RMLC SESAC arbitration

In a Press Release issued on November 1, the Radio Music License Committee announced the results of its arbitration with SESAC.  Despite the arbitrators’ decision that rates for commercial radio broadcasters are going up modestly, RMLC declared the decision a win.  How can an increase in royalties be a win?  Let’s provide some background on this decision and why the radio industry may breathe a sigh of relief.

First, it is important to set the background for the decision.  As we wrote here, in 2015, RMLC and SESAC settled an antitrust lawsuit brought by RMLC, agreeing that rates for the public performance by commercial radio broadcasters of the catalog of SESAC music would be set by binding arbitration.  Every four years, a proceeding is held to set the royalties to be paid by a broadcaster for music used in its over-the-air programming and on internet streams of that signal. 

The royalty currently paid by commercial radio stations was set by a settlement between RMLC and SESAC before arbitration in 2020 (see our article here).  That agreement, under which music radio stations have been paying .2557% of revenue, expired at the end of 2022.  As RMLC and SESAC could not mutually agree to new royalties, the recent arbitration was held to set royalties for the period from January 1, 2023 through December 31, 2026.  The decision announced on Friday set those royalties at .2824% of revenue.  Why is this increase from .2557% to .2824% considered a win?Continue Reading RMLC Announces Arbitration Decision on SESAC Royalties for Commercial Radio Stations for 2023-2026

Here are some of the regulatory and legal developments of the last week of significance to broadcasters, with links to where you can go to find more information as to how they may affect your operations.

  • The FCC this week released a Notice of Proposed Rulemaking proposing changes to the fees it charges broadcasters for

The Radio Music License Committee and SESAC yesterday announced an extension of the terms of the royalty agreement that is currently in place between the commercial radio industry and this performing rights organization.  As we wrote here, the agreement under which radio broadcasters have been paying for the last three years was arrived at after an arbitration process following the settlement of an antitrust proceeding, and resulted in a dramatic reduction in the amount of the royalties paid to SESAC prior to that litigation.  The antitrust settlement calls for arbitration every three years if RMLC and SESAC cannot voluntarily arrive at new royalties.  The initial three-year period expired at the end of the 2018.  The parties have been negotiating a deal that covers the period starting from January 1, 2019, and the new deal that they arrived at runs for four years through December 31, 2022.  The new blanket agreement is available on the RMLC website here and with instructions from SESAC here.  It principally carries forward the deal terms of the prior agreement.

Note that in many trade press reports there have been statements that the agreement covers the public performance of SESAC music, not just on over-the-air radio but also on the streams of broadcast stations and in other “new media transmissions.”  These new media transmissions, under the terms of the agreement, also include “radio-style podcasts.”  As we noted in connection with RMLC’s recent license agreement with BMI, these agreements cover the public performance rights in a podcast, but that is not the only music license that you need to use music in a podcast.  As podcasts are downloadable and playable on-demand, and they involve the synchronization of music and speech into a unified recorded work, the rights under Copyright law to make reproductions and likely the right to make derivative works of these recordings need to be secured.  These rights need to come directly from the copyright holders in both the musical composition (the words and music of a song) and the sound recording (that song as recorded by a particular band or singer).  The public performance rights from ASCAP, BMI and SESAC are insufficient by themselves to give you the rights to use music in a podcast, which is why there are so few podcasts that make extensive use of major label recorded music.
Continue Reading RMLC and SESAC Agree to Extend Current License Agreement for Commercial Radio – Music Licensing Update for Radio

The judge presiding over the royalty litigation between BMI and the Radio Music Licensing Committee (RMLC) approved the settlement between these parties by an order released on March 23.  At the same time, the judge approved an order keeping the specifics of the approved settlement confidential for 30 days while the settlement is being implemented

We wrote last summer about the substantial reductions in SESAC royalties that the Radio Music License Committee was able to achieve for commercial radio stations through a decision in its arbitration proceeding. RMLC recently sent out an email to all commercial stations that had authorized it to act on the stations’ behalf reminding them that,

Last week, I participated in a discussion about music royalties for broadcasters at the Texas Association of Broadcasters Annual Convention in Austin. Speaking on the panel with me were the heads of the Radio Music License Committee and the TV Music Licensing Committee. These are the organizations that represent most commercial broadcasters in their negotiations with ASCAP, BMI and SESAC for public performance licenses for “musical works” or “musical compositions” – the underlying words and music to any song. In our discussion, there was a general summary of the licenses needed for the use of music by broadcasters, a summary of the status of some of the current royalty negotiations, and questions about other issues in music licensing. As this discussion raised a number of issues that I have covered in articles posted on this blog, I thought that it might be worth highlighting some of that past coverage so that those interested in any topic can read a bit more on these subjects.

The TV industry seems to have far fewer issues than radio, perhaps because radio is so much more music-dependent. While there is music in many TV programs, some of it is cleared (i.e. licenses have been negotiated) by the program providers (including some networks), so that stations need only worry about licenses for programming where the music has not been pre-cleared. Thus, TV stations have alternatives of blanket licenses for all programming (principally used by affiliates of networks where music has not been pre-cleared) or per-program fees where stations pay for music only in programs or program segments where music has not been licensed by the program suppliers.
Continue Reading Looking at Music Royalty Issues for Radio and TV Broadcasters

It was announced this week that SESAC’s royalties for radio for the period starting at the beginning of 2016 through the end of 2018 have been slashed – being reduced to less than half what they were in 2015.  This decision came out of an arbitration process that resulted from the settlement of an antitrust lawsuit that the Radio Music License Committee (RMLC) brought against SESAC (see our article here for a summary of the settlement).  Yet, despite the significant reduction in the royalties for radio operators, both sides declared victory (see RMLC press release here and press reports on SESAC’s reaction here).  Can both be right?  While the decision of the arbitrators is not public so we can’t know for sure the reasoning behind the result, it might be that there is something to each of these claims.

For radio, the victory is clear.  For commercial radio broadcasters, the royalties were significantly decreased, retroactive back to the beginning of 2016 year for stations that had elected to have RMLC represent them in this lawsuit.  Some stations had been enticed by an offer made by SESAC at the beginning of 2016 offering stations a new SESAC license at rates 5% less than they were in 2015 (see our article here).  Those stations may not qualify for the much greater royalty reduction available to the majority of commercial stations that opted into RMLC representation and are covered by the arbitration result.  The new SESAC royalties will also cover the use of SESAC music on broadcaster’s streaming platforms and HD broadcasts, uses for which broadcasters had previously had to pay SESAC separately.  Of course, stations still need to pay public performance royalties for musical compositions to ASCAP, BMI and, in many cases, GMR and public performance royalties for sound recordings, when streaming recorded music, to SoundExchange.
Continue Reading SESAC Royalties for Commercial Radio Slashed By More Than Half – Both SESAC and RMLC Claim Victory in Arbitration