Two independent radio promoters are targeting Universal Music Group, charging the label group, Universal Records and two promotion executives with racketeering, fraud and breach of contract.


NEW YORK -- Two independent radio promoters are targeting Universal Music Group, charging the label group, Universal Records and two promotion executives with racketeering, fraud and breach of contract.

In a lawsuit filed April 15 in Los Angeles County Superior Court, promoters Joseph Grossman and Lisa Welf claim that Universal Records, its VP of promotion Gary Marella and promotion executive Chuck Field refused to pay for the promoters' services unless they prepared "fraudulent" invoices.

Grossman's National Music Marketing alleges that it entered an oral contract with UMG and Universal Records in 1995 to provide promotional services for Universal's artists. During the summer of 2002, Universal owed the company "thousands of dollars" for work for such artists as Mr. Cheeks, Lil Romeo, Master P and Big Tymers, whose promotion budgets had been exhausted. National claims that Marella refused to pay unless Grossman changed those invoices to reflect services for artists with large promotional budgets, including Nelly, Raphael Saadiq and Paulina Rubio, even though he did not perform work for them.

Grossman alleges that he agreed to do this in response to Marella's threat to put him out of business. The complaint says the same demand to change invoices occurred in 2003, resulting in false charges to Baby Bash, Lil' Wayne and Sheek Louch.

Although Grossman complied, he alleges, Field "instructed representatives of several radio stations ... to prematurely terminate their exclusive relationships with National if they wanted the cooperation of UMG and Universal (i.e., the radio stations' lifeblood)." National claims that these activities ultimately led to its "downfall."

Welf alleges that Field instructed her to create a fictitious T-shirt company, and "to invoice UMG primarily under that nonexistent company" rather than her Majestic Promotions that was performing the services. The complaint says she "succumbed," yet invoices in May 2004 went unpaid. Welf claims she was then asked to prepare false invoices but refused.

The complaint alleges that UMG initiated false rumors that Majestic "double-billed," and then terminated Welf's services.

The promoters have also brought into the suit Archway Broadcasting Group, which operates radio stations in the Southeast. National claims that Universal "bullied" Archway into terminating its agreement with the promoter. Majestic claims that Archway breached their written agreement a few days after New York Attorney General Eliot Spitzer began serving subpoenas on record companies concerning promotion activities.

Although Tarzana, Calif.-based Grossman and Atlanta-based Welf make separate claims in the lawsuit, the two are listed as business partners of Sideshow Marketing on the company's Web site.

"These allegations are baseless, and we will vigorously defend against them in court," a UMG spokesman tells ELW. Archway could not be reached for comment.

In 2002 and 2003 many broadcasters, including Cox and Clear Channel, began terminating relationships with indie promoters. As a result, major labels did not need the services of indies for those stations.

Grossman, Welf and their companies seek more than $100 million in "economic" damages plus punitive damages for racketeering, fraud, defamation, breach of contract, interference and other claims.