Lessons From The Drake/UMG Lawsuit

UMG’s acquisition of multiple labels creates competition for internal resources, potentially making artists like Drake collateral damage.

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The hip-hop rivalry between Kendrick Lamar and Drake may be initially surprising to some, considering the two rappers are represented by the same label: Universal Music Group (“UMG”). Even more surprising may be Drake suing his label while still under contract.

However, viewed against the backdrop of significant shifts in the music industry, from streaming revenue gaps to evolving representation deals, this feud feels less like an outlier and more like the result of longstanding tensions. The friction reflects deeper, systemic challenges that have strained artist-label relationships across the board.

Label Consolidation and Artist Representation

Label combinations like these are becoming increasingly common, as major players seek to consolidate market share. UMG acquired Kendrick Lamar’s label Interscope in 1999, and subsequently Aftermath, distributed via Interscope. In 2000, UMG acquired Republic Records, which Drake has been signed to via Young Money and Cash Money. Through these endeavors, UMG has claimed a dominant in the market, with an ownership interest in over half of the Billboard Hot 100 tracks for 2023.

In his legal filing, Drake draws parallels between the nearing expiration of his UMG contract and their alleged support of the defamatory tracks against him, stating: “… UMG anticipated that extending Drake’s contract would be costly. By devaluing Drake’s music and brand, UMG would gain leverage to force Drake to sign a new deal on terms more favorable to UMG.” His legal team further speculated that UMG’s alleged practices were prompted by pressure to fulfill their short-term deal with Lamar. The filing asserts: “On information and belief, Lamar signed a short-term deal with UMG to see if UMG could prove its value to him – to promote him more effectively than any other music company could – in a compressed timeframe. If successful, Lamar would continue his relationship with UMG through a new, longer-term contract.”

The internal dynamics between Interscope and Republic Records within the UMG system show how label consolidation affects artist representation. When multiple labels under the same corporate umbrella compete for internal resources and playlist placement, artists can become collateral damage in power struggles. Even successful acts may find themselves navigating bureaucratic bottlenecks to sustain visibility and support.

The Drake and Kendrick Lamar issue is not isolated. Other high-profile disputes have also highlighted how artists can lose control over promotion, ownership, or even the public narrative around their work. And even for artists with powerful teams, deal terms can tilt heavily in favor of labels. A Citi GPS report from 2018 found that artists captured just 12% of the music industry’s total revenue – a figure that, even seven years later, remains a stark benchmark of how little value flows to the people making the music.

These moments underscore how vulnerable artists can be in complex industry M&A environments. Even the most prominent names are not immune to losing control of their masters or momentum (even unintentionally) as corporate priorities shift.

Emerging Artist Vulnerability

That dynamic is even starker for emerging and independent artists. Without the leverage of celebrity power like Drake, newer artists are often forced to choose between retaining control or having any real chance at visibility.

As Drake’s team argues: “UMG uses this size and dominance to convince artists to sign with its record labels. Because of streaming, ‘it is more of an uphill battle than ever before to capture the audience’s attention amongst a sea of other songs.’”

In other words, sheer volume now works against discovery. UMG’s dominant market share, combined with the daily flood of new content on DSPs, means that artists who aren’t plugged into major label systems face immense visibility challenges.

Adding to that pressure, Goldman Sachs has estimated that superfans (the top 20% of listeners) can account for up to 70% of streaming revenue for some artists. That kind of engagement concentration raises the stakes for playlisting, algorithmic momentum, and major-label attention, which are all harder to access from the outside.

And despite the growth of DIY platforms, major labels aren’t fading. UMG and its peers still control over 75% of the global recorded music market (Though exact market share varies by region, the three majors continue to dominate globally). That dominance makes it difficult for independent artists to truly operate on a level playing field, even with distribution tools and social reach.

This imbalance doesn’t just apply to streaming. It extends to touring, marketing, sync licensing, and virtually every other downstream opportunity. When those pipelines are structured with majors in mind, opting out becomes a far riskier bet.

Building Better Protections

For independent artists, navigating these challenges takes more than creative vision. It takes willingness to engage with strong contracts, legal clarity, and the willingness to push back. Knowing your rights, protecting your IP, and negotiating the terms of distribution and ownership upfront is critical. Labels can provide powerful amplification, but that often comes at the cost of long-term leverage.

Before signing anything, artists should consider whether the trade-off is worth it and whether there are more protective paths to scale their career.

And with the Department of Justice investigating the Live Nation–Ticketmaster merger, the tide may someday turn against unchecked industry consolidation. If similar scrutiny hits the recording sector, big labels could soon face pressure not just from their talent, but from federal regulators as well.

Legal Entertainment has reached out to representation for comment, and will update this story as necessary.