According to a filing for declaratory judgment submitted to U.S. District Court in the Southern New York District on July 6, the label contends it is entitled to half of SoundExchange payouts for so-called “non-interactive digital performance royalties” — monies paid by such streaming services as Pandora, Spotify, SiriusXM and other webcasters which are considered digital radio. Typically, such royalties would go to the label who would divide the fees based on its contract with the artist. In Childish Gambino’s case, Glassnote contends it is entitled to a 50 percent share of such public performance royalties. The other 50% is due to Glover (45%) and to participating featured artists and producers (5%). Since 2012, the amount paid out to Glover is around $700,000.
But for reasons which aren’t entirely clear from the filing, other than the license term expiring in 2017 (Glover signed with RCA Records in January), Glover is insisting he’s entitled to 100% of those performance royalties and has been collecting the fees directly from SoundExchange. Glassnote is asking the court to make a determination over the contracted split and that the label be able to keep SoundExchange royalties that it has already received.
For its part, Glassnote reveals that it has already paid Glover $8 million over the life of the contract and anticipates paying him another $2 million before their business with each other is, ostensibly, done. In addition, the complaint notes that Glassnote bore all financial risk in launching Gambino and had advanced him monies against future royalties as well as committed to a minimum spend of $200,000 for “Awaken, My Love!” — outlays that Glassnote “far surpassed,” reads the filing.
Per the complaint: “In late 2017, the License Agreement expired. Shortly thereafter, Glover, apparently unsatisfied with the approximately $10 million in royalties already paid or due to him by Glassnote and the 45% of the public performance royalties from SoundExchange, took the position that he was entitled to the entirety of Glassnote’s 50% share of public performance royalties from SoundExchange — and that Glassnote was not entitled to any such royalty.”
Glassnote states that it had previously “enjoyed a productive and profitable creative and business relationship.” Glover owned his master recordings and allowed Glassnote exploitation rights. But things went south and hit bottom around June 28 when, according to the filing, Glover’s legal representatives demanded “a payment of $1.5 million as well as 100% of the ‘rights owner’ share of SoundExchange royalties on a moving forward basis.” The payment was due, per Glover’s team, on or before July 6.
Glassnote, which was founded by Daniel Glass in 2007 and is based in New York, is represented by Loeb & Loeb in this matter.