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Last Updated: Tuesday, 26 April, 2005, 09:31 GMT 10:31 UK
Universal label 'defrauded stars'
Nelly
Rapper Nelly has been named as a "defrauded" musician
Record company Universal is being sued by two US music promoters amid claims the label "defrauded" some of its biggest stars, including rapper Nelly.

Promoters National Music Marketing and Majestic Promotions are seeking $100m (52m) from Universal, claiming it forced them to submit false invoices.

Universal used these to make top names such as Nelly unwittingly pay for other artists' promotion, the promoters say.

They also claim they were "bullied" by Universal, which has yet to comment.

The legal action accuses the music company of fraud, racketeering, trade libel and breach of contract.

I'm sure Nelly is not going to be too happy that they were taking money out of his promotion budget
David J Cohen
Promoters' lawyer
The promoters' lawyer, David J Cohen, said: "What [Universal] was doing was defrauding their artists - some of their biggest artists.

"I'm sure Nelly is not going to be too happy that they were taking money out of his promotion budget to pay for promotions for other artists - money that he had to pay back from his royalties."

The promoters also claim Universal told radio stations not to do business with them when they refused to submit fraudulent invoices.

National Music Marketing was forced to cease trading last year as a result of Universal's actions and Majestic was "hanging on by a thread", Mr Cohen said.

'Bribes'

The move comes in the wake of an investigation into record companies paying US radio stations to play their songs.

The two promoters have been contacted by New York State Attorney General Eliot Spitzer, who is conducting that investigation.

Mr Spitzer has served subpoenas on major record labels including Sony BMG, Warner, EMI and Universal.

US law prohibits bribes to radio stations to play songs unless the practice is made public. But record promoters have acted as middlemen for decades to win labels more airplay.


SEE ALSO:
Court secures classical copyright
06 Apr 05 |  Entertainment
Music bosses head royalties fight
26 Jul 04 |  Entertainment
Rapper Nelly sued over label name
30 Apr 04 |  Entertainment


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