Universal Music Group has won a case brought by Eminem's production company, which if it had been successful might have made a billion-pound impact in the way musicians' royalties are allocated.
A Los Angeles jury rejected arguments made by FBT Productions, who have represented Eminem since 1995. FBT was demanding a higher proportion of revenue from digital sales, including ringtones and iTunes Music Store purchases. Eminem's exclusive deal with FBT, signed before he was famous, entitles them to 40% of his royalties.
"It's a big disappointment," Joel Martin, one of the plaintiffs, told Bloomberg.
Although Eminem was not a party in the case, he and thousands of other artists could have benefited greatly from an FBT win. That verdict would have redefined the terms of contracts signed before the era of digital and mobile phone sales.
While FBT argued that iTunes purchases should be treated the same way as other third-party licensing, where the artist receives a 50% royalty, Universal Music's lawyers asserted that digital sales are equivalent to retail sales of CDs. "We're very pleased with the jury's decision," a Universal Music spokesman said.
FBT did receive $159,000 (£112,838) of good news, however. The jury found that Universal Music had indeed misallocated some royalties – albeit far less than the $1.47m (£1.04m) that the company had asked for.
FBT has said that they will likely appeal the ruling.
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