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Although the date hasn’t received much attention, Sept. 30, 2017 could become a consequential one in the music industry. That’s when Pennsylvania-based radio stations are set to lose a license to publicly perform song compositions controlled by Global Music Rights, LLC, an upstart Irving Azoff outfit. Without a license, these stations may be forced to stop playing songs written or performed by stars like Adele, Aerosmith, The Beatles, Bruno Mars, Jay-Z, Madonna and others.
The Radio Music License Committee, which represents some 10,000 radio stations throughout the nation, is attempting to do something in advance of the license expiration. On Friday, RMLC brought an emergency motion requesting that a Pennsylvania federal judge issue a preliminary injunction ordering GMR to continue doing business with these stations until litigation is resolved.
RMLC is currently suing GMR for antitrust violations.
GMR has the benefit of not being beholden to the consent decrees imposed on the two largest performance-rights organizations, ASCAP and BMI. Unlike its larger competitors, which accepted consent decrees to resolve antitrust claims made by the U.S. government in the 1940s, GMR doesn’t have to issue blanket licenses upon request nor have to go through rate-setting proceedings before federal judges. That gives GMR some significant leverage to negotiate higher rates for the public performance of its catalog.
In response to RMLC’s antitrust lawsuit filed last November, GMR contends that it is hardly a monopolist.
“A brand-new PRO with a scant 74 songwriters, less than 2% of all compositions, a single-digit share of radio spins, and no history of price increases is not a ‘monopolist’ exercising ‘market power’ and ‘harming competition,'” stated GMR’s dismissal brief in April. “GMR is not ASCAP or BMI…GMR is not the only game in town, as was the case in the 1940s when those PROs controlled 99% of the compositions available for public performance. Just the opposite, GMR is the first new entrant in the staid PRO market in 80 years. That new blood is helpful, not harmful, to competition.”
In its newest injunction bid (read here), RMLC essentially characterizes GMR as being too modest. The plaintiff quotes Azoff as saying, “We have a full roster of songwriters that nobody can, shall we say, comfortably exist without.”
GMR’s repertory includes works performed by Taylor Swift, Tom Petty & The Heartbreakers and U2, besides what’s mentioned above.
Now, GMR is warning on its website that due to the litigation, “we cannot negotiate or enter licenses with stations owned by companies headquartered or based in Pennsylvania.”
According to RMLC, GMR is “retaliating” against stations there because of assistance provided to establish jurisdiction in this lawsuit.
“GMR has been clear that it does not want to litigate this case in front of this Court; it would prefer to litigate in its home court in Los Angeles,” states RMLC’s court papers. “GMR’s public intimidation tactics not only are designed to frustrate this litigation but also reach beyond the boundaries of Pennsylvania. If GMR is permitted to inflict this abuse on Pennsylvania-based stations, other stations across the U.S. will fear that, if they assist RMLC in this lawsuit in any way, they too could end up in GMR’s crosshairs.”
RMLC argues that it is likely to succeed on the merits of the litigation because of 75 years of precedent allegedly establishing that performance rights organizations, if left unregulated, are anticompetitive. (ASCAP and BMI continue to be in court over certain aspects of their consent decrees.) The radio station group also nods to litigation a few years ago between SESAC — another smaller PRO — and a group of local TV stations. There, a judge issued an injunction upon a finding that there were no substitutes for a SESAC blanket license and that users had no alternatives. The case was eventually settled for $58.5 million.
The plaintiff now says that GMR has “copied” SESAC and lured songwriters away from ASCAP and BMI with a promise to pay them at least 30 percent more than what those two PROs can pay.
“To fund this promise, GMR intends to price gouge radio stations and force them to pay exorbitant rates for licenses to perform those songwriters’ works,” states the motion.
Pennsylvania has now become ground zero in the battle. The plaintiff wants to require GMR to offer interim licenses on “non-discriminatory terms,” or the same terms agreed to by radio stations not in Pennsylvania.
“This is a classic Hobson’s Choice and the epitome of irreparable harm,” continues RMLC’s attorneys at Latham & Watkins. “Pennsylvania-based companies must forgo a license and expose themselves to potentially financially ruinous copyright litigation, unless both they and RMLC capitulate to GMR’s demands and give up the right even to challenge the monopolistic abuse that GMR inflicts, much less fully recover for it. Money damages cannot adequately compensate either ‘choice’ and thus the potential harm is irreparable.”
A spokesperson from GMR gave this comment to The Hollywood Reporter.
“This frivolous motion by the industry-dominating RMLC is a transparent attempt to create jurisdiction in Pennsylvania — a state where neither organization has offices or employees, where no GMR songwriters or publishers live, and where no relevant meetings ever took place,” said GMR. “The RMLC’s latest motion is yet another waste of the court’s time and an attempt to bully songwriters into accepting below-market-rate payments for their music. GMR continues to freely offer interim licenses to radio stations; our attempt to offer licenses to stations based in Pennsylvania was rejected by the RMLC itself prior to the filing of this motion. We are confident the court will see through these baseless allegations.”
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