The U.S. Supreme Court today declined to hear an appeal from Universal Music Group regarding how much it pays artists for digital music sales.
UMG is appealing a 9th U.S. Circuit Court of Appeals ruling from last year, which stated that the label should pay artists 50% of royalties from digital music sales, rather than the 12% rate as is common with physical sales.
The suit was brought by F.B.T. Productions, which originally signed Eminem before he joined Aftermath Records, which is distributed by Interscope. The original district court first ruled against F.B.T.'s claims, which the company then successfully appealed to the Circuit Court. UMG first filed an appeal with the Circuit Court, which, when denied, it elevated to the Supreme Court on the grounds that the Circuit Court never should have let F.B.T. appeal the case in the first place.
It was the first court ruling dictating how labels should pay digital royalties. The impact of the ruling, though, continues to be debated. Most new contracts these days specifically spell out how much artists and labels make in digital royalties. The legal arguments around the issue stems from older contracts, and other artists like Cheap Trick and Pink Floyd have made similar legal challenges.
Additionally, UMG could appeal again on different grounds. UMG did not immediately respond to requests for comment, but we will update the story as more information becomes available.