Global Music Rights, commonly known as GMR, is the newest Performing Rights Organization (PRO) in the US music business, licensing public performance rights to musical compositions of songwriters as diverse as various members of the Eagles to Pharrell Williams to George Gershwin. As we wrote here, in December, they offered a temporary license to the radio industry to allow radio stations to play their music if the stations pay a royalty reportedly based on a percentage of what stations pay to ASCAP and BMI. That license, which was accepted by many radio stations, expires at the end of September. Many stations were concerned as to what would happen on October 1, and whether they could continue to play GMR music. This week, that question was answered when it was announced that GMR has offered to extend the license for another 6 months at the same rates stations are now paying.
While this extension may answer the question of what happens on October 1, it certainly does not resolve all GMR issues. It seems pretty clear that, unless there is a major breakthrough, GMR and the Radio Music License Committee (the organization that negotiates performance royalties for commercial radio operators) will not come to an agreement on rates before the end of September. As we wrote here, RMLC has sued GMR, asking that a court make them subject to an antitrust consent decree much like SESAC where rates, if they cannot be voluntarily negotiated, would be set through arbitration (see our article on the results of the recent RMLC-SESAC arbitration here). GMR has countersued (see our article here), and litigation continues as it may well for years absent a settlement.
In the interim, many stations faced a quandary – they wanted to play GMR music without facing a possible copyright infringement suit, but they thought that the rates were too high. The interim license offered them an opportunity to protect themselves, and preserve at least some argument that, as the license is an interim one, they were not agreeing with the rates being charged but were paying to avoid litigation. RMLC issued a statement on this extension yesterday, essentially acknowledging that it asked GMR to extend the license and that the extension until March 31, 2018 has been offered. RMLC noted that GMR had initially indicated that it would not license stations in Pennsylvania (where the litigation is occurring) but it has backed off that refusal.
The considerations as to whether a station should accept the extension are really the same as those that were in place in January when stations were considering whether or not to accept the initial GMR interim license. We wrote about those considerations here and here, and stations should consider those issues, and talk to their own counsel to make a decision as to whether they have any choice but to accept the GMR license extension that has been offered. And watch for further developments as the litigation continues.
I’ll be speaking on these and other music royalty issues at the Texas Association of Broadcasters annual convention tomorrow in Austin, and at the NAB Radio Show, back in Austin in early September.