Hedge-fund manager Steven Lamar says he deserves four percent of Beats Entertainment's royalties.
Recently, Dr. Dre and Jimmy Iovine both became billionaires after their Beats Entertainment company was bought by Apple for $3.2 billion, but as anyone who's been watching HBO's Silicon Valley knows, there are always those who think they deserve a piece of that new money pie. According to The Hollywood Reporter, Dre and Iovine are being sued by hedge-fund manager Steven Lamar, who claims that he is one of the company's co-founders and deserves four percent of its profits.
Lamar says in 2006, when he was the president of SLS International (another audio equipment company), he had the idea of celebrity-endorsed headphones, which he took to Iovine, the co-founder of Interscope Records. According to Lamar's suit:
“Lamar’s concept envisioned a partnership between technology that would provide a superior audio experience and an iconic product design and brand identity promoted by a well-known and respected music artist. Iovine proposed that Dre be the celebrity musical artist to endorse the headphones.”
Lamar also claims that he introduced Iovine to people at Apple in 2006, with the hopes of getting the headphones distributed at Apple stores. When Iovine decided to go with Monster LLC as the distributor, a contract was drawn up that gave Dre and Iovine 20 percent of royalties and Lamar five percent. After a short, relatively inconsequential suit later in 2006, Lamar's share was cut to four percent.
As the suit now stands, Lamar is alleging that he hasn't gotten any money from his partnership with Beats, saying that Dre and Iovine breached the terms of their settlement agreement.