'N Sync and Trans Con Settle
'N Sync vs. Trans Con: the music biz's nastiest legal battle of the decade
It's official: Meet pop music's new Dream Team. Jive Records' lineup of sluggers, already anchored by the Backstreet Boys and Britney Spears (who posted the No. 1 and No. 2 selling albums of 1999, respectively), just landed more firepower. Empowered by a preliminary victory in Orlando federal court last month, `N Sync announced an out-of-court settlement on Wednesday with their old record company, whichclears the way for the five boy wonders to join Jive's roster of pinup stars.
(Terms of the deal were not disclosed, but the agreement rules out a full-blown, tug-of-war trial over the group.) Combined, the three mega-platinum acts of `N Sync, BSB and Britney are among the biggest in the business. And all three plan on releasing new Jive albums next year. First up will be `N Sync's latest, No Strings Attached, due in stores on March 7. It was the release of that record, and the contentious battle over which label would profit it from it, that set off the music industry's nastiest legal skirmishes in years. The showdown featured `N Sync and Jive up against the group's former business partners, Trans Continental Records and its larger worldwide partner BMG (owners of RCA Records). The boys claimed that they had been exploited and betrayed. Their counterparts insisted that the five `N Sync members were ungrateful and greedy, arrogantly walking away from a binding contract. As one of the many lawyers involved summed it up in court, "This case is about nothing, nothing but money."
For fans to fully understand the nearly year-long behind-the-scenes battle, they have to go back to the early spring when `N Sync, coming off sales of nearly ten million albums in America and generating $300 million in revenue worldwide, began renegotiations discussions with their record company, Trans Continental. The wrangling limped along for months until the increasingly frustrated members of `N Sync -- Justin Timberlake, Joey Fatone, Lance Bass,Chris Kirkpatrick and J.C. Chasez -- decided to terminate their Trans Con deal and sign on with Jive.
"They got to the end of renegotiations, they didn't like what they were getting, so they played the termination card," said Trans Con lawyer Michael Friedman, prior to the settlement announcement. He insisted that Trans Con and BMG were more than willing to enrich the group's contract so it reflected their superstar status (i.e. increase their royalty rate, give the group more money up front for each album).
If the talks were a game of chicken, said `N Sync manager Johnny Wright, then Trans Con and BMG executives "didn't think these five [`N Sync] guys had the balls to go through with it."
It seems the brass at Trans and BMG were not alone. `N Sync's move was a stunner for most industry observers, who racked their brains trying to remember the last a time superstar act terminated its label deal and signed on with another. Back in 1991, for instance, Aerosmith announced they were leaving Geffen Records even though they still owed the company two more albums. But after a gaggle of lawyers sat down to hash things out, there was never anydoubt the band would fulfill their Geffen deal and then exit for Columbia Records. And that's how the vast majority of record label contractual standoffs are settled: over conference room tables, not inside courtrooms.
Two men doubly stunned by `N Sync's autumn defection were Lou Pearlman and Strauss Zelnick. Pearlman is the founder of Trans Con and the self-styled Berry Gordy of Orlando who helped create and market the Backstreet Boys, `N Sync, LFO, Five, and C-Note. The powerful hitmaker found out through the press that `N Sync had signed to Jive. "That hurt," says Pearlman, who insisted he would have let the boys walk to another label, as he did the BackstreetBoys, as long as he was fairly compensated. "You don't just walk away from a deal." Zelnick is the music boss at BMG who not only stepped in last May in hopes of hammering out an agreement between Pearlman and `N Sync, but also enjoys close business relations with Jive's parent, Zomba Recording Group, the industry's largest independent music company. BMG owns twenty percent of Zomba, and has distributed the company's records in North America. Thatmade news that Jive planned on running off with one of BMG's biggest acts all the more upsetting. "He was furious," says one of Zelnick's colleagues. "On a scale of one to ten, I'd say it was a ten."
Trans Con and BMG soon joined forces and filed a $150 million breach of contract suit and asked a judge for an injunction to stop what BMG attorney Steven Hayes labeled the group's "renegade act, which is wholly improper under the standards of the music business or any business, [and] should be stopped." Hayes argued that if `N Sync were allowed to walk, other recording artists would interpret that it as "open season" and "simply ignore theircontractual obligations." (Artists certainly have been paying close attention; after reading about the `N Sync case this summer, popsinger Christina Aguilera made inquiries about the specifics of her BMG deal.) `N Sync's lawyer, Adam Ritholtz, called that claim nonsense. "The fantastic claim that all artists are going to walk away from their deals is ridiculous. The facts are highly unique to this case."
In this complex and messy squabble in which virtually every fact was disputed, from central questions like how much `N Sync members have earned to trivial accounts of who came up with the unique spelling of `N Sync, perhaps the only statement both sides would agree on is that the facts in this case are highly unique.
The basics are that in April of 1996 the five members of `N Sync signed on with Pearlman's Trans Continental, which was essentially a production company. He agreed to secure the boys a label deal. Finding no interest among American record companies (including Jive), Pearlman, as he had done with the young Backstreet Boys, signed a deal with a European company, BMG's German affiliate, Ariola. But beyond those basic facts of the story, both sides have disagreed passionately.
`N Sync claimed their `96 agreement specifically called for Trans Con, within eighteen months of signing the group, to land them an American record deal. That summer Pearlman told members that they had been signed a "superstar" deal with BMG's RCA Records. But although RCA released the groups two albums here, it turns out `N Sync were not actually signed to RCA. Instead, RCA, as is common among multi-national conglomerates, licensed `N Sync's records from its German counterpart, Ariola. Consequently, band members got paid in Deutsche marks and were subject to fluctuations in the currency exchange rate. And because `N Sync were signed internationally, royalty payments were slower in coming than if the group were signed with a U.S. company. It all added up, argued `N Sync's lawyers, to a breach of contract.
On top of that, the boys claimed the group's original contracts with Trans Con were drastically unfair, allocating far too much money and control to Pearlman, and that the group had no choice but to seek relief elsewhere. "The overview, the combination of documents, is just breathtaking in its aggressiveness," says music industry attorney Jill Berliner. She does not represent `N Sync, but she did file court papers on their behalf, arguing, as anexpert witness, that the band's Trans Con deals were "classic contracts of adhesion imposed upon an uncounseled and unskilled, highly susceptible group of teenagers." She notes that if `N Sync had been signed directly to an American record label (instead of being licensed through Germany), the Trans Con deals would have been tossed out and rewritten. "No U.S. executive I know would have allowed these contracts to exist," she says.
Specifically, `N Sync claimed Pearlman, through a web of deals, pocketed the group's advances from the record company, took eighty percent of the group's merchandising money, seventy-one percent of the touring money and fifty percent of royalties, while the whole time earning a commission of band profits as their manager. (Typically, managers pocket between ten or twenty percent of their acts' profits. For a manager to earn a portion of royalties on top of that is highly unusual.)
Trans Con's Friedman said hindsight was 20/20. "When you're claiming a deal is unconscionable, you have to evaluate that when `N Sync entered into the agreement nobody wanted to sign this group. This group was shopped around and only one or two companies wanted to invest in them, Trans Con and BMG. Four years later, any label would pay them a fortune because they're at superstar status."
Also, back in November, Pearlman argued that during the group's struggling salad days, "I paid the bills. I gave them a house; I paid their living expenses, for vocal coaches, choreography. I didn't hear anybody talking back then that [the deals] weren't fair. For the next three years they weren't unfair. I was out three million dollars. As soon as the money comes in, 'Oh, we weren't signed two years ago to a U.S. record company.' I mean gimme a break. What were they saying back then? They said they loved BMG."
At the crucial court hearing held the day before Thanksgiving, Trans Con lawyers quickly tried to turn the attention away from Pearlman and his dealings. "We are not asking your honor to decide that Lou Pearlman is a wonderful guy," Barry Brett told Judge Anne Conway. "We think Mr. Pearlman is a very special gentleman who is responsible for these five young men and a lot of other young men having become millionaires." Brett argued that a jury could one day decide whether or not `N Sync's Trans Con contracts were unfair. But until that trial took place, the group should be barred from jumping to Jive.
However, Judge Conway, who peppered Trans Con and BMG lawyers with dozens of questions, seemed very interested in Pearlman's transactions and the amount of money he'd earned off `N Sync, a figure which remains a mystery to this day. After listening to seventy minutes of oral arguments, she declined to issue an injunction against `N Sync. "I don't see any reason as to why the defendants can't go forward," she commented from the bench. "There are just too many questions of fact as to Mr. Pearlman and his dealings with them."
The judge's curiosity about Pearlman was a crucial turning point in the proceedings. Trans Con and BMG argued that `N Sync members have been paid seven million dollars to date, a handsome amount that didn't square with the group's claim that they had been "virtual indentured servants." But how much had the two record companies, along with Pearlman, earned off `N Sync? Ten million? Fifty million? 150 million? That kind of information would put the group's earnings in some perspective.
And perhaps that was one reason Pearlman, who earlier insisted on a full trial to clear his name, eventually settled with Jive out of court. Did Pearlman, who appeared rather uncomfortable in the Orlando courtroom, sitting twenty feet away from the `N Sync members who used to call him "Big Poppa," really want to take the stand and answer pointed questions under cross-examination about his `N Sync bounty. And how would a jury react if earnings dwarfed that of group members?
The judge's comments from the bench sent a clear message to both parties. First, that `N Sync could go ahead with plans for releasing No Strings Attached (get it?) on Jive, and that if Trans Con and BMG wanted to push on for a full trial to determine whether or not Jive unfairly stole the group away, they could. However, she noted that trial might not take place until 2001 or 2002. Instead, she urged the two sides to come to an agreement. On Wednesday, they did. And while neither side is talking specifics, odds are Jive, in exchange for taking `N Sync, will pay Pearlman and BMG some sort of compensation, or make sure they continue to profit in some way from `N Sync's future success.
The mini-courtroom drama, complete with placard-waving `N Sync fans who gathered on the steps of the court house, and a dejected RCA president Bob Jamieson watching from the gallery inside, marked a stunning legal victory not only for the band, but also their record executive in shining armor, Clive Calder. He's the press-shy founder of Zomba Music, and the clear winner in this high-stakes gamble. Over the summer, when none of the other five major labels would touch the group and their controversial contract beefs, Calder boldly signed them to a deal.
"He's not one of the Big Five," notes one influential music industry attorney, explaining how Calder and Zomba's independent status helped him. "He's not in that gentlemen's club. What happens is the Big Five get together and talk to each other and say we need to run the business, not the artists. He's a maverick and he empowered `N Sync." Adds Berliner, "He took a huge risk, and it's going to pay off."
Calder's daring gambit did momentarily threaten Jive's relationship with its cornerstone act, the Backstreet Boys. They were reportedly unhappy sharing the spotlight with `N Sync and threatened to bolt to another label. But in November, when Jive agreed to sweeten the Boys' contract for the second time in less than a year, the squabble, to nobody's surprise, was quietly resolved. ("It was a classic case of posturing," suggests one industry exec.)
As for the BMG and Zomba relationship, their distribution deal was set to expire in early 2000. But as part of the settlement, Zomba will renew its deal with BMG for another year, in return for BMG and Trans Con dropping their lawsuit. The pact is crucial to BMG's bottom line since Zomba is the hottest label in the business right now. And if BMG can't have `N Sync directly, they want to at least profit, however marginally, from distributing thegroup's records.
Remember what the attorney said in court? "This case is about nothing, nothing but money."
ERIC BOEHLERT
(December 29, 1999)
Trans Continental Records Clarifies Its Role With Backstreet Boys And 'NSYNC
ORLANDO, Fla., Sept. 29 /PRNewswire/ -- Orlando-based Trans Continental Records, founder, Louis J. Pearlman, today announced that his company wishes to clarify its position with regard to the Backstreet Boys and 'NSYNC. The Backstreet Boys renegotiated their contracts with Trans Continental Records early this year. Terms of that agreement were not publicly disclosed yet the company remains financially involved with the Backstreet Boys and is gratified with the group's continuing success.
"Backstreet Boys renegotiated their agreements with Trans Continental Records, and we are pleased with the terms," commented Pearlman. "With regard to 'NSYNC, we remain committed to the fundamental principles of our agreements that state that 'NSYNC has exclusive recording and other obligations to Trans Continental and that 'NSYNC is first and foremost a Trans Continental Records act that is distributed in the U.S. by RCA, a label of BMG. We are a family. A family not only of companies, but also of people, many people worldwide who helped discover and nurture the talents of these young men within Trans Continental and its affiliated partners."
Following several reports by broadcast news organizations, the relationships between Trans Continental Records, Pearlman, and the bands may have been mischaracterized.
"Trans Continental Records has made its name and reputation discovering and giving opportunity to young talent," said Pearlman.
Trans Continental Records, founded in 1992 in Orlando, Fla., by Pearlman, has developed a reputation, unique since the days of Motown, for discovering, developing, and nurturing musical talent. With sales of Trans Continental artists in excess of 65 million units in over 25 countries, Trans Continental Records boasts several of the world's hottest and most influential pop acts, including Backstreet Boys, 'NSYNC, LFO, C Note, Take 5, and Innosense as well as the soon-to-be-released Phoenix Stone. Recently, Trans Continental has expanded its small, hand-picked roster to include the hip-hop acts Trey D and Mista Brizz. Currently, LFO is number one for the sixth week in a row on the BILLBOARD single sales chart.
Group founders' suit could put 'N Sync out of business
Leslie Doolittle of The Sentinel Staff
Published in The Orlando Sentinel on October 13, 1999.
War has been declared in Orlando's billion-dollar bubble-gum pop world.
Trans Continental Records, its founder Louis J. Pearlman and worldwide record distributor BMG filed a lawsuit in federal court in Orlando on Tuesday that could bring 'N Sync -- the musical money machine they helped create -- to a screeching halt.
Trans Con, Pearlman and BMG are seeking $150 million in damages from all five members of the multiplatinum-selling group and Zomba Records, accusing them of breach of contract because 'N Sync recently signed with Zomba subsidiary Jive Records.
The plaintiffs also want to stop the group from any use of the name 'N Sync, claiming it would infringe on Trans Con's exclusive rights to that trademark.
"This is a scorched-earth policy," said J. Cheney Mason, Trans Con's co-lead trial counsel. "We're going to shut them down. We believe there will be no tours, no performances, no rehearsal or recordings" other than those benefitting Trans Con until contract disputes are resolved.
"It is not Trans Continental's intent to cut the throats of those boys," said Mason, referring to Justin Timberlake, Joey Fatone, Chris Kirkpatrick, J.C. Chasez and Lance Bass, whom he said have received more than $1 million each from the group's debut album sales. "But we're going to decapitate the advisers who have been giving them bad advice."
At stake: about $300 million in initial record sales and merchandise and a contract for several more albums with expected revenue Trans Con says easily exceeds $1 billion.
Johnny Wright, the group's Orlando-based manager, could not be reached for comment Tuesday. But in an earlier interview, Wright said he expects the business-minded folks on both sides of the table to resolve the dispute without disruption to the group, as they did when the Backstreet Boys faced off with Trans Con a year and a half ago.
A spokesperson for Zomba and Jive would not comment except to say neither record company had been served with papers in the case.
Trans Con's lawyers said 'N Sync has justified signing with Jive by saying Trans Con failed in its contractual responsibility to obtain a U.S. record company with national distribution within 18 months.
"That's the most legally incompetent and absolutely stupid position I've ever seen in my career, and I've seen some lulus," Mason said.
William Pringle, co-counsel for Trans Con, said within four months his client had 'N Sync signed with BMG, an international distributor that owns RCA Records.
"We're done having people take advantage of Lou Pearlman," Pringle said, noting the recording executive had invested millions grooming the Orlando-based group for stardom since 1996.
Trans Con attorneys insist the company is willing to put 'N Sync out of business.
"If this means 'N Sync will cease to exist, there's another group right behind them," said Mason, referring to Take 5, the next boy band in the Trans Con pipeline.
In an earlier interview, Wright said even if 'N Sync lost its right to use that name, the group would go on.
'N Sync isn't the first band to end up in a battle over rights to a famous name. Others include Creedence Clearwater Revival, Jefferson Airplane/Starship, Toto and the Buffalo Springfield.
Both sides in the current dispute said they hope problems are resolved before brakes are applied to 'N Sync's business, which could come in the form of a preliminary injunction in about 30 days.
How quickly could this be resolved?
"That depends on how smart they get and how quick they get smart," Mason said.
N Sync Sued
by Julie Keller
Oct 13, 1999, 9:30 AM PT
If 'N Sync's ex-manager gets his way, he'll soon be tearin' up the bank accounts of the ultra-successful, Orlando boy band.
Louis J. Pearlman, his management team Trans Continental Media, Trans Continental Records and BMG Entertainment, owner of 'N Sync's former label, RCA, have sued the band and their new label, Jive Records, for $150 million.
The complaint, filed Tuesday in a federal court in Orlando, Florida, seeks to stop the group from using the name 'N Sync--be it swiveling their hips in concert or spinning their tunes in the studio. The suit also demands Jive return the master recordings produced this year to be used for release of the band's second RCA records album. The five-member band previously announced that Jive would release their next album in early 2000.
The suit asks for $100 million in compensatory damages and $50 million in punitive damages.
"This does not sound good for 'N Sync," surmises a cyberfan on the alt.fan.butterfinger newsgroup.
The fellas split with RCA records and signed on with Jive (of the Backstreet Boys and Britney Spears) last month, when they claimed the label failed to live up to its contract with the band. Needless to say, the old label and manager are a little pissed about losing their multi-million dollar asset--the group's self-titled debut has been certified multiplatinum, with 7 million-plus in sales.
"Jive Records' scheme to violate Mr. Pearlman's exclusive right with 'N Sync should sound a sour note throughout the music industry," Pearlman's attorney, Michael Friedman, told Daily Variety. "It is absurd to think that now that the members of 'N Sync have been made rich and famous, they can just turn their backs on Mr. Pearlman and go someplace else."
A Jive Records publicist had no comment on the lawsuit. Calls to Pearlman's Trans Continental Media have not been immediately returned.
Not only has 'N Sync ticked off their old manager and record label, but fellow Orlando teen titans, Backstreet Boys, are none too pleased with the latest addition Jive's pop-laden roster. Just last week, report were circulating that Boys are looking to dump the label.
According to Billboard Online, the Backstreet Boys' legal team sent a letter to Jive founder Clive Calder saying the label has breached its contract with the group, freeing the Boys to take their multiplatinum voices elsewhere. "They're tired of being exploited,"an anonymous source close the band told Billboard. "Their unhappiness [with the label] is rooted in their feeling of betrayal and deceit."
As for 'N Sync fans, talk is already underway of an uprising of sorts. "Ooh, I think the fans should help," says another chatter on alt.fan.butterfinger. "Maybe, like, anyone who lives in Florida, maybe we could organize a date and protest outside Transcon. Other people can, like, write letters too."
Labels Sue Jive Over Rights To 'N Sync
(from Billboard Online)
In the latest chapter in a dispute that has been brewing since Jive Records announced it had signed RCA Records act 'N Sync, the teen act's mentor Louis J. Pearlman, his Trans Continental Records, and RCA parent BMG Entertainment have filed a breach-of-contract lawsuit against 'N Sync, Jive, and its parent Zomba Recording.
The suit, filed yesterday in Orlando, Fla., seeks $100 million in compensatory damages and $50 million in punitive damages, according to a BMG spokesman, who confirmed a news report by MTV. The suit also asks the court to grant a preliminary injunction preventing Jive, Zomba, and the members of 'N Sync from using the name or releasing any recordings, and the return of the masters produced for the group's projected third album.
"We hope everyone will do the right thing so the group can be where it belongs, which is onstage, rather than in a court of law," says BMG in a prepared statement.
"It is absurd to think that now that the members of 'N Sync have been made rich and famous, they can just turn their backs on Mr. Pearlman and Trans Continental and go someplace else," says Michael D. Friedman, attorney for Pearlman and Trans Continental, in a prepared statement.
A Jive spokesperson could not be reached for comment.
'N Sync's eponymous RCA album has been certified for sales of over 7 million copies. The set, which has been on The Billboard 200 for 80 weeks, currently sits at No. 51.
'N Sync's second album, a holiday set titled "Home For Christmas," peaked at No. 7 last November.
10.13.99 16:15 EST 'N Sync, Trans Continental Clash Over Lawsuit
"Trans Continental's conduct with regard to 'N Sync is the most glaring, overt and callous example of artist exploitation that the music industry has seen in a long time." - 'N Sync
The day after Louis J. Pearlman and his Trans Continental Media targeted his former proteges in 'N Sync with a $150 million lawsuit, parties on both sides of the case began to air their arguments in the court of public opinion.
As we first reported on Tuesday, Pearlman (the group's former guru), Trans Continental Media, Trans Continental Records, and BMG Entertainment (owner of 'N Sync's former label, RCA Records) filed suit against the boy band as well as Zomba Recordings, which owns the label that 'N Sync leapt to earlier this month, Jive Records (see "'N Sync Hit With $150 Million Lawsuit").
The suit was prompted by 'N Sync's departure from RCA for the Jive roster, and Pearlman's legal team told MTV News earlier this week that the suit also "seeks to obtain a court order to prevent 'N Sync from existing" unless the group honors its management contract with Trans Continental Media and its recording contract with RCA.
Of course, 'N Sync views things a bit differently. "Trans Continental's conduct with regard to 'N Sync is the most glaring, overt and callous example of artist exploitation that the music industry has seen in a long time," the group argued in a statement issued to MTV News on Wednesday. "We look forward to the opportunity to air the full facts and will do so in the weeks to come."
In response, Pearlman's legal team claims, "Louis Pearlman and Trans Continental Records created, developed, financed and groomed 'N Sync and arranged, among other things, a very lucrative recording and distribution agreement with BMG that has been enormously beneficial to the group. They guided 'N Sync every step of the way through the often arduous process that led to the group's great success. Mr. Pearlman and Trans Continental have always acted in the best interests of the group and have tried for months to resolve any differences amicably. They have abided by the mutually agreed upon terms of their contracts, as they believe 'N Sync should, on legal and also on ethical grounds.
"Jive Records' scheme to violate Mr. Pearlman's and Trans Continental's exclusive rights with 'N Sync should sound a sour note throughout the music industry. It is absurd to think that now that the members of 'N Sync have been made rich and famous, they can just turn their backs on Mr. Pearlman and Trans Continental and go someplace else."
As the legal wheels begin rolling, 'N Sync will continue with the business of being 'N Sync. The group launches a U.S. tour on November 26 in Las Vegas and plans to release its next album on Jive Records early next year.
10/13/99: Johnny Wright speaks...
Tonight, 'N Sync manager Johnny Wright called Orlando radio station XL 106.7 from Las Vegas during the Hot 9 at 9 to discuss the lawsuit and 'N Sync's future plans. Basically, he said that they had expected the lawsuit to come as a result of signing with Jive (which he said had absolutely nothing to do with BSB, it was the best offer on the table after trying to renegotiate their RCA deal and not having that go the way they wanted) but that it will not affect the forthcoming single (due November) and album (due January or February 2000), the guys are currently recording. In addition, the guys will taping for the Celine Dion Special on Thanksgiving night and will be going on tour again the day after Thanksgiving so it's "business as usual." Johnny said "'N Sync is here, 'N Sync will be here 10 years from now if they choose to be." and "If it ain't 'N Sync, it's the artists formerly known as 'N Sync."
Pearlman Weighs In On 'N Sync Lawsuit
Trans Continental Media head Louis J. Pearlman may be named as a plaintiff in a $150 million lawsuit against 'N Sync, but the boy band guru told MTV News that he is "caught in the middle" of legal wrangling between the chart-toppers and their old label, RCA Records.
As we reported earlier this month, Pearlman, Trans Continental Media, Trans Continental Records, and BMG Entertainment are named as plaintiffs in the suit, which targets 'N Sync and Zomba Recording (which owns Jive, the label that 'N Sync jumped to in September). Among the claims made in the suit, Pearlman and his fellow plaintiffs charge the group with breach of contract (see "'N Sync Hit With $150 Million Lawsuit").
Pearlman told MTV News this week that he remains good friends with the members of 'N Sync, whom he helped to mold into a multiplatinum boy band in the same Florida compound that produced the Backstreet Boys. That friendship didn't come across in the days following the suit, when 'N Sync released a statement that read in part, "Trans Continental's conduct with regard to 'N Sync is the most glaring, overt and callous example of artist exploitation that the music industry has seen in a long time" (see "'N Sync, Trans Continental Clash Over Lawsuit").
"That was a response to a statement that was made by some attorneys about some of the advisors for 'N Sync," Pearlman explained, "and I think that it's being blown out of proportion. When there was a legal action brought, if we didn't side with BMG, who they originally signed with, then we would be sued too."
"So it's not us wanting to sue the boys," he continued, "and that's the last thing that we would ever want to do, is sue them. I think it blew out of proportion, because the paperwork looks like we are, but we're still as friendly as can be, and it's a tight family, and we'll stay that way. I think that the response was based upon some response that the attorneys had been talking about and blew out of proportion." [RealVideo]
On Wednesday, 'N Sync's legal team countered Pearlman's claims, telling MTV News, "While we cannot discuss the specifics involved in this case, for Lou Pearlman to assert that he is a mere sidenote in BMG's legal case is ludicrous. Pearlman and his two Trans Continental companies are listed as the case's main plaintiffs. We look forward to having our day in court where all the real facts will come out."
from mtv.com
'N Sync Vows To Continue Despite Label Fight
Complex internal conflicts reportedly fueling standoff between label, distributor.
By Mark Lewis
'N Sync's boy wonder Justin Timberlake says RCA and parent company BMG's $150 million lawsuit against the group won't hold his quintet back, not ''as long as I'm with my four friends and we stick together.''
In an interview with the Toronto Sun, the 19-year-old singer said that he loved making music, but hated the music business. ''It's a screwball business and there are a lot of players who will straight-up lie to you,'' he said.
He did not comment on the suit or the possibility of the group's return to RCA, which is distributed by Bertelsmann Music Group (BMG). Earlier this month, 'N Sync announced that it was leaving RCA and had signed with Jive Records, home to teen pop sensations Backstreet Boys and Britney Spears. RCA and parent company BMG responded with a $150 million lawsuit, filed on Oct. 12 in a federal court in Orlando. The companies are seeking rights to the 'N Sync name and threaten to stop all future tours and recordings.
Reports vary on why the group wanted to leave RCA and join Jive, which is a division of the Zomba group. Some claim simply that 'N Sync was after more money. But the Los Angeles Times, relying completely on unnamed sources, reported that Zomba chief Clive Calder lured 'N Sync away from RCA/BMG as a strategy to negotiate a new, more lucrative distribution deal with the company.
BMG currently distributes Zomba/Jive recordings in North America, but the deal ends in June. If BMG loses 'N Sync to Zomba, it could see as much as $28 million from the group's next two albums go down the drain, the Los Angeles Times reported. BMG's relationship with Zomba is further complicated by the fact that it bought 20% of Zomba's Jive from Calder in the early '90s, as well of 25% of the Zomba music publishing company.
BMG's chief Strauss Zelnick, credited with cutting costs and restructuring RCA since he began five years ago, tried to hold on to 'N Sync by offering them more money with a new deal. BMG executives reportedly discussed a proposal where it would renew its distribution deal with Zomba for another year and, in exchange, 'N Sync would make two new records for Zomba, which would take the lion's share of the profit. In essence, BMG was willing to give up 'N Sync as an RCA act if it could keep doing business with Zomba and all of its high-earning, extremely popular acts.
But negotiations broke down, BMG/RCA filed suit, and no new discussions have been held. As a result, 'N Sync's real label affiliation appears to be in flux. A spokeswoman for BMG's legal office would only say that ''it's a touchy situation.'' The group is not featured on the Jive Records Web site, and the obvious reason for that, said Jive publicist Carlos Vega, was that ''it's all up in the air.''
As for the controversy about 'N Sync joining the same label as the Backstreet Boys, the teen supergroup that some say 'N Sync emulates, singer Timberlake tap-danced around the issue in his Toronto Sun interview. ''We don't look at anyone as rivals. I don't know if anyone looks at us as rivals. They're not really part of my world.''
Timberlake speaks out of SYNC
In exclusive interview, singer breaks band's silence on legal hassles
By KIERAN GRANT
Toronto Sun
'NSYNC singer Justin Timberlake has broken his band's silence on legal hassles with label RCA, in an exclusive interview with The Sun.
Timberlake, in Toronto filming the made-for-TV Disney movie Cover Girls, sat down to chat about his first acting job and his song-and-dance group's coming album, tentatively titled No Strings Attached. But the 19-year-old didn't miss a beat when asked how 'NSYNC's creative flow has been affected by outside business controversies. "That's not outside (controversy), that's definitely inside," Timberlake said with a laugh, while taking a break Wednesday night on the downtown set of Cover Girls. "That's right smack in the middle!" Bid to leave RCA for Jive Records.
Until now, none of 'NSYNC's five members had commented publicly on the band's legal mess. The Orlando-based 'NSYNC and their management made music-industry waves last month when they announced they were leaving RCA for U.S. teen-pop bastion Jive Records, home also to the Britney Spears and 'NSYNC's perceived arch-rivals, the Backstreet Boys. In a mind-bending contractual dispute outlined in the current issue of Entertainment Weekly, RCA is trying to prevent its popular boy band from leaving. RCA and parent company BMG filed a US$150-million lawsuit against 'NSYNC and Jive on Oct. 12, after settlement negotiations broke down.
Adding to the confusion, BMG not only owns RCA but Jive's North American distribution rights, as well as 20% of Jive. And the Backstreet Boys are rumoured to want out of their deal with Jive, which that label isn't prepared to allow.
"I can give you my personal opinion: Love the music, hate the business," Timberlake said. "It's a screwball business and there are a lot of players who will straight-up lie to you. "As far as what's going to happen in our situation, people talk. When something gets to the press, it's already bigger than was speculated in the beginning. I have faith, and as long as I'm with my four friends and we stick together, we will always be 'N SYNC and there is no one who can hold us back."
'We don't look at anyone as rivals' Timberlake maintained his group's long-held stance that, contrary to popular belief, there is no open warfare between 'NSYNC and the Backstreet Boys. "We don't look at anyone as rivals," he said. "I don't know if anyone looks at us as rivals. They're not really part of my world. I've got enough problems that I don't have to think about who doesn't like me. Our meetings have always been friendly and professional, so I can't say I feel like we're not appreciated." Timberlake added, diplomatically, that it's the fans who matter most. "They appreciate what you do because you love to do it," he said, "and that makes them love it."
The aforementioned chaos aside, Timberlake said 'NSYNC are now taking a "break" after having wrapped a seven-month tour at the Molson Amphitheatre on Sept. 4. For the young singer, however, that meant signing on for Cover Girls, which also stars Kathie Lee Gifford and newcomer Maggie Lawson, who appeared in Pleasantville and Party Of Five. The movie will air on CBC as part of The Wonderful World Of Disney's 1999-2000 season. Timberlake has the romantic lead in the teen comedy, as a male model caught in a series of mistaken identities.
Ironically, he's making his acting start in Canada, where 'NSYNC caught on before conquering their U.S. home. "Isn't it funny?" Timberlake said. " 'NSYNC's first North American tour was across Canada. It's a sign." But does it beat an actual vacation? "I'm a workhorse," he said. "They say the business is hurry-up-and-wait. Well, 'NSYNC is the hurry-up and this is the wait."
The singer also just set up the Justin Timberlake Foundation, which will support arts programs in American public schools. Today he jets off to Washington, D.C., for brunch with the Clintons -- yes, those Clintons -- as well as Hollywood charity grand-daddy Paul Newman. So who's he most excited to meet? "I have a good way out of this one," he said, laughing. "I've already met the president, so Paul Newman. Any man who has his own salad dressing is incredible. My dad and I are huge fans. My dad's coming along and he's ecstatic."
'N SYNC FACE NEW LEGAL ACTION
'N Sync have been served another lawsuit by an unnamed individual seeking a fee for the use of copyright, the copyright in question being the band's name, 'N Sync.
The band have been stuck in the middle of a legal wrangle since Jive Records had a writ slapped on them by the boys' original label who claim to have trademarked the band's name back in 1996.
Band member Justin Timberlake has broken 'N Sync's silence on the issue, telling the press: "I can give you my personal opinion: Love the music, hate the business. It's a screwball business and there are a lot of players who will straight-up lie to you."
In a statement issued by the group, the boys make their feelings on the issue perfectly clear: "Trans Continental's ['N Sync's previous label] conduct with regard to 'N Sync is the most glaring, overt and callous example of artist exploitation that the music industry has seen in a long time."
'N Sync Fires Salvo In Fight Over Group's Future
Calling Trans Continental founder Louis Pearlman "a con man...who has become wealthy at their expense," the members of 'N Sync have filed a response to Pearlman and BMG Entertainment's October motion requesting a preliminary injunction against the group. 'N Sync also has filed a counterclaim and a $25-million-plus countersuit. Pearlman and BMG's action was in response to 'N Sync's attempt in September to switch labels from BMG-owned RCA Records to Zomba-owned, BMG-distributed Jive Records.
The papers, filed Tuesday in U.S. District Court in Orlando, Fla., allege that despite Pearlman's claim that his company owns the 'N Sync name in more than 20 countries, group member Justin Timberlake's mother came up with the name, and that, "in a secret scheme...[Pearlman] obtained a license to use such mark for himself."
Additionally, the papers allege that the financial deals the group signed with Pearlman gave him "or entities he controlled the ability to take as fees the vast majority of the group's income." Ultimately, the response claims that should the injunction be granted, such action "would likely destroy ['N Sync's] career."
In a joint statement, Trans Continental and BMG responded: "The false and inflammatory rhetoric contained in the court papers filed [Tuesday] have no place in a court of law, where we are confident that the group's exclusive obligations to Trans Continental and BMG will be upheld."
-- Melinda Newman, L.A
from billboard.com
GETTING 'N SYNC?
By ALLYSON LIEBERMAN
Following in the steps of the judge in the Microsoft trial, an Orlando, Fla., judge appointed a magistrate to oversee settlement talks between popular boy band 'N Sync and group creator Louis Pearlman and BMG Music.
BMG and Pearlman's Trans Continental Records sued the teenage quintet for $150 million last month when the band jumped ship to Jive Records, claiming they were cheated out of millions of dollars.
Pearlman and BMG asked the court to stop 'N Sync from releasing a new album under the label the boys now call home, but the judge said yesterday that she was "not inclined to grant the injunction."
And that had members of the chart-topping band claiming victory.
"Today's encouraging proceedings (are) the first step in resolving the situation," 'N Sync said in a statement.
"We are confident that we will be able to put all of this behind us shortly and continue as 'N Sync to make great music for our fans to enjoy."
But lawyers for the man the band often calls "Big Papa" quickly shot back, insisting the band was jumping the gun.
"While no decision has been made by the court, which is considering the complete record of proceedings, we are pleased to have begun this process," said Michael Friedman, an attorney for Pearlman. "We continue to believe that the group should, and eventually will be required to, honor its legal commitments."
All parties met yesterday with the mediator in closed-door, all-day meetings, for the first round of settlement discussions. They agreed to meet again in two weeks to conclude what has become a very ugly public battle.
In Pearlman and BMG's initial lawsuit, filed Oct. 12 in Orlando, they aimed to obtain a court order to prevent 'N Sync from existing at all, unless the group fulfilled its contract obligations with BMG's RCA label and Pearlman's Trans Continental Records.
Yesterday's application was simply to stop the group from releasing a third album -- causing some music insiders to wonder why the demands were changed.
"Pearlman is no dummy. He'll still make money if they're out performing. So why would he want them to cease to exist?" said one source.
According to an attorney for 'N Sync, the boy band can "for now, go ahead and release their record with Jive."
*N SYNC vs. Lou Pearlman
It seems that round one of 'N Sync's legal fight with estranged manager Louis J. Pearlman goes to the boy band.
'N Sync and Pearlman were present (and dutifully ignored each other) in an Orlando courtroom on Wednesday as things got rolling in the $150 million lawsuit that BMG Entertainment and Pearlman's Trans Continental Media filed against 'N Sync and its new record label, Jive Records, last month (see "'N Sync Hit With $150 Million Lawsuit").
The boy band scored an early legal victory as Judge Ann Conway denied Pearlman's request for an injunction against 'N Sync for now and said she will be inclined to deny the injunction. According to an attorney for the group, the judge is studying the facts further, but 'N Sync for now is free to continue their recording career with Jive Records.
However, Pearlman and BMG's lawsuit against 'N Sync hasn't been thrown out, and following the hearing, both parties met with a magistrate to discuss a possible settlement.
In one strange turn of events, Pearlman's lawyer admitted that he did not know how much the ex-manager had actually made off the group, but that the figure was at least $7 million. Since 'N Sync has made only $7 million collectively, that would mean Pearlman's portion of the cut is at least 50 percent and not the one-sixth he had originally claimed.
-- Kara Manning
from mtv.com
'N SYNC COURT JUDGE'S FAVOUR
'N Sync have triumphed in the first leg of their $150 million battle with their former manager Louis J. Pearlman who the boys are battling for control over the use of the name, 'N Sync.
'N Sync's Joshua Scott Chasez has accused Pearlman of "hugging us and calling us 'family' [while] picking our pockets, robbing us of our future, and even endangering our health." There was certainly no love lost when the band met their fallen father figure in court on Wednesday (November 25) to answer Pearlman's accusation that the band and their new label Jive Records were illegally using the name.
Whilst the judge dealing with the case did not throw it out of court, she did note that since Pearlman had enjoyed earnings from the band in excess of $7 million whilst the band themselves had made that same amount collectively, his claim to have taken a 1/6 cut was clearly false. Thus, Judge Ann Conway denied Pearlman's request for an injunction against the band. The case continues.
dotmusic - News - 'N Sync court judge's favour