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TORONTO — Canadian music publishers are suing XM Satellite Radio seeking unpaid royalties dating back to 2005.
CSI, a group representing the Canadian Musical Reproduction Rights Agency Ltd. (CMRRA) and Montreal-based Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC), is suing XM, which is publicly traded on the Toronto Stock Exchange, for an undisclosed amount of unpaid royalties.
A spokesman for Sirius Satellite Radio in Canada says they have paid their royalties in full. XM Radio Canada is owned and operated by Canadian Satellite Radio Inc.
It is understood the Society of Composers, Authors and Music Publishers of Canada are also filing suit.
The royalty rate for satellite radio was established by the Canadian Copyright Board earlier this year and is currently at 6.2% of overall revenue, with a discount through to 2010, including a break of 25% from 2005 to 2007, and 10% in 2008 and this year. The applicable rate for 2009 is 5.6%
Overall revenues owed by XM are estimated to be about $3.3 million based on the financial statements of the satellite radio company. XM has lost approximately $180 million since it began operating in 2005.
XM issued the following prepared statement: “XM Canada recognizes the value that CMRRA/SODRAC Inc. (CSI) provides. The company is committed to meeting its obligations but notes that its royalties include a significant retroactive tariff to 2005, coming due during a very challenging economic time.”
David Basskin, president of CMRRA-SODRAC Inc., says he received a letter on July 31 and a call from Moskowitz saying XM would not be paying its royalties and asking for an extension on payment terms, which the CMRRA deemed “unacceptable.”
“They’ve taken a very straight forward position and we’ve responded accordingly,” says Basskin. “All the while they continue to use our rights on their programming every hour of every day.”
Basskin says there is no timeline on the lawsuit, but he is hopeful of a speedy resolution.
XM chief executive Michael Moskowitz did not immediately return a call seeking further comment.
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