“We are very happy the Court granted our TRO Application, and thrilled that the world should be able to now hear Megan’s new music on March 6,” said Pete’s attorney Richard Busch. “We will now proceed with the other claims set forth in the Petition.”
Pete is asking a judge to declare her “unconscionable” recording contract with 1501 void, saying that despite the fact that she has more than 1 billion streams and sold more than 300,000 individual track downloads -- earning an estimated $7 million in revenue -- she has only been paid $15,000 by the label.
In court papers, Pete said that ever since she brought on Roc Nation as her manager in September 2019, she has been “attacked, and threatened on social media” and believes that Crawford and 1501 Certified Entertainment are behind those attacks. She points to the posting and distribution of her mug shot from an arrest five years ago when she was 19 as an example of attempts to hurt her career. She also said that a producer associated with 1501 threatened her with physical harm.
Pete told the judge that as recently as Sunday, Crawford published an ominous social media post stating, “1501 Certified Ent — At a time when loyalty is at an all time low it’s nice to be link with @Jprincerespect who is steady teaching me how to move in this cutthroat industry 100 and I know that terrifies some especially the ones who double cross me #Paybacksabitch.”
Pete's filing points to key contract points that demonstrate her contract is not on par with industry standards, and accuses 1501 of fraudulently representing itself as a full service operation and taking advantage of her when she was young and naive. The filing also states that her label failed to take basic action to protect her interests, such as registering her songs with the copyright office and finalizing legal agreements with third parties. It concludes that her contract is “not only entirely unconscionable, but ridiculously so” because it allows her label to “literally do nothing, while at the same time taking for themselves the vast majority of Pete’s income from all sources.”
The rapper opened up to her fans on Sunday about the issues she's been having with 1501 Entertainment as she attempts to release new music off her forthcoming album, Suga. In a live Instagram video, Megan explained her side of the story, stating that when she signed a management deal with Roc Nation, they brought certain details to her attention about the initial deal she signed with 1501.
"I was like 20 and I didn't know everything that was in that contract," she said. "So when I got with Roc Nation, I got management -- real management -- and real lawyers. They were like, 'Do you know that this is in your contract?' And I was like, 'Oh, damn, that's crazy -- no, I didn't know.'"
She said that per the contract, 1501 gets 60% of her recording income and that payment to third parties such as producers, mixers, remixers and featured artists is paid out of her 40% interest -- a split she noted is well below industry standards. She also said the contract allows 1501 exclusive rights to control her live performances and touring, obtaining 30% of all her touring money, even as the label has no infrastructure to administer her copyrights or handle her touring. Ans she said the contract gives 1501 30% of all her merchandising.
In light of these business practices, Pete is asking for a judge to declare her contract with 1501 void. A hearing on whether to extend or terminate the TRO is set for March 13th in Texas.