Tuesday, 09 June 2015 13:03

Snoop Dogg Sues Beer Firm Over Unpaid Fees

Snoop Dogg has issued a legal claim against brewers Pabst for monies he believes are owed after his licensing deal went sour according to an article on the Associated Press.  Snoop, whos real name is Calvin Broadus Jr, signed a three year deal with Pabst in 2011 to be the face of their new Blast drink and received a cool $250,000 down payment.  With a further $20,000 due for every tenth mention of the beer on social media, at his concerts or during TV appearances.

Snoops legal counsel claim that in addition to the above fees, the agreement also entitled him to a serving of the sale price should Pabst sell the business before January 2016, plus an undisclosed amount in royalties on every case of Blast sold.

In his law suit filed in Los Angeles Snoops lawyers are seeking 10% of the net sale price paid to Pabst for its Colt 45 Malt beer brand.  The sale of Pabst to to beer entrepreneur Eugene Kashper and investment firm TSG Consumer Partners went through in November of 2014 but no purchase price was announced at the time of the sale.

The devil is in the details

The rapper's lawyer Alex Weingarten claims in the lawsuit that the beer company was sold for $700m (approximately £455m) according to reports.  The claim rests on an apparent "phantom equity clause" in the rappers contract, which allegedly states in its subsection

a): "In the event that the Blast by Colt 45 brand or the entire Colt 45 brand family is sold ... during the 3-year Term of the Agreement or within two (2) years following the end of the Term, Consultant [i.e. Mr. Broadus] will receive 10% of the net price of such sale."

The complaint notes there is an exception for sales of the company or exchanges of its stock among existing stockholders, but says the "exception clause" doesn’t apply to the sale in November 2014.

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Trouble brewing...

It is alleged that Pabst refuses to pay Snoop anything in connection with the sale. "Despite the sale, Pabst has taken the (very convenient) position that no transaction has occurred such that Subsection (a) of the Phantom Equity Clause would be triggered," states the complaint filed with the court.

The complaint is for causes of breach of contract, breach of the covenant of good faith and fair dealing, conversion and intentional interference with contractual relations.

A Pabst spokesperson says in a statement to The Hollywood Reporter, "Pabst Brewing Company has been under new ownership and new management since November 2014. We have not been contacted by Snoop Dogg or his representatives about this issue. We are investigating the matter and would be happy to talk to Snoop or his representatives to try to get to the bottom of this."

Given that the case rests on the sale of the brand to new woners and the statement from Pabst regarding the claim, our advice to Snoop would have been to try an amicable approach first as it may have been an issue that could have been solved in negotition rather than litigation.  But if nothing else this case shows that sometimes even superstar rappers need a good lawyer to get paid.

We will be watching this case with interest.

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Image "snoop dogg" by Chris Trotter shared under the Creative Commons Attribution-NoDerivs 2.0 licence.


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