UMG Secured a Massive Settlement from NBCUniversal After the 2008 Fire — But Shared Nothing Back With Artists

The crisis surrounding UMG’s handling of the Universal Studios Fire of 2008 is worsening with news of a massive settlement in 2009.

As Universal Music Group faces the specter of dozens of lawsuits stemming from its mishandling of the 2008 Universal Studios fire, another buried fact has surfaced.  According to details unearthed by multiple sources, Universal Music Group secured a sizable settlement from NBCUniversal in 2009, based on Universal Studios’ negligence leading up to the 2009 fire.

Both media conglomerates share the ‘Universal’ moniker, but they haven’t been part of the same umbrella since 2004.  Still, there were obviously some shared operations, including media asset storage.

The settlement followed four years of litigation between the parties, which apparently ended in a confidential high dollar settlement.  That settlement was most likely very substantial, though as far as we can ascertain, none of that money was redistributed back to artists whose masters were affected by the blaze.

Last week, an investigatory piece by the New York Times revealed that roughly 500,000 priceless master recordings were destroyed in the 2008 fire.

At the time, Universal Music vehemently denied that any substantial damages had occurred, while flat-out lying to major news outlets like the New York Times. the Los Angeles Times, Deadline, and others.  According to the Times, an internal email from Universal PR exec Peter Lofrumento described the fabrications fed to the major pubs, while gloating about misleading LA Times reporter Jon Healy into misreporting the situation.

King said to expect legal filings as soon as this week.  Industry attorney Ed McPherson is also gathering information in preparation for possible litigation against Universal Music Group.

Digital Music News is currently canvassing around in search of relevant court documents.  According to LA Times journalist Randy Lewis, paperwork was filed with the Los Angeles Superior Court back in 2009.  But those filings may have been redacted, given the confidential nature of the settlement.

Attorney Howard King told the Times that the rumored settlement figure is ‘ridiculous,’ but affected artists were none-the-wiser.  “We’re hearing ridiculous numbers,” King said.   “That would be a good fact to find: how much Universal Music got and then forgot to report to their artists, and to share with their artists.”

Meanwhile, Universal Music Group Chairman/CEO Lucian Grainge has remained entirely quiet on the matter.

Grainge took the reins in 2011, years after the blaze occurred.  But multiple sources have noted that the disastrous damage created by the fire was well known inside UMG.  Now, 11 years later, UMG is facing a serious fallout with dozens of artists and their estates, with a serious PR and artist relationship nightmare just getting started.

Despite an obvious cover-up in 2008, Universal is still trying to downplay the issue.  The label unsuccessfully attempted to discredit the New York Times, while essentially denying (again) that any substantive damage had occurred.  Whether the label decides to reverse that approach is unclear, but highly doubtful.

Exactly how that impacts UMG’s pending sales process is unclear.  UMG’s parent, Vivendi, has been discussing the sale of a 50% stake, with the label fetching Wall Street valuations as high as $50 billion.

More as this develops.