Sometimes suing someone is just hardball negotiation by another name.
This appears to be the case in a new legal front opened up by the music industry. Global Music Rights (GMR), a group that represents 71 successful songwriters, alleged in a lawsuit filed this week that more than 10,000 radio stations wrongfully colluded to underpay them for the right to play their music.
Last month it was the radio stations, operating via a trade group called the Radio Music License Committee (RMLC), that went after GMR in a separate antitrust suit. The stations alleged the group has created a monopoly over the works it represents. The stations are also seeking to subject GMR to oversight similar to that imposed by the U.S. Justice Department on the larger and better-known performance-rights organizations ASCAP and BMI.
With apologies for the alphabet soup, here’s some background: GMR, a relatively new competitor to ASCAP and BMI, represents songwriters behind hits by such performers as John Lennon, Drake, Justin Bieber, Smokey Robinson, Steve Miller, Shakira, Randy Travis, and Kenny Chesney. ASCAP and BMI represent most music-rights holders by means of “blanket licenses” covering their entire collections.
Long-standing consent decrees overseen by the Justice Department require ASCAP and BMI to grant licenses to anyone willing to pay. As the Hollywood Reporter noted: “Music industry heavyweight Irving Azoff launched GMR in 2013 in an effort to give elite songwriters another option and, hopefully, more money.”
What’s really going on with the latest trip to the courthouse, however, was captured not in formal legal papers but a Nov. 28 memo from Ed Christian, chairman of the RMLC, which he posted on the group’s website.
“RMLC is continuing to explore negotiations with GMR while the litigation goes forward, and we remain committed to achieving the best possible result for the industry,” he wrote.
In a statement Wednesday, RMLC Executive Director Bill Velez said the group “will not roll over in the face of the baseless, bullying lawsuit filed by Global Music Rights. GMR’s lawsuit is an obvious ploy designed to pressure the RMLC in response to the antitrust suit the RMLC filed against GMR.”
A footnote in the new suit by GMR said the songwriters’ legal action isn’t a mere response to RMLC’s suit; instead, the songwriters claimed they’re seeking to stop the radio stations’ alleged price fixing and other misconduct.
“Music is the lifeblood of terrestrial radio, but because of the conspiracy, owners of terrestrial radio stations pay only about 4 percent of their revenue—a tiny fraction—to the songwriters who create the music,” Daniel Petrocelli, GMR’s lead outside lawyer, said in a statement. “Other media distributors such as streaming music services, which are not part of the terrestrial radio cartel, pay substantially more money to songwriters.”
By Paul Barrett
Source: Bloomberg
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