COMPETITON / ANTI TRUST
Live events sector
America’s newest performing rights organisation Global Music Rights (GMR) is facing a law suit brought by the US radio industry in a move to force the rights agency to submit to independent arbitration to set the rates broadcasters must pay to play the songs it represents
In the US, the big two collecting societies representing the performing right in compositions (ASCAP and BMI) are regulated by so called ‘consent decrees’ which are in themselves somewhat controversial. However, there are also two other smaller performing rights organisations in the US – SESAC and the much newer Global Music Rights – which sit outside the consent decrees, arguably giving those organisations much more flexibility. And GMR has some impressive clients naming The Eagles, Pharrell Williams, Boston, Foreigner, John Lennon, Smokey Robinson, Chris Cornell, and George and Ira Gershwin amongst its performing right clients. GMR was founded by artist manager Irving Azoff in 2014.
Confirming its litigation last week, the RMLC said: “GMR, a public-performance-right licensing agency, is distinguished from ASCAP and BMI, in particular, in that it is a privately-held, for-profit firm that has created a bottleneck to, and artificial monopoly over, the works in its repertory. Unlike SESAC, ASCAP and BMI, which are all now subject to some form of rate regulation that acts to prevent monopoly pricing, GMR has thus far managed to avoid similar limits on its monopoly pricing”.
The radio group went on to say that its lawsuit “alleges that GMR has created and maintained an unlawful monopoly over the works in its repertory. RMLC seeks injunctive relief, requiring, among other things, that GMR submit to a judicial rate-making procedure comparable to what the consent decrees governing ASCAP and BMI impose”. The RMLC has “also filed a motion for a preliminary injunction to prevent GMR from charging radio stations monopoly prices for a GMR licence while the litigation is pending”.
The Chair of the RMLC, Ed Christian, has said that the law suit has arisn because its members had not been able to negotiate what its considers reasonable rates with GMR, telling reporters: “Resorting to litigation is never a first option for the RMLC. This legal process will undoubtedly prove to be taxing in terms of the amount of labour and expense involved. Yet, we feel that GMR’s exorbitant fee demands are out of balance with their competitors and would do irreparable harm to our industry and this has left us with no other alternative”.
The Radio Music License Committee (“RMLC”) represents the interests of the commercial radio industry (some 10,000 commercial radio stations) on music licensing matters. It is structured as a non-profit Tennessee corporation based in Nashville. Its Directors, who volunteer to serve without compensation, “reflect a diverse group of station owners and management”.