Latham Advises The Chainsmokers on Groundbreaking NFT Transaction
In a first-of-a-kind transaction for the music industry, The Chainsmokers have announced that they are partnering with Royal (royal.io) to make (or “mint”) 5,000 Non-Fungible Tokens (NFTs) through Royal’s platform. These NFTs will give the band’s fans an opportunity to share music streaming royalty share rights with The Chainsmokers and will also include additional embedded benefits. The NFTs will include, among other perks, a right to a proportional collective of a 1% audio streaming royalty from all 13 songs from The Chainsmokers’ fourth highly anticipated studio album, “So Far So Good.” The NFTs will be given to the band’s biggest fans on a first-drop basis, and will be sellable, tradeable, and transferable to others. In addition, where NFT creators typically obtain a percentage of secondary sales of the NFTs they create, through this deal The Chainsmokers will distribute all such secondary sale proceeds equally to the songwriters on the album.
This transaction is unique in its demonstration of a viable and transparent Web3 method allowing artists, songwriters, producers, and collaborators to share more intimately the music experience and artistic success with fans, and to facilitate their independence and creative control.
Latham & Watkins LLP represents The Chainsmokers in the landmark transaction with a Los Angeles team led by counsel Nima Mohebbi, with partner Ghaith Mahmood and associate Natasha Phillips. Advice was provided on digital asset and Web3 matters by New York partner Stephen Wink and Washington, D.C. partner Barrie VanBrackle; on entertainment, sports, and media matters by Century City counsel Paul Iannicelli; and on other key issues relating to the structure of the transaction by Orange County counsel David Kuiper and Los Angeles associate Nicole Nour. Latham also worked closely on the transaction with counsel at Roberts & Hafitz PLLC.