The Cranberries say record label stiffed them out of $5 million in royalties

Defunct Irish rock group The Cranberries are accusing their longtime record label of shorting them on millions in royalties, alleging the company pocketed considerable amounts of cash it wasn’t entitled to.

In a lawsuit filed Monday in Manhattan federal court, the group’s three surviving members claim Island Records, a division of the Universal Music Group, improperly withheld a small fortune in digital streaming income, arguing the company paid itself a premium for work it never performed.

The Independent has reached out to UMG for comment.

The Cranberries formed in 1991, and signed with Island two years later. They released their first album in 1993, which went quintuple platinum in the United States and reached No. 1 on the UK and Irish charts. The band’s second album was even more successful, selling 7 million units stateside as the album’s smash single, Zombie, turned the quartet into international superstars. After frontwoman Dolores O’Riordan drowned in a bathtub in 2018, the group disbanded, posthumously releasing their final album a year later.

In 2020, the music video for Zombie became the first by an Irish act to surpass 1 billion views on YouTube.

According to the band’s complaint, a 2021 audit report by accounting firm Prager Metis found Island forking over lower royalty payments from overseas Spotify streams than those coming from the U.S.

“Upon further inquiry, Island Records disclosed that royalties from foreign streams are paid to [the band] based upon 60 percent of the revenue received by Island Records' foreign distributors,” the complaint states. “... Ostensibly, the fees charged by a foreign distributor and/or licensee are intended to cover the costs of marketing, promotion, and distribution of master recordings in foreign territories.”

However, the complaint continues, the music business has changed drastically in the digital era. Today, online streaming platforms handle marketing, promotion and distribution - not record labels - according to the complaint, which pegs Spotify’s take for these services at 30 percent.

Island signed The Cranberries years before the advent of digital music, and it is “excessive” for the label to continue taking 40 percent of foreign streaming revenue for “passively collecting income from digital service providers,” the complaint states.

Instead, according to the complaint, a fee of 10 percent would now be more reasonable. Yet, upon reviewing the audit report the band commissioned, Island “rejected [the] contention that it had underreported royalties.”

On top of the Spotify royalties, The Cranberries say in their complaint that they’ve been underpaid for video streams, as well. With more than 2 billion total plays on YouTube, the net income generated would have come to nearly $10 million, the complaint contends. After YouTube’s 40 percent cut, the band should have received $4.9 million, it says. But, according to the complaint, they only got $930,676, alleging Island “significantly underreported” its revenue attributable to video streams.

The Cranberries, who sued UMG in 2000 and 2003 over royalties they said they were owed, later withdrawing both claims, accuse the company of breach of contract and breach of implied covenant of good faith and fair dealing.

They are asking for at least $1.5 million on the first claim, and a minimum of $3.7 million on the second, for a total of $5.2 million, plus pre-judgment interest and court costs.

The band’s attorneys did not respond to The Independent’s requests for comment.