AceShowbiz - The '90s rock group Lit is taking legal action against Sony Music, alleging that their longstanding contract with RCA Records guarantees them a 50% share of streaming royalties, a clause agreed upon in 1998 when streaming technology was virtually unknown.

The lawsuit, filed on March 2, involves A. Jay Popoff (vocalist), Jeremy Popoff (guitarist), Kevin Baldes (bassist), and the estate of the late drummer Allen Shellenberger. The band gained major recognition for their 1999 hit “My Own Worst Enemy,” which dominated Billboard’s Alternative Airplay chart for 11 weeks and remained on the Hot 100 for 20 weeks.

Despite the song’s enduring popularity, having amassed over 500 million streams on Spotify alone, Lit claims the current royalty rate they receive, set at the standard 14% for digital streams under U.S. law, falls short of what their contract entitles them to.

The core of the dispute lies in a provision within the 1998 RCA agreement that specifies the band is entitled to half of the net proceeds from master use licenses, including “RCA’s license to another person of the right to embody a master recording on a website in a so-called ‘streaming’ format.” This clause explicitly differentiates streaming from digital downloads.

It is unusual that such a clause appears in an agreement from 1998, given that streaming services were practically nonexistent at that time. MP3 technology was invented only five years prior, and platforms commonly associated with streaming, such as PressPlay and Rhapsody, would not launch until the early 2000s. Napster, which focused on music downloading rather than streaming, debuted in 1999.

Nevertheless, Lit maintains the language in their contract is clear and binding. The band asserts they have attempted since 2023 to renegotiate their royalty terms with Sony, but have faced resistance, including what they describe as a “half-hearted defense” of the current rates followed by Sony ceasing communications.

The legal complaint, filed by attorney Chris Vlahos on behalf of the band, states that Sony’s refusal to properly account for streaming royalties under the 1998 agreement has caused damages exceeding $800,000. This figure reflects alleged underpayments from royalty statements covering January 1, 2021, through December 31, 2026.

In addition to the financial damages, Lit argues that the lower reported royalties have had further repercussions, including “artificially depressed” pension plan contributions to SAG-AFTRA and potential threats to the band members’ eligibility for union health insurance coverage.

Speaking to Billboard on March 3, Vlahos emphasized that pursuing litigation was not the band’s preferred route: “This is something that we were hoping we could resolve before having to file a lawsuit.”

Sony has declined to comment on the lawsuit.

This case highlights the challenges artists face in adapting legacy contracts to the evolving digital music landscape, particularly when agreements predate significant technological shifts like streaming.