Global Music Rights

It’s now up to the judge. Global Music Rights has told a federal court in Philadelphia why it believes a magistrate’s recommendation should be embraced and the radio industry’s case against it be thrown out. It wouldn’t end the battle, however, merely shift it to a Los Angeles courtroom.

“The state of Pennsylvania has no meaningful connection to this case,” GMR said in a motion filed in U.S. District Court last week. It accused the Radio Music License Committee of filing an antitrust lawsuit against the performance rights organization in Philadelphia for “perceived tactical advantage” since neither company has an office in the city. GMR wants U.S. District Court Judge Darnell Jones to pull the plug, a decision some attorneys say is likely. That’s because federal Magistrate Judge Lynne Sitarski recommended in November that GMR’s antitrust case against RMLC in Los Angeles should instead be allowed to move forward. “There is no basis in fact or law to assert personal jurisdiction over GMR in Pennsylvania and therefore, venue in this judicial district is improper,” Sitarski wrote in her 42-page recommendation to Jones.

In an effort to keep its Philadelphia case alive, RMLC said last month that Sitarski failed to consider a “boycott” that GMR imposed on Pennsylvania stations between May and August when it refused to sign any licensing agreements with broadcasters in the state as part of the back-and-forth between the performance rights organization and the radio industry. In a filing RMLC also said her recommendation to close the Philly case was premature since it never had an opportunity to do a legal discovery that it believes would have helped prove why the case against GMR should be heard there. It asked to allow that process to move forward before he makes any final determination as to which case should be advanced.

The Irving Azoff-led performance rights organization was buoyed by the recommendation to move the case to federal court in California where some attorneys think an airing in a city that’s home to plenty of musicians and entertainment executives will play to an advantage. In an effort to see that guidance is embraced, GMR is now firing back at the RMLC saying the objections it raised last month are “fiction,” including allegations that it refused to sign interim license agreements with Pennsylvania stations. “That argument is as ridiculous as it sounds,” it told the court, explaining, “There was no boycott, and GMR extended the interim licenses, including to Pennsylvania companies.” And even if GMR had refused to license stations in the state, it argues that would be within the company’s legal rights.

GMR has also urged Jones to dismiss the RMLC’s lawsuit outright rather than simply transfer it to California where it would be merged into the pending L.A. case. The RMLC has said doing so would save each side legal expenses but GMR thinks the radio industry should be forced to file a fresh counterclaim in California, arguing a “substantial record” hasn’t been built so far in the Philadelphia court.

Antitrust Claims Still Loom

For more than a year the RMLC and GMR have faced-off over which jurisdiction reigns supreme. That has left the issues at the heart of the case yet to be aired. The RMLC filed an antitrust lawsuit in federal court in Philadelphia in Nov. 2016 alleging GMR violated federal law when it allegedly created an “artificial monopoly” to squeeze higher rates from stations as it demanded radio stations begin paying the performance rights organization for music in its repertoire in Jan. 2017 or pull the songs off the air. Two weeks later GMR replied with an antitrust lawsuit of its own which contended the RMLC is essentially an “illegal cartel.” The California case has been on hold while a final outcome is made in the Philadelphia case.

The delay in reaching any sort of a resolution to the competing lawsuits has meant broadcasters have been required to sign interim deals with GMR to license music in its 75-songwriter repertoire through March 31, 2018. No specifics about how much radio groups are paying have been made public, but Urban One offered a clue when it told investors during a recent quarterly conference call that it is paying about $1 million a year to GMR under its interim agreement. It also remains unclear how many stations have signed an interim license agreement with GMR but it’s believed to be in the thousands with all of the major broadcast groups consenting to the terms, along with a growing number of mid-sized and smaller owners following suit. So far two companies—iHeartMedia and Townsquare Media—have voluntarily signed rights agreements with GMR.