties at a fraction of the 50 percent royalty rate that had been agreed to in his contract.

Iglesias, who is represented by James Sammataro, of Stroock & Stroock & Lavan in Miami, claims that when he asked to review Universal’s books in March 2017, the company refused.

“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,” the complaint says.

Iglesias signed a multi-album deal with Universal and Interscope Records in 1999, an agreement under which Universal handled his Spanish-language releases, and Interscope would take care of his English-language recordings.

According to the complaint, the agreements with Universal and Interscope required Iglesias to deliver a minimum of two Spanish-language and two English-language albums, and three new singles for a greatest hits album with each company.

“In exchange for his commitment to record and deliver the musical works, Iglesias received from Universal recording budgets, recoupable advances, and the right to receive royalty payments for the monetization of his musical works,” the complaint says.

The complaint alleges that under the contract the amount of the royalty he was to be paid depended on the geographic territory in which Iglesias’ songs were sold, and the way in which they were sold.

The agreement with Universal did not specify a royalty percentage for streamed music — a market that didn’t exist at the time — however, it authorized a 50 percent royalty rate for any type of use not “specifically covered,” the complaint says.

As a result of Iglesias’ success, Interscope and Universal made an amended agreement in 2010 that required him to record more albums with them, but the royalty rate for music uses stayed the same.

However, according to the complaint Universal credited online streams at an incorrect “album royalty” rate, which states that downloads were to be paid at the same rate as album sales.

“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,” Iglesias’ attorney, James Sammataro, said in an email to Courthouse News.

The complaint claims that Universal is refusing to correct its mistakes, and that it’s still collecting income from Iglesias’ musical works due to the misreporting of royalties.

Iglesias’ relationship with Universal end in 2015. He then signed Sony Music as his new record label.

Enrique Iglesias is seeking compensatory damages on claims of breach of contract.

Universal did not respond to an email request for comment on the litigation.

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