ESPN Asks Court to Determine the Fair Rate for Licensing Music

ESPN HQ - H 2015
Nick Caito/ESPN Images

ESPN is now participating in a music industry competition known as rate-setting.

On Thursday, the sports network filed suit against Broadcast Music, Inc., an outfit which licenses the performing rights to many published songs.

In a petition in New York federal court, ESPN says that "unlike typical television networks," it "acquires music rights through direct licenses, i.e., licenses obtained directly from songwriters, music publishers and music libraries that include all rights as may be required ... or through 'work made for hire' agreements with songwriters."

In this regard, ESPN is more like Spotify than Pandora.

Notwithstanding the contention that it is "unique among all television networks in the degree to which it is able to control its music usage," ESPN says it has requested an adjustable-fee blanket license.

"Put simply, the reasonable value of the performance of BMI-licensed musical works by ESPN should bear some proportional relationship to ESPN’s direct payments to publishers and songwriters for the vast majority of its public performances of music," states the petition. "To date, BMI has refused to quote license fees to ESPN for the License Period that bear any such relationship and instead has insisted on license fees that completely ignore the best available evidence of the value of public performances of music on ESPN."

Because BMI, as well as its chief competitor ASCAP, currently operate under a consent decree (the Justice Department continues to review this), those who request blanket licenses are able to go to a rate court when reasonable license fees can't be agreed upon. 

This one appears primed to investigate the value of song compositions on television. It follows a contentious, since settled rate-setting involving Pandora. ESPN, represented by Kenneth Steinthal at King & Spalding, wants the court to determine a reasonable rate for the period between 2010 through 2020.

In a statement, BMI added: "ESPN, the single most successful cable network in the world, uses far more music under the BMI license than it claims. It now seeks a valuation of the BMI license that is only a small fraction of what it has agreed to pay in the past, a valuation that does not properly compensate our music creators. BMI has steadfastly disagreed with that view and looks forward to the opportunity to represent our songwriters, composers and publishers in this rate court matter."