SoundExchange sues SiriusXM for more than $150M in unpaid royalties

SoundExchange has filed a lawsuit against SiriusXM to recover what it says are substantial unpaid royalties and late fees owed under the Copyright Act for the use of recordings on the satellite streaming service.

SoundExchange estimates that SiriusXM has wrongfully withheld more than $150 million over the past several years.

The lawsuit, filed today with the United States District Court for the Eastern District of Virginia, alleges that SiriusXM improperly manipulated federal regulations to create an artificially low calculation of “revenue” a percentage of which it pays in creator royalties.

“excessive and unjustified”

According to the suit, SiriusXM did this by ascribing “excessive and unjustified value” to its webcasting services sold within bundled packages and removing that value from the satellite radio royalty pool. 

In addition to the $150 million, SoundExchange says that there are “other unpaid royalties revealed in an audit of SiriusXM that showed the company had taken certain other improper deductions to reduce its calculation of satellite radio royalties.”

The suit also seeks compensatory damages, late fees, and an injunction preventing SiriusXM from “continuing to use inappropriate revenue calculations on its satellite radio payments going forward.”

Reaction

“In recent years, we have viewed SiriusXM as a willingly lawful and compliant company that shares our desire for a robust streaming marketplace,” said SoundExchange CEO Michael Huppe in a statement. “But SiriusXM has and continues to wrongfully exploit the rules to significantly underpay the satellite royalties that it owes.”

MORE: SiriusXM responds to new $150M SoundExchange lawsuit

Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.