When 'N Sync announced their plan to ankle RCA for Jive Records, Nipper cried foul -- and Jive may have fatally crossed its own stars, the Backstreet Boys.

By Chris Willman
Updated October 22, 1999 at 04:00 AM EDT

If the Backstreet Boys or ‘N Sync care to look for outside material to cover on their next albums, they might each consider the old Sparks hit ”This Town Ain’t Big Enough for the Both of Us.”

At least that seems like an appropriate theme for the rivalry between the two groups, which has added bizarre new wrinkles to what was already one of the most curious and complicated music-biz stories in memory. It’s a backstreet brawl of a tale that just grew more twisted with the filing of a $150 million lawsuit against ‘N Sync by their former, and possibly still future, label.

The saga began in mid September when ‘N Sync shocked the industry by announcing they’d left RCA Records to join Jive, home to the Backstreet Boys and Britney Spears, a move that, if consummated, would cement Jive’s claims to true teen-pop hegemony. But the Backstreet Boys apparently didn’t want it that way. News accounts indicate that the Boys’ attorneys sent a letter to Jive later in the month threatening to leave the label by any means necessary. The move suggests that the quintet’s distaste for fellow ”boy band” ‘N Sync may run so deep they’d rather risk getting tangled up in litigation than share the roster with a group they reportedly consider second-rate clones.

”It’s dangerous for the Backstreet Boys to give the impression that the reason they want to leave Jive is because of ‘N Sync,” says Johnny Wright, ‘N Sync’s manager, who at one time worked with both groups. ”I’m worried that now the industry and fans will be put in a position to take sides, and that’s detrimental for both acts. If anything, the Backstreet Boys should embrace this situation, because teen pop is taking such potshots [from the press] that a rivalry between the two groups is only gonna further hurt it. And in reality, ‘N Sync’s move to Jive had nothing to do with the Backstreet Boys.” (The Backstreet Boys and their management declined to comment for this article.)

But are either of these chart-conquering quintets — whose combined 1998 record-sale grosses topped $130 million — really moving? Not so fast. A Jive spokesperson, while neither confirming nor denying the Boys’ alleged threat, insists the group is ”signed to a long-term exclusive recording contract, and they’re not leaving.” And RCA is saying much the same thing about ‘N Sync — in court. On Oct. 12, after settlement negotiations broke down, a $150 million lawsuit was filed in Orlando, Fla., against ‘N Sync as well as Jive’s parent company, Zomba. The plaintiffs — BMG, RCA’s corporate parent; Trans Continental Records, which first signed ‘N Sync and licensed the band to BMG; and Trans Con owner Lou Pearlman — are asking the court to prevent the lads and their would-be new label from using the ‘N Sync name or releasing any new product. Besides an injunction, the suit also seeks $100 million in damages and $50 million in punitive damages.

Perceived ironies abound. ”Jive is talking out of both sides of its mouth,” asserts Michael Friedman of the law firm Parker Chapin, attorney for Trans Continental. ”On the one hand, they say the Backstreet Boys can’t walk away from their [Jive] contract; on the other hand, when they look at ‘N Sync’s contract with Trans Con, they make believe it doesn’t exist.”

There’s plenty more at stake here than boyish pride. For the once-flailing, recently red-hot BMG, what’s on the line is the corporation’s second-place standing in domestic-music-market share (trailing only the behemoth Universal, which recently climbed to first place after merging with PolyGram). A complicating factor, to say the least, is that BMG currently has Jive’s U.S. distribution rights and even owns 20 percent of the label with which it’s locked in dispute. That distribution contract expires Dec. 31, leaving Jive free to take its hugely successful teen- and hip-hop-heavy roster elsewhere — a scenario that would almost certainly see BMG falling to third or fourth place in the American market. (Not surprisingly, at this juncture reps from both companies declined to comment.)

It had been speculated that Jive might ask RCA to give up its claims on ‘N Sync as a quid pro quo for renewing the companies’ lucrative distribution deal. But the new lawsuit indicates that RCA has little interest in relinquishing its hottest act since Elvis.

For ‘N Sync and the Boys, it’s mostly about the Benjamins. ‘N Sync believe they’ve only received about a third of their vast record-sales profits because Trans Continental licensed them primarily to BMG in Germany. As a result, when RCA picked up U.S. rights to ‘N Sync, the contract designated the States a “foreign territory,” requiring a much lower royalty payout on the group’s mega-platinum domestic sales.

Wright says that his clients never signed an inducement letter approving the U.S. deal, but Trans Con attorney Friedman insists his side does have letters from all of ‘N Sync’s members (“and in some cases, their parents”), acknowledging and supporting the arrangement. The Backstreeters are said to be similarly displeased with the take from their Jive deal, and the label’s pursuit of ‘N Sync is possibly just the straw that broke the camel’s back.

For Clive Calder — chairman and founder of Jive parent Zomba — hanging in the balance is his status as either industry genius or fool. Some Jive insiders speculate he went after ‘N Sync because of his dissatisfaction with the Boys, who, after signing with new management last year, became less cooperative with the label’s promotional efforts; they figure Calder did not calculate how alienated his cash cow would become when he brought their rivals around. But another source theorizes the CEO was aware the Boys were looking for exit loopholes in their contract, in which case he had little to lose and was “covering his backside” by signing ‘N Sync. If the court denies BMG’s injunction, the Zomba chief could emerge victorious, claiming both major boy bands…or could end up empty-handed, having estranged one with a failed attempt to corral the other.

It remains to be seen whether the Backstreet Boys’ threat to jump ship represents a real desire to leave or is simply contract-renegotiation posturing. But if they really want out, they may be given pause by the legal action just initiated against their rivals. Less than two weeks ago, Wright was predicting that a settlement between Jive and BMG would come in time for ‘N Sync to release a single this fall and their nearly complete new album in early 2000. “In the scheme of things, this is a business,” Wright said then, “and great businessmen are at work right now, and they’ll figure out a way to do business together.” But if anything, it appears they’re in for a court battle after all. And we all know what years tied up in litigation did for the career of an earlier teen-pop king, George Michael. That’s the kind of wait that can turn boys to cranky men.