9:51am PT by Eriq Gardner
ESPN Reaches Settlement in Music Licensing Dispute
For the next few years, ESPN won't have to worry too heavily about music played over speakers in stadiums and arenas. On Monday, a New York judge was informed that ESPN and Broadcast Music, Inc., had reached a settlement in principle on license fees for the performance of music by the cable network.
The deal resolves a rate-setting proceeding that ESPN initiated a year ago when it sued BMI for allegedly not being reasonable in licensing negotiations.
According to ESPN, it acquires music rights directly from songwriters, music publishers and music libraries, but just to be on the safe side, it also takes a blanket license from performance-rights outfit BMI. But ESPN asserted that those fees "should bear some proportional relationship to ESPN’s direct payments to publishers and songwriters."
In reaction to the lawsuit, BMI stated that ESPN "uses far more music under the BMI license than it claims," and that ESPN was demanding to pay "only a small fraction of what it has agreed to pay in the past."
According to our calculations from court papers, the cost of so-called ambient music on ESPN amounts to about $15 million per year.
But BMI contended that ESPN was getting value for what it forked over. In court papers, the PRO said having a blanket license is "insurance against copyright infringement, relief from the need to separately identify each and every composition inserted into its programming, greatly reduced transaction costs, streamlined collection and payment of royalties, and immediate access to the more than 10.5 million works in BMI’s repertoire."
Additionally, BMI told the judge that ESPN had greatly increased its use of ambient music "as the result of the distribution of its programming on its website and other mobile platforms."
The two sides will avoid a showcase of evidence to determine the value of such music. A spokesperson for ESPN confirmed a settlement in principle while declining to comment about the terms.