“A Tribe Called Quest Partners with Royalty Exchange to Launch New NFT That Pays Buyer Ongoing Income” read the press release issued by representatives for Royalty Exchange, an online platform for buying and selling royalty assets. The NFT (non-fungible token) promised “sound recording royalties from iconic and trailblazing hip-hop group A Tribe Called Quest’s first five studio albums” for a period lasting the “Life of author + 70 years.” The auction closed last week, with a user named “Stephen F” placing the winning bid of 40.191 ETH, equivalent to $84,765 at the time of closing.
The share that Stephen F won apparently entitled him to “collect royalties generated from sales, streaming, and sync fees for any of the included albums, as well as the individual singles, released by the group between 1990 to 1998.” According to A Tribe Called Quest member Ali Shaheed Muhammad, however, the group did not partner with Royalty Exchange—or even know that a share of ATCQ’s royalties was up for sale.
Muhammad said the share in question originated from ATCQ’s original contract with Jive Records. He said PPX Enterprises, the management company representing the group, inserted a clause in the contract that entitled PPX to 1.5% of ATCQ’s royalties, which the group did not discover until years later and would challenge in court.
In exchange for signing on for another album at the completion of ATCQ’s original five-album deal, Muhammad said Jive offered to help litigate the case, making “the PPX issue disappear.” According to Muhammad, Jive settled with PPX, which received an undisclosed “share” from the settlement. PPX’s settlement share is what got sold as an NFT, Muhammad said.
Following Ali Shaheed Muhammad’s disclosure, Q-Tip tweeted, “if you are hip hop publication and reported tribe is doing a NFT we aren’t and can you pls retract any story that says so?”
Pitchfork has reached out to representatives for Royalty Exchange, A Tribe Called Quest, and Ali Shaheed Muhammad for comment.