The win will see songwriters get a 138% increase in rates to 0.5% of every event’s revenue.
Live Nation downplayed the impact of the ruling on concert promoters, saying this will instead cost performers about $15 million a year, divided among thousands of artists.
BMI described the ruling, handed down by New York District Court Judge Louis Stanton on Tuesday (March 28), as a decision that ends “decades of below-market rates for songwriters, composers and publishers in the live concert industry.”
“This is a massive victory for BMI and the songwriters, composers and publishers we represent. It will have a significant and long-term positive impact on the royalties they receive for the live concert category.”
Mike O’Neill, BMI
Stanton also ruled that the new rate will be applied to an expanded revenue base, including tickets sold directly to the secondary market, as well as servicing fees that promoters receive and revenues from box suites and VIP packages.
BMI in 2018 filed a petition seeking “reasonable final license fees” for the rights to perform all BMI-affiliated musical compositions in events hosted by concert promoters like NACPA.
At the time, BMI said its total license fees from the live concert industry are less than $20 million annually, or less than 0.19% of the industry’s revenue.
BMI argued that live concerts are built on the music created by songwriters and composers.
“The value of those compositions to live concert promoters is very significant, and far in excess of the minuscule license fees that are presently being paid to songwriters and composers,” BMI said at the time.
BMI proposed a blanket license fee of 1.15% of gross revenues of the concert promoters from July 2018 to December 2022, and a retroactive rate of 0.15% to 0.8% of ticket sales for the January 2014 to June 2018 period.
Judge Stanton ruled in favor of BMI’s proposed retroactive rate, while setting the rate of revenue for gross ticket sales at 0.5%.
“For the current period [July 1, 2018, to Dec. 31, 2022], the reasonable rate is 0.5% of gross revenues,” Judge Stanton said.
BMI CEO and President Mike O’Neill, said: “This is a massive victory for BMI and the songwriters, composers and publishers we represent. It will have a significant and long-term positive impact on the royalties they receive for the live concert category.”
“We are gratified the court agreed with BMI’s position that the music created by songwriters and composers is the backbone of the live concert industry and should be valued accordingly. Today’s decision also underscores BMI’s continued mission to fight on behalf of our affiliates, no matter how long it takes, to ensure they receive fair value for their creative work.”
“This will cost the performers we work with approximately $15 million a year spread out over thousands of artists, and cost increases for Live Nation directly are not material.”
However, a representative for Live Nation told Variety: “This will cost the performers we work with approximately $15 million a year spread out over thousands of artists, and cost increases for Live Nation directly are not material.”
“We advocated on behalf of artists to keep their costs down, and managed to hold the increase to less than 1/3 of BMI’s proposed increase,” a Live Nation spokesperson reportedly said.
O’Neill expressed dissatisfaction at how “it took millions of dollars and years of litigation to get Live Nation, AEG and NACPA to finally pay songwriters, composers and publishers what they deserve.”
Before the lawsuit, BMI and NACPA agreed to a 0.3% rate of gross ticket revenues for concerts with under 10,000 seats and 0.15% for those with more than 10,000 seats. The parties agreed to a separate festival rate in 2006, but left the headline rate unchanged, which prompted the filing of the litigation.
In the UK, concert makers pay British music copyright collective PRS for Music a 4% royalty rate for concerts and all other live music events. The tariff, which took effect from June 11, 2018, was up from the previous 3% royalty rate.
For BMI, the development is expected to boost its revenue from the use of songwriters and publishers’ copyrighted tracks at live events and comes at a time when BMI transitions to a for-profit business model for the first time in its over eight-decade run after scrapping its plan to sell the company in a “multi-billion dollar” deal.
“Simply put, growth for BMI means growth for our affiliates. And most importantly, our goal is to continue to increase our royalty distributions at an even greater rate than we have before,” O’Neill said in October.
In the 12 months ended June 30, BMI paid out nearly $1.5 billion to songwriters and publishers, up 10% from a year earlier.
The court ruling will see BMI benefiting from the rebound in live events post-COVID-19. In the third quarter of 2022, Live Nation attracted over 44 million concertgoers, marking the company’s largest quarterly attendance on record.
Music Business Worldwide