Downtown Music Holdings Faces New $375 Million Lawsuit Amidst UMG Deal Probe

While Downtown Music Holdings is still being scrutinized for its controversial merger with Universal Music Group (UMG), the large-scale music services company has been hit with a new lawsuit. Blast Off Media is suing Downtown for $375 million, claiming it was cut out of a deal so Downtown could avoid further investigation related to the UMG merger.

The lawsuit:

• Blast Off is officially suing Downtown for breach of contract and fraudulent inducement.

• The two companies entered a distribution deal last August, which ended just over a month later.

• As part of the agreement, Downtown oversaw Blast Off’s relationship with YouTube and took over content management and royalty claiming operations.

• Upon the deal ending, Downtown delisted Blast Off’s music from YouTube’s content management platform.

• The complaint claims Blast Off’s reputation was irreversibly damaged by Downtown’s tactics, and that a YouTube music catalogue worth “$200-$300 million” has been destroyed.

• Downtown argues that the professional relationship was terminated because Blast Off used music in videos that violated YouTube content policies.

What they said:

• Blast Off: “This case exemplifies precisely the type of conduct that opponents of the UMG/Downtown acquisition warned about: a major-label-owned entity destroying an independent operator’s business when it became inconvenient, using pretextual compliance concerns as cover for bad faith economic motivations.”

• Downtown: “Downtown is proud to uphold the highest trust and safety standards on behalf of our clients, our partners, and the broader industry. This includes our role as one of the founders of the Music Fights Fraud Alliance, which was launched to help combat content abuse, including the parasitic exploitation exemplified by Blast Off Media."