COMPETITION / COPYRIGHT
Broadcasting, music publishing
Irving Azoff’s performing rights organisation Global Music Rights has a small catalogue of songwriters when compared to the two US giants, ASCAP and BMI, but it is certainly not insubstantial, with songwriter clients including the Eagle’s Don Henley and Glenn Frey, Billy Idol, Jon Bon Jovi, Bruce Springsteen, Drake, Bruno Mars, Bryan Adams, Cathy Dennis, Drake, Don Henley, Ira Gershwin, John Lennon, Pharrell Williams, Boz Scaggs and Smokey Robinson, and music publisher clients including Prince, Imagen Global Music and Universal Television Global Music.
GMR is now squaring up to its latest battle with America’s Radio Music License Committee (RMLC): The radio industry’s RMLC, which has iHeart, CBS, Cox Media and Entercom amongst its members, is now seeking an injunction to force GMR to provide interim licences to radio stations in Pennsylvania.
BMI and ASCAP are regulated by the US Department Of Justice under the so called ‘consent decrees’ which are designed to mitigate competition concerns from ASCAP and BMI’s monopoly position, and provide a mechanism for settling disputes when the PROs cannot agree licence terms with licensees. The final of the four US PROs, SESAC, is not regulated by consent decree, but allows third party mediation on royalty disputes. The American radio industry wants GMR to also accept similar third party mediation – and accuses GMR of exploiting a monopoly, something the rights organisations refutes on the basis it represents a modest catalogue of songs.
Rather than deal with the RMLC, GMR has started doing licensing deals directly with individual radio stations, arguing this is at the dictate of the RMLC citing a RMLC legal filing which said that GMR had to approach “each radio station owner directly and individually to make deals” and added “GMR did so and we’ve entered hundreds of licences with radio stations”. GMR filed anti-trust counter-suit against the RMLC in December in the federal court in Los Angeles arguing that the radio group acts as a cartel to suppress royalty rates.
But in Pennsylvania. GMR said that because RMLC’s lawsuit against GMR was filed with the Eastern District Court of Pennsylvania “we cannot negotiate or enter licences with stations owned by companies headquartered or based in Pennsylvania”, and existing licences to broadcast songs now controlled by GMR expire on the 30th September. The RMLC says that GMR is targeting radio stations in Pennsylvania because they have supported its litigation, and also because the performing rights organisation would rather fight its lawsuit in the Californian courts.
The radio industry group have now said “To this end, the RMLC has asked the federal court in Philadelphia, Pennsylvania to enter a preliminary injunction order preventing GMR from engaging in these overtly coercive actions while the RMLC’s lawsuit proceeds”.
It went on: “Further, the RMLC’s motion requests that the court order GMR to continue to offer interim music performance licences, to those radio stations who elect to take one, on identical terms to those interim licences already in effect for the past several months. That relief would prevent GMR from further inordinate pressure on the radio industry while the federal court resolves the RMLC’s antitrust claims against GMR”.
GMR said in response: “The RMLC’s latest motion is yet another waste of the court’s time and an attempt to bully songwriters into accepting below-market-rate payments for their music. GMR continues to freely offer interim licenses to radio stations; our attempt to offer licenses to stations based in Pennsylvania was rejected by the RMLC itself prior to the filing of this motion. We are confident the court will see through these baseless allegations”.
In related news, SESAC has now reached a new deal with the RMLC, which the PRO claims will result in substantially better rates for its clients that ASCAP’s equivalent agreement from the RMLC’s 10,000 commercial radio stations in the US market. The SESAC rate had been in arbitration with SESAC over royalties since 2015.The three member arbitration panel have now determined the rate SESAC can charge terrestrial radio stations represented by the RMLC for the period between January 1st 2016 and December 31st 2018.
ASCAP signed a voluntary deal with the RMLC in December which covered the five-year period between 2017 and 2021 – an agreement which ASCAP said contained a royalty hike on its previous incarnation, but SESAC was not impressed, and on securing its own deal said “Based on reports that have appeared in the trade press regarding ASCAP’s recent settlement with the RMLC as well as published estimates of ASCAP’s market share, SESAC believes that the rates reflected in its arbitration award are approximately 50% higher than ASCAP’s (the rate the RMLC has been trying to impose on the music industry) and “SESAC has agreed to use commercial arbitration to resolve license fee disputes with the RMLC, whereas ASCAP remains subject to a Consent Decree with the US Department of Justice. SESAC believes that the Consent Decrees impose restrictions that may prevent rightsholders from realizing the fair market value of their works.” John Josephson, chairman and CEO of SESAC Holdings, Inc. said “the panel’s decision is a resounding affirmation of the fact that ASCAP rates in radio do not reflect fair market value.
BMI remains locked in a dispute with RMLC.