Why Megan Thee Stallion Is in a Heated Legal Battle With Her Label

When she was just 20 years old, Megan signed her first record deal with the independent label 1501 Certified Entertainment, which was owned by former Major League Baseball player Carl Crawford. Soon after, she also signed with 300 Entertainment as the first woman rapper on this subset of Warner Music’s roster.

In a now-deleted Instagram, Megan wrote, “Hotties!!!! I know y’all have been begging for this moment just as much as I’ve been waiting on. Many deals were presented to me but this just felt like the right move and now I’m officially signed THEE MF HOUSTON HOTTIE IS COMING TO SHUT SH*T DOWN.”

Megan signed with JAY-Z’s label, Roc Nation, as her management company in 2019, according to The Fader. At the time, she shared a photo on Instagram with JAY-Z announcing the news. The since-deleted post read, “I would like to announce that I am officially apart of the @rocnation fam. The grind don’t stop!”

In 2020, Megan revealed on Instagram Live that she had attempted to renegotiate her contract with 1501 Entertainment but was denied the opportunity to do so and barred from releasing her new music (her album “Suga”), according to Pitchfork. Megan sued in response, alleging her contract wasn’t clear to her and that 1501 failed to “explain the full nature of the contract” when she signed it. She asked for $1 million in damages and termination of the contract.

In her lawsuit, Megan claimed her contract with 1501 splits her recording income with 60 percent going to 1501 and the remaining 40 percent going to her. However, she claimed payment for engineers, featured artists, mixers, and remixers also comes out of her cut, which greatly dips into her take. Additionally, the contract reportedly gives 1501 and Crawford exorbitant cuts out of every aspect of her business dealings, according to Pitchfork, including 50 percent of publishing, 30 percent of touring profits, 30 percent of merchandising (on top of control of all merchandising rights), and a cut of any sponsorship deals.

Crawford claimed in a statement to Billboard that while the 60/40 split on profits is accurate, Megan wasn’t paying the other parties out of her cut. He also claimed 1501 never tried to block the release of her music.

Nevertheless, a Texas judge granted Megan a temporary restraining order, which allowed her to release new music and keep 1501 from threatening her on social media.

After her temporary restraining order was put in place against 1501 Certified Entertainment, Megan released her EP “Suga.”

According to court documents obtained by Billboard, Megan sued 1501 a third time in February 2022, claiming it was hindering her career by trying to lock her into her contract. As part of the Minimum Recording Commitment in her contract, Megan has to release a certain number of albums to satisfy the contract. In her lawsuit, she claimed 1501 was classifying her album “Something For Thee Hotties” as a mixtape, so she would be stuck in her contract releasing more music under 1501 for longer.

Megan alleges she wasn’t told up front that “Something For Thee Hotties” wouldn’t be an album and that 1501 didn’t inform her it didn’t qualify as an album until two months after its release. The label told Billboard she was informed. “She can’t just deliver us an album that we did not approve and then claim it satisfies her recording contract,” 1501’s lawyer Steven M. Zager said in a statement. “It doesn’t, and the contract is pretty clear about that.”

Meanwhile, in a statement via Billboard, Megan’s lawyers said, “1501’s new position, taken months after the album’s release, is clearly a ruse in an effort to try to take further advantage of Pete, at great expense and not in good faith,” her attorneys wrote at the time.”

The reason Megan is likely fighting for this classification so hard is because, according to Complex, she only owes 1501 one more album under her current contract if “Something For the Hotties” is counted as one.

A month after filing her lawsuit, 1501 filed a countersuit asking the court to find in its favor when it comes to the classification of “Something For Thee Hotties” as a mixtape, according to Rolling Stone. It claimed “Something For Thee Hotties” didn’t include enough original material to classify as an album under the terms of her contract. It also asked for damages, alleging Megan repeatedly breached her contract.

Megan claims the only requirement for a release to be classified as an album under her contract is that it’s over 45 minutes in length, which “Something For Thee Hotties” was.