February 21, 2014 08:29:41 GMT
According to the suit, Sony has underpaid the singers by choosing royalty routes in lucrative streaming deals with Google, Apple and Spotify.
Sony Music has been accused of stealing millions of dollars from former "American Idol" contestants like Carrie Underwood and Kelly Clarkson. The Hollywood Reporter said that 19 Recording, which was founded by the singing show's creator Simon Fuller, filed a lawsuit against the major label on Thursday, February 20.
In their contracts, the artists will receive 50 percent royalties for "transmission/broadcast" and just a fraction of that for "sale/distribution." In the lawsuit, 19 claims that Sony has underpaid the singers by choosing royalty routes in lucrative streaming deals with Google, Apple and Spotify.
"Such exploitation can only be fairly described as 'transmissions' or 'broadcasts,' and, upon information and belief, are so described in the licenses or other agreements between Sony and the streaming services," the lawsuit states.
"However, Sony has nevertheless accounted to 19 for all streaming income received at the lower Album rate as if the exploitation between the streaming service and the end user was described as a 'distribution' or 'sale' and, by so doing, Sony has breached the Recording Agreements," it continues.
19 Recordings also alleges that Sony has paid incorrect amounts on other products, such as music videos, compilation albums, and more ventures. Other "American Idol" fames including Jordin Sparks, David Cook, David Archuleta, Clay Aiken and Chris Daughtry are also cited in the suit.
19 claimed they had tried and failed to make several attempts to settle with Sony. "We did not want to have to file this lawsuit, but Sony left us no choice, so this became necessary to protect our artists," 19 Entertainment's worldwide head of music Jason Morey told THR. 19 is now seeking at least $10 million in damages.