GMR antitrust litigation

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A conditional settlement of the long-running litigation between Global Music Rights (GMR), a relatively new performing rights organization formed to license the public performance rights to certain musical works, and the Radio Music License Committee (RMLC) was announced this week.  The terms of the agreement are confidential, so we can’t comment on the specifics of the deal.  But each commercial radio station represented by RMLC should have received a proposed license agreement from GMR.  The settlement will only be effective if an undisclosed number of radio broadcasters agree to the terms of the agreement by January 31, 2022.  For stations that do not agree by that date, or if not enough stations opt into the agreement causing the settlement to fail, the press release about the agreement says that GMR has made no commitment to extend the current interim license (about which we wrote here) beyond its current expiration date of March 31, 2022.  Thus, stations would need to otherwise negotiate an agreement with GMR, pull GMR music from their stations, or risk a lawsuit for playing the music without permission.  If your commercial radio station did not receive a communication from GMR in the last few days, and if you play any GMR music and you are not covered by an independently negotiated agreement, you should discuss with counsel whether you should reach out to GMR to see why you were not offered a license.  Similarly, if not all your stations were included in the offer you received, discuss with counsel whether to communicate with GMR.

While we cannot comment on the specifics of the deal because it remains confidential, there are some observations that can be made based on the public statement released by RMLC and GMR.  One of the first questions is why the settlement is conditioned on enough stations agreeing to it by January 31.  First, it is important to note that the agreement by RMLC to any royalty with any music rights organization does not bind all commercial broadcasters, or even RMLC’s members, to accept the deals that it has negotiated.  See, for instance, the agreements in the last few years with ASCAP, BMI and SESAC, all of which required broadcasters who wanted to be covered by the negotiated agreement to opt in by a date certain.  While a wide cross-section of broadcast companies is represented on the Board of RMLC which approved this agreement, the Board members do not bind their companies or the rest of the radio industry to accept the terms that were negotiated.
Continue Reading GMR and RMLC Announce Confidential Settlement on Music Royalties for Commercial Radio Stations – Broadcasters Must Decide Whether to Opt In by January 31

Global Music Rights, one of the newest performing rights organization licensing the public performance of musical compositions, has agreed to extend its interim license with commercial radio broadcasters.  That license is set to expire at the end of March (see our article here).  This interim license has been offered and extended for the last several years to allow stations to perform GMR music while GMR litigates with the Radio Music Licensing Committee over whether GMR is subject to any sort of antitrust regulation of the rates that it sets (and GMR’s countersuit over whether the RMLC itself violates the antitrust rules as a buyer’s cartel, by allegedly organizing all the buyers of GMR’s music to hold out for a specific price).  We wrote about that litigation here.  With the pandemic, the lawsuit which should have already gone to trial is likely not going to be heard until possibly next year, as discovery in the case has been postponed until later this year.

Today, the RMLC notified radio broadcasters that GMR will again extend its interim license while the litigation plays out – but GMR wants a 20% increase in the royalties that it receives.  RMLC made clear that this is not a negotiated rate – it is one that GMR has imposed with no input from RMLC.  Stations should expect to hear from GMR about the extension by March 15.  If they do not, stations interested in the extended license should reach out to GMR.  Many stations are confused by this royalty, so we thought that we would provide some background.
Continue Reading GMR Offers to Extend Its Interim License With Commercial Radio Stations – But It Wants a 20% Increase in Royalty Payments

In 2019, the Antitrust Division of the US Department of Justice began a review of the court-administered antitrust consent decrees that have bound ASCAP and BMI since the 1940s.  We wrote about the issues in their review here.  The formal review of these decrees began as part of the DOJ’s broader review of its antitrust consent decrees covering many different industries.  The DOJ received almost a thousand comments on the questions that it asked about the ASCAP and BMI decrees.  It also held public roundtables as well as private discussions with interested parties during its review.  Last week, Makan Delrahim, the outgoing head of the Antitrust Division, presented remarks at a Vanderbilt Law School virtual event where he said that the review would be ending without any proposals for reform.  While the statement notes some of the reforms that were sought by the music industry, it also notes that music users around the country rely on the systems established under the decrees and judge them to be working well.  Mr. Delrahim’s statement says that because of the complexity of the issues and the interruptions caused by the pandemic, no reforms would be offered at this time, but it urged the DOJ to continue to review these decrees on a regular basis – at least once every five years.

This action is significant for broadcasters and other music users as it leaves in place these consent decrees that are the basis on which so many businesses use music in their day-to-day operations.  Given the volume of music they have under license, most businesses do not have an alternative to using the blanket licenses offered by these organizations.  The only alternative would be to license the music themselves which, due to the complexity of the copyright laws and the lack of transparency in music ownership, would be exceedingly difficult for a business where music is but a secondary component to their operations.  Together, ASCAP and BMI provide a license to broadcasters and other music users (including any business that performs music to the public, such as bars and restaurants, retail stores, digital music services, concert venues, hotels and so many other locations).
Continue Reading DOJ Ends its Review of ASCAP and BMI Consent Decrees – For Now…What Does it Mean?

The Radio Music License Committee yesterday told members that Global Music Rights (“GMR”), the performing rights organization that began a few years ago to collect royalties for the public performance of songs written by a select number of popular songwriters (including Bruce Springsteen, members of the Eagles, Pharrell Williams and others who have withdrawn from ASCAP and BMI) has agreed to extend its interim license for commercial radio stations until March 31, 2021. The notice says that GMR will be contacting stations that signed the previous extension (through March 31 of this year) to extend the interim license for another year on the same terms now in place. If you don’t hear from GMR by March 15, the RMLC suggests that you reach out to GMR directly (do not contact RMLC as they cannot help) to inquire about this extension.

As we have written before (see our articles here, here and here), GMR and the RMLC are in protracted litigation over whether or not the rates set by GMR should be subject to some sort of antitrust review, as are the rates set by ASCAP, BMI and even SESAC (see our article here on the SESAC rates). GMR has counterclaimed, arguing that RMLC is a “buyer’s cartel” in violation of the antitrust laws.  Earlier this year, the lawsuits were consolidated in a court in California, where litigation is ongoing (see our article here about the transfer).  In our most recent article about the litigation, we noted that the court rejected motions from each party asking that the other’s claims be dismissed.  Thus, unless there is a settlement, the case will go to trial.  The decision to extend the interim license for a year, instead of the six-month period in previous extensions, may indicate that GMR at least expects that the litigation will continue.
Continue Reading Another Interim License Extension Offered by GMR to Radio Broadcasters – This Time for a Full Year – An Indication of the Status of the Litigation With RMLC? 

Global Music Rights, the relatively new performing rights organization that signed a number of composers of popular songs away from ASCAP and BMI in order to seek higher music royalties for the public performance of their works on radio stations and other media platforms (see our articles here and here), lost one round in its litigation with the Radio Music License Committee in RMLC’s attempt to bring GMR under some sort of rate review under the antitrust laws.  RMLC has alleged that GMR, by combining multiple artists in a single essentially take-it-or-leave-it package, is able to charge rates well above what any artists could receive on its own, thus violating the antitrust laws (see our articles here and here).  This is a theory like the one which lead to an arbitration with SESAC dramatically lowering royalty rates the radio industry pays to that organization (see our articles here and here).  In a decision released Friday, the Judge presiding over RMLC’s case rejected GMR’s arguments that the suit should be dismissed without a trial.   The Judge, in a short three-page opinion, said that viewed in their most favorable light to RMLC (which is the standard used in deciding on such motions), the facts alleged by RMLC were enough to support the claims it made in the lawsuit, so the case will go to trial.

But this is not necessarily a great victory, as the Judge notes that it remains to be seen whether, when the full facts are introduced at the trial and challenged by GMR, these facts will in fact be enough to sustain the claims of RMLC.  A similar finding was made in GMR’s countersuit – arguing that RMLC formed an illegal buyer’s cartel in violation of the antitrust laws by trying to negotiate royalty rates for most commercial radio operators (see our article here on that countersuit).  The Court rejected RMLC’s argument that the GMR suit should be dismissed, finding that there were enough facts raised to potentially support GMR’s claims, though also warning that it remained to be seen if, once the facts were presented and challenged at trial, whether they indeed would sustain GMR’s claims.
Continue Reading Litigation Continues as Court Rejects GMR Motion to Dismiss RMLC Lawsuit – and RMLC’s Request to Dismiss GMR Claims

In the last week, we have received many inquiries from radio stations that received a notice from attorneys for Global Music Rights (GMR) about document production in GMR’s litigation with the Radio Music License Committee (RMLC).  As we have written before (see, for instance, our articles here, here and here), RMLC and GMR have for several years been engaged in antitrust litigation.  RMLC is seeking to impose outside review on the rates that GMR can charge broadcasters for the public performance of the music written by the songwriters that they represent, while GMR argues that RMLC itself violates the antitrust laws by unifying competing broadcasters and preventing them from doing business with GMR.

The recent communications from GMR concern GMR’s obligation to produce documents to the RMLC’s attorneys in discovery in this litigation.  Because RMLC has not been directly involved in GMR’s dealings with radio stations over the interim license agreements (and because RMLC itself does not have copies of the interim licenses that stations entered into with GMR), RMLC’s lawyers asked GMR for the production of these licenses as part of their discovery.  Because the interim licenses contain some confidentiality language, GMR’s recent communications was to let stations know that they are planning to produce those licenses to the RMLC’s attorneys, subject to the Protective Orders that GMR attached to their messages.  These Protective Orders are designed to keep the information in those licenses out of the public record, to be reviewed only by a limited group of people including RMLC’s attorneys and expert witnesses. The GMR communications are asking broadcasters if they have objections to the production of these licenses to RMLC’s lawyers.     
Continue Reading Radio Stations Receive Inquiries from GMR on the Production of Interim Licenses – What Is this All About?

Global Music Rights (most commonly known as GMR), the newest of the major performing rights organizations (PROs) licensing public performances of musical compositions, filed a lawsuit against radio operator Entravision Communications earlier this month. The suit alleges that Entravision failed to pay GMR royalties for the public performance of hundreds of compositions written by GMR songwriters. According to the complaint, GMR sent Entravision several letters over the last few years, notifying Entravision that it was playing GMR music and asking that it enter into a license to play that music. When no license was signed or even requested after these multiple requests, the lawsuit was filed.

The suit seeks $150,000 for each copyrighted work that was allegedly infringed – the maximum set out by the Copyright Act for “statutory damages,” i.e. damages that can be collected even without providing evidence of actual harm caused by the alleged copyright infringement. While Courts have discretion to order far lower statutory damages than those being sought here, even the threat of such damages have been enough to put many of the original file-sharing music sites out of business. Of course, in this case, these damages are being sought not from some company that provides unlimited downloads of unlicensed music, but from a publicly traded radio company presumably already paying other performing rights organizations for the use of music.
Continue Reading GMR Sues Entravision for Royalty Payments – Looking at the Issues Raised By This New Development in the Music Royalty Wars

This week, the lawsuit brought by the Radio Music License Committee (RMLC) against new performing rights organization GMR (Global Music Rights) for alleged violations of the antitrust laws was determined by a court in Pennsylvania to have been brought in the wrong place – and transferred to a court in California.  This case has been on hold for well over two years while this procedural question was ironed out.  Now that the case has been transferred to California, the litigation that has been on hold while the jurisdictional issue was resolved can begin – but don’t expect quick results as these complicated cases can take years to resolve.  What is involved in this case?

Back in 2016, when RMLC concluded that it was not likely to reach a negotiated royalty rate for radio’s use of the musical compositions controlled by GMR songwriters and publishers, it brought the Pennsylvania court action.  In that action, it argued that the rates that GMR wanted were an abuse of the market power that GMR was able to exercise by banding these songwriters together and offering a license to radio stations on an all-or-nothing basis (see our articles here and here for more on the initial suit).  As it had done successfully with SESAC (see our article here), and as has been the case for decades with ASCAP and BMI, RMLC had hoped to have the court declare that GMR’s unrestrained royalty demands were contrary to the antitrust laws, and that some limits should be imposed on those rates.  The RMLC suit against GMR was brought in the same Pennsylvania court in which RMLC had sued SESAC, which led to the settlement subjecting SESAC rates to arbitration if the parties could not voluntarily agree on rates (and the arbitration process ultimately resulted in significantly lower rates for commercial radio than SESAC had previously received – see our article here on the results of the arbitration).
Continue Reading Music Rights Suit by Radio Music License Committee Against GMR Moved to California Courts – No End in Sight?

In the last few weeks, the press has been buzzing with speculation that the Department of Justice is moving toward suggesting changes in the antitrust consent decrees that govern the operations of ASCAP and BMI.  Those consent decrees, which have been in place since the 1940s, among other things require that these Performing Rights Organizations treat all songwriters alike in distributions based on how often their songs are played, and that they treat all services alike with users that provide the same kind of service all paying the same rate structure.  Rates are also reviewed by a court with oversight over the decrees when the PROs and music services cannot come to a voluntary agreement to arrive at reasonable rates.  The decrees have also been read to mean that songwriters, once part of the ASCAP or BMI collective, cannot withdraw with respect to certain services and negotiate with those services themselves while still remaining part of the collective with respect to other music users (see, e.g., our articles here and here about the desires of certain publishing companies to withdraw from these PROs to negotiate directly with certain digital services while still remaining in these PROs for licensing broadcasting and retail music users).

With this talk of reform of the consent decrees, Congress, particularly the Senate Judiciary Committee under the leadership of Senator Lindsey Graham, has reportedly stepped in, telling DOJ not to move to change the consent decrees without giving Congress the chance to intervene and devise a replacement system.  In fact, under the recently passed Music Modernization Act, notice to Congress is required before the DOJ acts.  Already, both the PROs and user’s groups are staking out sides.  What are they asking for?
Continue Reading ASCAP and BMI Consent Decrees Under Review – How Performing Rights Organizations, Antitrust Policy and Statutory Licenses Could Create a Controversy

Yesterday brought news that a Federal Magistrate issued a ruling (a 42 page order discussing fine points of law) deciding that the antitrust lawsuit brought by RMLC against GMR should not be tried in the Pennsylvania court where the suit was brought. As we wrote here, RMLC (the group that represents many commercial radio operators in music licensing matters) had argued that GMR (a relatively new organization representing songwriters in licensing music use as do ASCAP, BMI and SESAC) was acting in violation of the antitrust rules by trying to license music from a number of songwriters at prices well in excess of the amount that corresponded to these artists’ share of radio airplay. GMR seemingly retaliated by suing RMLC in a Los Angeles court, arguing that RMLC itself violates the antitrust laws by functioning as a buyer’s cartel unifying music licensing buyers against these songwriters (see our article here). Since these dueling suits were filed, the parties have been fighting over where this case should be heard.

RMLC had brought their case in Pennsylvania both because a number of RMLC members operate in Pennsylvania and because RMLC had obtained a favorable result in that court in similar litigation against SESAC, leading to the arbitration process that substantially decreased the rates that the commercial radio industry pays to that organization (see our article here). GMR sued in California as it is headquartered there, and presumably thought that it might get a bit of a “home court advantage” by trying a case in a state a bit more disposed toward content creators. So what does the decision yesterday mean?
Continue Reading Magistrate Rules RMLC Suit Against GMR Should Not Be Litigated in Pennsylvania – What Does that Mean for Radio Companies?