Jay-Z May Need To Teach His Business Partners A Thing Or Two About Royalties

The 40/40 Club, the upscale Manhattan sports bar co-owned by Jay-Z, has been hit with a federal lawsuit for not paying performance royalties for the songs spun by its massive sound system:

The popular 40/40 Club, co-owned by Jay-Z and two business partners, has danced around licensing rules to entertain clubgoers with “unauthorized public performance of musical compositions,” according to a lawsuit filed yesterday in Manhattan federal court.

Broadcast Music Inc. led the charge on behalf of Jackson and more than a dozen artists and music publishing companies, seeking unspecified damages for copyright infringement from the club and co-owners Desiree Gonzalez – who has the primary responsibility for operations and management – and Juan Perez.

Jay-Z, whose real name is Shawn Carter, is not named.

Jacko’s “Billie Jean” and “Don’t Stop,” “Thoia Thoing” by R. Kelly and “Gold Digger” by Kanye West, Ray Charles and Renald Richard, were among seven unlicensed songs played at the club during a random visit by a BMI researcher on two nights in March 2006.

Even singer Pharrell Williams, who has frequently collaborated with Jay-Z in the past, was not immune – his song “Touch” was also played without license.

BMI spokesman Jerry Bailey said the company holds the licensing rights to 6.5 million songs – roughly half those played in the United States – and has tried unsuccessfully to license the 40/40 Club since it opened in 2003. The lavish sports bar and lounge on West 25th Street boasts a $4 million multi-level space with dozens of televisions to view sporting events, and several private VIP rooms.

We’re not sure why the club has held out for so long, especially given the fact that roughly half of its gossip-page mentions involve musicians–although it could be another indicator of its pattern of cheapness, at least when it comes to paying people. If only BMI’s complaint involved all Jay-Z songs (or at least one)–the other owners might have at least realized that their holding out was making meetings a little bit awkward.

JACKO VERSUS JAY-Z [NYP]