You are using an older browser version. Please use a supported version for the best MSN experience.

Upstart Music Licensing Company Accuses Radio Stations of Unlawful Cartel

Variety logo Variety 12/7/2016 Gene Maddaus
© Provided by Variety

Global Music Rights, an upstart music licensing company founded by Irving Azoff, filed a federal anti-trust suit on Wednesday against the Radio Music License Committee, accusing the group of running an unlawful cartel on behalf of the nation’s radio stations.

The conflict dates to 2013, when Azoff formed GMR to compete with the established licensing companies, ASCAP and BMI, which together control approximately 95% of music copyrights. ASCAP and BMI have longstanding agreements with radio stations, which are represented by the trade group RMLC, that set rates for airplay.

Azoff’s firm holds the rights for a small handful of successful songwriters — about 70 in all. GMR has sought to collect rights that are essential to radio stations, and then license those rights for substantially more than the songwriters could get through ASCAP or BMI. This fall, GMR has been in negotiation with RMLC for an agreement that would allow radio stations to play GMR’s songs, which include songs written or performed by Pharrell Williams, Adele, Drake, John Lennon, Smokey Robinson, Steve Miller, Taylor Swift, Tom Petty & the Heartbreakers and U2.

But over Thanksgiving, those talks broke down. RMLC filed suit on Nov. 18, accusing GMR of exercising monopoly power over its copyrights, and seeking to force it into rate arbitration akin to the arrangements with ASCAP and BMI. RMLC contends that GMR is seeking extortionate rates for its songs.

On Wednesday, GMR fired back, filing its own suit accusing RMLC of running an illegal cartel comprising 90% of the nation’s radio stations — which prevents it from negotiating licensing agreements with individual stations.

“Unable to negotiate freely and fairly, and under threat of a group blockade from radio, the songwriters and the companies that represent them are forced to capitulate to the artificially depressed license fees the RMLC cartel demands,” the suit alleges.

According to the RMLC suit, GMR has indicated that without an agreement, the stations’ right to play its songs will expire on Dec. 31. As of Jan. 1, 2017, stations could be subject to $150,000 penalties for playing songs in GMR’s repertory, which account for about 5-7.5% of total radio plays. RMLC contends that GMR makes it nearly impossible for stations to know which rights GMR holds, meaning they would have difficulty avoiding playing GMR’s songs if they wanted to.

Daniel Petrocelli, GMR’s attorney, disputed that claim. He said RMLC’s lawsuit made it clear that the organization never intended to negotiate in good faith.

“The law does not allow companies who are supposed to be competing against one another to be colluding with one another to keep their costs down,” Petrocelli told Variety. “Business is conducted every single day in this world, and in every single industry, by consensual arrangements. This industry is no different. If they want to play these works they need to pay fair market value.”

The dispute bears similarities to an earlier conflict between RMLC and another licensing firm, the Society of European Stage Authors and Composers (SESAC). RMLC sued SESAC in 2012, won a favorable ruling and ultimately came to a settlement in 2015 that brought SESAC under a rate arbitration scheme similar to the arrangement with BMI and ASCAP.

RMLC did not immediately respond to a request for comment.

AdChoices
AdChoices

More from Variety

AdChoices
image beaconimage beaconimage beacon