Lit, the rock band behind the 1999 hit “My Own Worst Enemy,” has reached a settlement in principle with Sony Music Entertainment, ending a legal dispute over the royalty rate applied to their streaming catalog.
The lawsuit was filed by frontman A. Jay Popoff, guitarist Jeremy Popoff, bassist Kevin Baldes, and the estate of late drummer Allen Shellenberger. Sony, which acquired RCA Records years after the band signed to the label in 1998, had been paying a 14% royalty on streams. The band argued their 1998 contract entitled them to 50% of net receipts whenever a master recording is licensed, and that on-demand streams should be classified as master use licenses rather than sales. They claimed more than $800,000 in underpaid streaming royalties. At the time the contract was signed, streaming services and Napster did not exist.
The complaint also raised several additional allegations:
- The 1998 RCA agreement stipulated a 50% share of net receipts for master use licenses, a rate the band contended should govern on-demand streams.
- Sony’s formula for calculating video streaming royalties was incorrect.
- The label never applied a higher royalty rate after the band’s album A Place in the Sun achieved Gold and Platinum certifications.
- The reduced royalty reports lowered the band’s pension contributions and affected their health insurance eligibility through SAG-AFTRA (Screen Actors Guild – American Federation of Television and Radio Artists).
The settlement in principle was reached on July 7. U.S. District Judge John P. Cronan closed the case on Tuesday.
