Attorneys for the Radio Music License Committee (RMLC) and Global Music Rights (GMR) had a teleconference with court officials on Wednesday to discuss the radio industry’s request for a preliminary injunction barring the performance rights organization from collecting the royalty rate that GMR is demanding stations pay. While a court in Philadelphia digests that, GMR has struck back at the RMLC, filing its own antitrust lawsuit in Los Angeles. It calls the radio industry group “an illegal cartel” which results in “artificially low” fees paid by stations for use of music and is asking a federal court to step in to block the RMLC from negotiating on behalf of the industry. GMR is also seeking unspecified monetary damages.
At the core of GMR’s lawsuit is an acknowledgement of just how successful the RMLC has been in winning copyright rate concessions from ASCAP, BMI and SESAC during the past several years. And GMR alleges the reach of the RMLC—it represents the vast majority of commercial radio stations—presents an unfair advantage. “Unable to negotiate freely and fairly, and under threat of a group blockade from radio, the songwriters and the companies that represent them are forced to capitulate to the artificially depressed license fees the RMLC cartel demands,” it spells out in a complaint filed in U.S. District Court.
What helped spur GMR into filing its own antitrust lawsuit has been its inability to convince broadcasters to sign deals. Just two broadcasters have agreed to direct licenses so far and only a handful of other operators have even inquired about such an arrangement despite the risk of being hit with a copyright infringement lawsuit. GMR says that’s evidence of the RMLC industry “stranglehold.”
Formed three years ago by music industry veteran Irving Azoff, GMR isn’t bound by the consent decrees that govern ASCAP and BMI. As a result, broadcasters are required to strike licensing arrangements directly with GMR, which tells the court it now has an “elite roster” of more than 70 songwriters. According to the RMLC, that led the upstart to demand $42 million in licensing fees from broadcasters for 2017 alone.
GMR’s rate demands are reportedly 30% higher than what ASCAP and BMI collect, but it calls that “fair pay for fair play” in its suit. It goes on to allege that the RMLC responded with a “low pay or no play” threat. GMR says that’s tantamount to collusion because if it doesn’t “succumb” to broadcasters’ demands its songwriters will not have access to the vast majority of radio stations. “The RMLC’s conspiracy is perverting the market and retarding prices,” it says in the filing.
Legal action has been all but inevitable for more than a year between the radio industry and the performance rights organization as both sides gauged the other’s resolve in a years-long stalemate. In September the RMLC proposed a rate that offered a single fee—the size of which hasn’t been disclosed—that would provide a blanket license covering all radio stations. But GMR rejected that offer outright and negotiations during October and November went nowhere.
The RMLC last month filed an antitrust lawsuit in federal court, alleging GMR has created an “artificial monopoly” to squeeze higher rates from stations. It alleged GMR has “implicitly threatened” to begin suing radio stations for copyright infringement beginning Jan. 1, 2017 unless broadcasters agree to “supra-competitive rates” to play songs in the company’s repertory. “GMR is an unlawful monopolist that is deploying a calculated scheme to extort the U.S. commercial radio industry,” the RMLC said in its suit filed in U.S. District Court for the Eastern District of Pennsylvania.
Despite the timing of its own antitrust lawsuit, GMR tells the court it’s not in response to being sued by the RMLC. Instead, GMR says its songwriter-focused suit is based on the “illegal anticompetitive conduct” and price-fixing and boycotts by the radio industry group.
But the RMLC isn’t buying it. It accuses the organization of using “bullying” tactics, and calls the lawsuit “baseless” and an “obvious ploy” designed to put pressure on the radio industry in connection with the already pending case. “GMR’s claim that the RMLC is a cartel is frivolous and offensive,” the group says in a statement. “GMR apparently seeks to force all PROs to negotiate separately with more than 10,000 radio stations—a ridiculously inefficient proposal,” it adds.
Meanwhile, back in Philadelphia, GMR has not yet filed its formal response to the RMLC’s complaint. And a judge has not yet ruled on the preliminary injunction sought by broadcasters.