Money Rehab with Nicole Lapin - Megan Thee Plaintiff

Episode Date: August 24, 2022

Hot Girl Lawsuit? Megan Thee Stallion is seeking $1 million in relief from her Houston-based record label 1501.  With artists selling their catalogs, and highly publicized legal disputes between artists and their biz partners— think Kesha versus Dr. Luke and Taylor Swift versus Scooter Braun— this story is an interesting case study in the music industry, a master class on lawsuits, and an important reminder to do your homework before signing a contract. Nicole explains. To learn more about the lawsuit, check out: https://people.com/music/megan-thee-stallion-demands-1-million-from-record-label/ https://www.rollingstone.com/music/music-news/megan-thee-stallion-1501-label-1234579282/ 

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Well, it doesn't. Charge for wasting our time. I will take a check. Like an old school check. You recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin. Yesterday's episode was all about this hot girl summer sadly coming to an end.

And today's episode is all about the OG hot girl summer icon herself, Megan Thee Stallion. Megan made headlines yesterday when People, a People magazine, not People, People, obtained court documents that outlined Megan's request for $1 million in relief from the Houston-based record label 1501. If this is the first you're hearing of Megan's legal qualms with her label, buckle up, because this is just the latest development after two years worth of lawsuits and countersuits and leaked music and major tea. If you haven't heard this drama, you likely don't follow Megan on social media because she has been very outspoken about her issues with her label and her, to use her word, unconscionable contract. With artists selling their catalogs and highly publicized legal

disputes between artists and their biz partners, think Kesha versus Dr. Luke, Taylor Swift versus Scooter Braun, this story is a very interesting case study in the music industry. It's masterclass on lawsuits and also an important reminder to do your homework before signing a contract. lawsuits, and also an important reminder to do your homework before signing a contract. But let's start at the beginning. In 2018, Megan signed with the label 1501 Certified Entertainment, a label owned by former baseball pro Carl Crawford. The exact nitty-gritty of this initial contract is unclear. But based on what's been made public by both Megan's lawyers and 1501's lawyers, it seems like the contract outlined several requirements for the partnership,

like the number of albums that Megan would release under the label, particular timing criteria of those albums, what exactly constitutes an album, and how Megan and the label would split royalties and ancillary profit from things like touring, merch, and so on. As Rolling Stone writes, it's standard in the music industry to split recording profits 50-50 between the artist and the label. However, Megan's deal with 1501 allotted 1501 60% of the recording income and payments to outside parties such as producers coming out of Megan's paycheck. The contract also gave the label a 30 percent cut of touring and merch profit. Megan didn't know her contract was unusual until in 2019, one year into her contract with 1501,

she hired Rock Nation, a management firm that of course represents other heavy hitters like Alicia Keys and Rihanna. On Twitter, Megan has posted videos telling her fans about how she was shocked when Roc Nation told her that she was getting paid under the industry standard. 1501 has claimed that until she signed with Roc Nation, she was happy with her contract, but that this contentious legal battle is part of a larger goal to replace 15.01 with Roc Nation. Honestly, they're probably right. But what kind of argument is that? That Megan was happy with her contract until she realized it was shitty? Yeah, that totally makes sense. Of course she would want to bring

on a management team that is promising her more money. But whether or not it makes financial sense for Meghan to get out of her contract with 1501 and whether she has the legal right to get out of her contract with 1501 are two totally different questions. Enter the lawsuits. different questions. Enter the lawsuits. In 2020, Megan filed a lawsuit against 1501 claiming that the label was preventing her from releasing new music after she tried to renegotiate her contract. That year, she won a restraining order against her label, and in 2021, she reached a settlement with the label that updated her contract. But that settlement also upheld certain portions of the initial contract, notably that she needed to still deliver two albums before she could consider her contract fulfilled. Since then, Megan has put out collections of music, something for

the hotties, and Tramazine. This is now where things get a little hairy, but from what I can tell, in early 2022, 1501 told Megan that they would not be counting Something for the Hotties as an album that fulfills her contractual quota for an album. The label argued the project didn't meet the contractual requirements necessary to call itself an album in a number of ways, including the fact that the collection was only 45 minutes long, it features freestyles available on YouTube and archival material from as far back as 2019, and was released too soon after her previous 2020 album, Good News. Then, in February 2022, Megan sued the label in a move aimed at getting something for the hotties recognized as an album. And then 1501 countersued.

Cut to the present. The latest court documents from Megan's legal team argue that not only should Megan be released from her contract, but she should also be awarded $1 million of relief. I have a quote to read for Megan's lawyers, but before I do, I want to reveal yet another shocking discovery in these documents. Megan's last name is Pete. Did you know that? What a very unremarkable name for such a remarkable artist. It is also bizarre going through these documents reading Megan's lawyers refer to her as Pete. Anyway, Megan's lawyers say that her label's classification of something for the hotties is, quote, clearly a ruse in an effort to try to take further advantage of Pete at great

expense and in bad faith, end quote. Side note, I was really hoping that her last name was actually Stallion, right? Middle name, the last name Stallion, anyone? Anyway, the latest court documents make it clear that Megan's legal team is anticipating that 1501 will argue that Traumazine, Megan's latest project totaling over 51 minutes, does not count toward her album quota either. However, 1501 is still deliberating. Steven Zager, a lawyer that represents 1501, says that the label has tried to work with Megan and wants her to be successful, but they feel they're owed at least one more album. Zager also claims that Megan's legal team added the $1 million relief payment to the lawsuit for, quote, impact. And in fact, Zeger alleges that Megan owes 1501 more than a million dollars for their cut of things like touring, endorsements, merch, and more. But let's take a

step back. WTF does relief mean in this legal context anyway? I mean, writing to a judge and saying you need a million dollars of relief sounds pretty awesome to me. I mean, I think anyone would use the word relief, among other words, if someone just sent them a check for a million dollars, wouldn't you? But the Legal Information Institute at Cornell Law School defines relief as, quote, damages, costs, attorney's fees, and any other form of monetary payment. Okay, great. So follow-up question? WTF are legal damages? Again, our pals at the Legal Information Institute at Cornell Law School give us a definition. Damages refers to, quote, the sum of money the law imposes for a breach of some duty or violation

of some right, end quote. It's unclear how that $1 million figure was actually calculated, but Megan's lawyers allege that 1501 owes her royalties from her music. And in further drama, because yes, this does get wilder, snippets from Traumazine were leaked online before the project was public. Megan has said that after the leak, she had, quote, no choice but to release the entire album early. Now, Megan is alleging that 1501 was the source of the leak and that she's hired forensic investigators to find out who was responsible once and for all. I mean, accusing your label of leaking your music? Losing your label of leaking your music? That's massive. It's an accusation that 1501 has adamantly denied. Zager, again, the 1501's lawyer, told Rolling Stone, quote, there's not a shred of evidence that we leaked trauma scene. I don't even think my guys would

know how to leak it, nor can I think of a motive. We participate with Megan in the profits. Why would we want to do that? It's coming completely out of left field and preposterous. Hopefully, the truth will come out soon. Megan is due for an in-person deposition in October 2022, and the trial is expected to happen after May 2023. But I think we can expect to see the court of public opinion passing judgment way before then. If Meghan tells her fans that she can't release new music until this legal issue is resolved, they may revolt and put public pressure on 1501 to resolve the contract dispute quickly. And when they do, you can hear all about it right here on Money Rehab. For today's tip, you can take straight to the bank. When you have your big break in your career, whether it's getting signed to a label or landing your dream

job or getting a book deal, you may be so grateful for the opportunity that you accept a crummy deal. I know the feeling of pure joy when your dreams start coming true, but don't let that joy stop your critical mind from kicking in. You should still always do your research and check contract norms before signing onto a deal. Take it from Miss Pete, just because someone recognizes your worth doesn't mean that's what they'll offer you. And to 1501, if you're listening or any publisher of creator content out there, sometimes you don't settle these deals because of the money you'll make from this one, but the reputation you keep for the next one. Life is long and the world is small,

especially in different entertainment industry niches. People talk. I know that's not a hot take, but do you think the next rising music star is going to want to sign with you after hearing all this? No chance. But there is a chance if you act in everyone's best interest, in accordance with the spirit of the deal, rather than just what the deal says.

People want to work with people that abide by principles and the spirit of the deal, not just legalese. Don't do it for Megan Peete. Do it for the next Megan Leastellian. Megan Pete. Do it for the next Megan Thee Stallion. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy. Huge thanks to OG Money Rehab team Michelle Lanz for her development work, Catherine Law for her production and writing magic,

and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.