RMLC GMR

With the terms of a settlement between the Radio Music License Committee and Global Music Rights being kept confidential, broadcasters and other stakeholders aren’t commenting on yesterday’s announced breakthrough in the five year-old legal battle between the radio industry collective and the Irving Azoff-led performance rights organization. Using a sort of peer pressure strategy, the deal between the two organizations is conditioned on enough broadcasters signing the agreement. With radio companies given a Jan. 31 deadline to either accept or reject the agreement, the ultimate fate of the settlement won’t be known for another three weeks.

Should the settlement achieve critical mass, broadcasters will finally have some assurance about what they will pay to play songs by such heavy hitters as Bruno Mars, Bad Bunny, John Lennon, Nicki Minaj, Prince, Shawn Mendes, and Bruce Springsteen. “The upside is that any settlement brings certainty to the industry,” says broadcast attorney David Oxenford of the law firm Wilkinson Barker Knauer. “It would also seem to show that GMR is conceding that it is appropriate for RMLC to negotiate a deal for the industry – which was one of the matters that they had challenged.”

After a years-long antitrust skirmish that played out in courts in Los Angeles and Philadelphia and racked up massive legal bills, why settle now? While neither RMLC nor GMR would comment, a GMR spokesperson pointed to an explanation on the RMLC website. “The parties have reached this conditional settlement after more than 5-years of dueling litigations and great cost to both sides, in terms of both time and money,” it said. “The conditional settlement recognizes a shared desire by both sides to resolve these disputes and to find a way for radio stations and GMR to work together on a long-term basis without repeatedly resorting to litigation.”

While the settlement represents a breakthrough, Oxenford points to one downside in the announcement. “At least from the public statements, there is no recognition of the need for outside review of the GMR rates in the future as there is with ASCAP and BMI and, through the RMLC settlement with SESAC, with that organization too,” he says.

Another potential concern is a settlement could give new performance rights organizations an incentive to spring up and attract artists with the lure of fetching higher royalty rates from radio. But with the costs of running such a PRO at the scale necessary to command significant payments from the industry – and the always-present costs of litigation – Oxenford doesn’t expect to see many new players jumping into the space. “GMR had important advantages in the industry connections that it has to amass a significant number of what might be termed ‘must-have’ composers in certain formats that most other organizations thinking about operating a PRO would find hard to match,” he points out.

The boards of the RMLC and GMR voted to approve the confidential settlement, which requires GMR to offer commercial radio stations a negotiated long-term license agreement that begins April 1, 2022.

In a 3-page letter sent to broadcasters Thursday, RMLC and GMR said the settlement is conditioned on a certain undisclosed percentage of radio stations accepting the terms of the deal and signing an agreement by the end of January. The letter from the organizations delivers an ultimatum of sort to broadcasters: accept the settlement terms and sign the agreement or risk the possibility of not being able to license and play GMR-repped recordings after the current interim license expires on March 31, 2022.

What happens if not enough radio stations accept the deal? The settlement won’t be finalized and the two sides will return to court and the five-year battle will continue. GMR hasn’t committed to extending its current interim licenses beyond March 31. So if the settlement fails and the court battle resumes, the organizations warn broadcasters “there is no guarantee GMR will make another license available to your stations at all, much less at the prices in this settlement.”