Lil Wayne Sues Universal Music Over Profits From Discovered Talent

Lil Wayne claims he's owed tens of millions of dollars for discovering and nurturing successful recording artists Drake, Nicki Minaj and Tyga.
Lil Wayne, Drake  Getty Images

Universal Music Group is paying itself instead of shelling out royalties it owes Lil Wayne, according to a federal lawsuit filed by the rapper-producer's attorneys Monday in California.

Dwayne Carter Jr., known as Lil Wayne, is suing UMG and SoundExchange claiming he's been shorted millions from his work discovering and nurturing artists like Drake, Nicki Minaj and Tyga. 

Carter claims Universal has diverted tens of millions of dollars of his profits to repay itself for the $100 million it advanced to Cash Money Records Inc.

"With Universal’s knowledge of Lil Wayne’s rights to partial ownership and profits from those artists, Universal and Cash Money entered into a series of agreements which, among other things, diverted Lil Wayne’s substantial profits to repay debts of Cash Money," states the complaint. "As a result, 100% of the profits that should have been paid to Lil Wayne as a result of his ownership of Drake, Nicki Minaj and Tyga records have been seized by Universal to repay debts that were neither incurred by nor were the obligations of Lil Wayne."

Carter's Young Money Label is a joint venture with Universal's Cash Money Records designed to manufacture, distribute, promote and exploit performances of new recording artists discovered by Carter and signed to the label, according to the complaint.

He claims their 2003 agreement states the label's profits "would be divided 51%-49% between Cash Money and Carter, and ownership of all the Young Money Label property, (e.g., master recordings, copyrights, intellectual property, good will) similarly would be owned 51%-49% between Cash Money and Carter, respectively."

After multiple extensions, the term expired June 4, 2015, which puts Drake's upcoming album in the crosshairs. 

“Universal should be grateful and respectful to Lil Wayne for the millions of dollars in distribution fees and profits they have earned on the artists he brought to the company, instead of seizing all of his profits on those artists in a desperate attempt to recoup the tens of millions of dollars they are owed by Cash Money Records,” Carter's attorney Howard E. King of King Holmes Paterno & Soriano said Monday in a statement.

In a statement to The Hollywood Reporter, a spokesman for Universal Music Group says the claims are entirely without merit.

"It should be no surprise that we learned of the lawyer's complaint through the news media," he writes. "We don't intend to dignify this with further public comment except to say that we will vigorously contest it and that the merits of our case will carry the day.”

SoundExchange, the nonprofit that collects and distributes digital performance royalties on behalf of copyright owners, is also named as a defendant in the suit. 

Carter claims "Universal has claimed a right to 100% of the label performance royalties attributed to the YME Records" and "SoundExchange refuses to pay any of the money due to Young Money LLC and Carter individually based on Universal’s conflicting demand."

Carter wants the court to clear it up and is seeking at least $40 million in damages and disgorged profits and a "judgment declaring the parties’ respective rights with regard to Plaintiffs’ share of label performance royalties." 

This follows a $51 million lawsuit Carter filed against Cash Money last year, which is currently pending in Louisiana federal court.

That suit claims Cash Money not only failed to pay Carter money he is owed but also failed to pay third parties involved with Young Money Label artists and failed to properly register the copyright in recordings as jointly owned by Cash Money and Young Money.

March 28, 10:12 p.m. Updated with a comment from UMG.

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