Blue Man Group to pay more than $3M to end royalty dispute

Ian Pai always felt, he said, that he had played a core role in the success of the Blue Man Group, an avant-garde performance ensemble whose members appear as bright blue characters and use unorthodox instruments to create raw percussive music.

He had worked with the ensemble in its early days, he said, serving as its music director for shows in several cities and helping to compose some of its music, build sets and create the group’s distinctive instruments, constructed from PVC pipe.

But years after the group’s ascendance, which included an off-Broadway run of more than 20 years, a Grammy-nominated album and annual revenue often estimated at $100 million, Pai said he had determined that the payments he was receiving for what he termed his contributions of “musical compositions and creative work” were not what he deserved.

So he sued in 2016, saying he felt betrayed by the group’s founders.

Court records indicate the suit has now been settled with an agreement in which the Blue Man Group will pay Pai more than $3 million to resolve his claims. As is common in lawsuit settlements, neither side would discuss the specific monetary figure or other terms of the agreement that was reached in April to end the case in New York State Supreme Court.

A reference to the rough size of the payout was included in a separate lawsuit filed by the Blue Man Group against its insurance company, Ironshore Indemnity, in an effort to force the company to contribute to the settlement.

In his suit, Pai had initially sought $150 million in both punitive and compensatory damages. The court dismissed some of his initial claims, but the case ended quickly after Pai took the stand to testify.

In response to a request for a comment, The Blue Man Group’s lawyer, Toby Butterfield, said today it was “happy to fully and finally resolve Mr. Pai’s claims, which Blue Man Group disputed both factually and legally from the outset.”

Pai’s lawyer, Robert D. Piliero, also reacted favorably to the outcome.

“Ian got to tell his story as the plaintiff,” he said Friday. “The defendants raised previous offers to the point where we could not refuse.”

Blue Man Group achieved wide renown as a cultural institution and a global brand beginning in the 1980s when the concept was hatched on Manhattan’s Lower East Side. The group’s success in New York spawned shows in multiple cities, appearances on “The Simpsons” and wax figure likenesses at Madame Tussauds in Times Square.

Compared by one critic to “benevolent aliens — perplexed, faintly anxious and deliriously fond of making both music and a mess,” the Blue Man Group came to be regarded as a must-see for tourists and a symbol of New York, perhaps not quite on the order of the Circle Line or the Rockettes, but a bit hipper.

The group was formed by three friends — Matt Goldman, Phil Stanton and Chris Wink — who came up with an idea for a surreal performance. They began short sets with homemade props at alternative spaces downtown, got their first reviews when they played at La MaMa and in 1991 moved to their permanent home, the Astor Place Theater on Lafayette Street, where they still perform today.

For three years, the original trio were the only Blue Men, performing six days a week. But wanting to expand to other cities, they began training other men (and a few women) for the job. So far there have been more than 100. And cities like Las Vegas, Boston, Chicago, and Orlando, Florida, have permanent Blue Man Group productions.

The group’s New York real estate holdings include the building that houses its theater, a rehearsal space and video editing suite, and a recording studio and instrument creation lab.

Pai, whose lawsuit identified him as a painter, a classically trained pianist and a dancer who had performed at Lincoln Center, was closely associated with members of the Blue Man Group in its early days. He said that he helped compose many of the show’s wordless songs and came to view the original members as friends, joining them on vacations and attending one of their weddings.

Although he had received hundreds of thousands of dollars in royalties over the years, he said he discovered in 2014 that he had been paid at an amount, 1 percent of the box office. That amount, he said, was far below the industry standard for what he viewed as his level of contributions.

Though the specific monetary figure has not been revealed, the Blue Man Group said in its court papers in the separate insurance case that it had agreed to pay “an amount greater than the policy limits of $3,000,000.”

The insurance case is continuing. The Blue Man Group argues in its complaint that its insurer, Ironshore, initially would not extend coverage, saying Pai’s suit echoed claims he had made in a 2014 letter that had not been reported to the insurance company at the time.

Later, the insurer agreed to pick up 70 percent of the cost of the Blue Man Group’s defense, but only a small portion of the settlement figures under discussion at the time.

A lawyer for the insurance company did not respond to a request for comment.