Universal to settle Chuck D, Rick James, digital royalties class action suit for $11.5M

PRESS RELEASE:

Universal Music Group (UMG), on behalf of UMG Recordings Inc. and Capitol Records LLC, and plaintiffs' attorneys representing clients in class action lawsuits regarding digital download royalties today submitted a settlement for preliminary court approval.

In the lawsuit, the plaintiffs (including the estate ofRick James, Chuck D of Public Enemy, and others) alleged that UMG failed to pay proper royalties to certain artists when consumers bought MP3 files from digital music retailers.

Under the proposed terms, UMG will contribute a maximum of$11.5 millionto supplement payments to class members for past digital download activity, cover attorneys' fees and administrative costs, and also increase digital download royalties by approximately 10% going forward to class members who submit a claim. Class members can learn more about the settlement, including how to submit claims, atwww.umgsettlement.com.

In the settlement agreement, UMG specifically denies the plaintiffs' claims, and states that it agreed to settle the claims rather than continue to litigate the matter to avoid the associated legal expenses.

In a statement, UMG commented, "Although we are confident we appropriatelypaid royalties on digital downloads and adhered to the terms of contracts, weare pleased to amicably resolve this matter and avoid continued legal costs."

Len Simon, one of the lead plaintiffs' attorneys, said, "This settlement is a fair resolution of this controversy over how to compensate artists for their valuable work in a new medium which we believe was not contemplated by their contracts, many drafted in the 1970s or 1980s. And it compensates these artists now, rather than after additional years of litigation and uncertainty."