Why Is Megan Thee Stallion Suing Her Record Label?

Today, Megan Thee Stallion released her latest project, Suga—with some assistance from a court order. The Houston rapper, who turned “Hot Girl Summer” into a ubiquitous viral meme ahead of last year’s mixtape Fever, has spent the last several days in a public contract dispute with her label, 1501 Certified Entertainment, and its CEO, former baseball star Carl Crawford. On Sunday, Megan claimed that 1501 was blocking her from releasing new music, and a day later, a Texas judge granted her a temporary restraining order against the label, allowing her to release Suga. But the courtroom drama is likely just beginning.

Megan Thee Stallion, whose real name is Megan Pete, didn’t only ask Houston’s Harris County District Court to help greenlight the release of Suga. Simultaneously, in a lawsuit filed on March 2, she asked for at least $1 million and the termination of her contract with 1501, claiming that the label has engaged in fraud, breach of contract, negligent misrepresentation, and other violations of civil law. The legal battle brings to a head tensions that have been playing out in interviews and social media for months.

Represented by Richard Busch, the lawyer who helped Marvin Gaye’s family triumph over Robin Thicke and Pharrell Williams in the “Blurred Lines” copyright dispute, Megan Thee Stallion essentially claims that Crawford duped her into signing an unfair deal at a time when she didn’t know any better. Megan, now 25, was “young and naive” when she signed to 1501 in early 2018, according to court documents filed by her team, and Crawford and 1501 “took complete advantage of her and fraudulently induced her to enter into the contract.” That contract, the documents allege, is “not only entirely unconscionable, but ridiculously so.”

In interviews, Crawford has fired back. He told Billboard on Tuesday that Megan’s lawsuit was “a whole lie.” Below, read our rundown of the case each side is making—with analysis from legal experts—and what it might mean for Megan Thee Stallion’s recording career going forward.

The Deal

The exhibits Megan’s team filed in court include a copy of her contract with 1501. According to the terms of the deal, she’s entitled to 40 percent of her recording profits, while the label gets 60 percent. That’s lower than the 50-50 split that is routine in the industry, according to Brandon Clark, a music copyright lawyer, “but it isn’t so low that it would immediately be shocking.” (Her lawsuit claims that her actual share of recording profits is 26 percent, after a fee taken by 300 Entertainment, a distributor for 1501.)

The contract is structured as a “360 deal,” an increasingly common music industry arrangement in which artists also share profits from sectors that labels aren’t traditionally involved in. In this case, 1501 takes a 50 percent share of Megan’s publishing, 30 percent of her touring income, 30 percent of her merchandising, control of her merchandising rights, and a cut of such “passive income” as sponsorships and endorsement deals. The label’s accounting of this income, Megan’s lawsuit alleges, has been “purposefully and deceptively vague.” Music lawyer Mattias Eng tells Pitchfork he would advise unsigned artists not to sign a 360-degree deal until they have the leverage to negotiate for benefits in return.

Despite Crawford’s claims to Billboard about the untruth of the claims in Megan’s suit, he acknowledged the 60-40 recording royalties split as well as the 70-30 touring income split. He denied any involvement in drafting the deal, assigning responsibility to two others: Megan’s late mother, who managed the rapper’s career until her death in March 2019, and T. Farris, a business associate of 1501.

The History

Last September, Megan Thee Stallion inked a management deal with Roc Nation, with T. Farris as her road manager. The rapper’s decision to align with JAY-Z’s entertainment powerhouse seemed to drive a wedge between her and Crawford. On the same day that Megan announced the Roc Nation signing, Crawford appeared in an Instagram photo with Rap-A-Lot CEO J. Prince, which Prince captioned, in part, “The music business is a business filled with sharks and cut throat people.”

“We all had a plan of where we wanted to be,” Crawford said in an interview the following month. “She’s where she’s at, T. Farris is where he’s at. Why I couldn’t be where I wanted to be? For some reason, it’s like they wanted me out.” He added that he was “past irritated” with the circumstances, and was no longer on speaking terms with Megan’s team.

The conflict heated up just before the recent court filings. Megan claimed that 1501 was blocking her from releasing new music in an Instagram Live video on March 1. Crawford hit back with another photo of himself and Prince, writing, “At a time when loyalty is at an all time low it’s nice to be link with [J. Prince] who is steady teaching me how to move in this cutthroat industry.” (Crawford has said that Prince is acting as a “mentor” to him through the conflict.)

The Lawsuit

Megan filed her lawsuit on March 2, and very quickly won a battle in preliminary rulings. That day, a Harris County District Court judge approved her request for a temporary restraining order, which prevented 1501 from interfering with Suga’s release. Two days later, another Harris County District Court judge gave her another boost, denying 1501’s request to dissolve the temporary restraining order. Megan celebrated the latter victory on Instagram, writing, “I will stand up for myself and won’t allow two men to bully me, I am NO ONES PROPERTY.”

But the case for terminating her contract with 1501 altogether could be more contentious. Her lawsuit alleges that the deal is so unfair it should be scrapped, that 1501 has broken the contract in ways that caused her “immediate and irreparable injury” and misrepresented its ability to promote her music. The label also falsely led her to believe T. Farris was Crawford’s business partner when he was actually an outside consultant, according to the lawsuit. But the sort of fraud she’s accusing Crawford of committing when he signed her to 1501 is difficult to prove in court.

“The music and entertainment industries often include some level of puffery, of inflating of the truth,” says Clark. He laid out a long list of qualifiers Megan would need to meet in order to prevail in court: “She’s going to need to prove that those false statements went beyond normal overstatements, that 1501 knew those statements weren’t true, that they were said in order to get her to sign with them, that she signed with them because of those statements, and she has since been injured by that relationship.”

Megan’s contract with 1501 is “extremely onerous,” says Eng, but it will be “up to the judge and jury to decide whether it’s so onerous that it’s unconscionable.” Owen Sloane, a music lawyer, says the lawsuit “sounds like a tactic to secure a renegotiation.” In other words, the two sides might end up settling, as often happens in these sorts of cases, with Megan Thee Stallion getting at least some of the changes she wants made in her contact. The next hearing in the case is set for March 13.

Originally Appeared on Pitchfork