US collection society SESAC has paid the Radio Music License Committee (RMLC) $3.5m to settle a potentially volatile antitrust lawsuit which dates back to October 2013.
SESAC, which earlier this month acquired US mechanical rights society Harry Fox, says the payment to the commercial radio group includes no damages and simply reimburses RMLC’s legal expenses.
The CMO said to the media that “the amount of reimbursed legal expenses is less than the cost SESAC would incur were it to litigate the case to conclusion”.
Importantly, RLMC has agreed that SESAC is entitled to be compensated for the full value of works in its repertory, even if SESAC affiliates own less than 100% of the copyright interest.
Neither the RMLC nor any of the thousands of stations it represents can argue that SESAC should receive any diminution of value for these split works other than proportionately to the partial interests SESAC represents.
John Josephson, Chairman and CEO, SESAC, Inc., said “With this settlement, we’ve secured commercial arbitration for the next 22 years as the basis for setting SESAC’s license fees for commercial radio stations represented by the RMLC.
“This guarantees a level playing field in establishing the fair market value of our creators’ musical works for the broadcast radio industry.
“The settlement also requires that SESAC be compensated fully for all works in its repertory, even for so-called ‘split works’, where performance rights to the same work are represented by another rights organization.
“This guarantees a level playing field in establishing the fair market value of our creators.”
John Josephson, SESAC
“We are confident in our ability to achieve a positive outcome for our affiliated composers and music publishers in radio based on our historical arbitration experience in the local television market with the Television Music License Committee.
“We are excited to have the opportunity to work closely with the RMLC and the commercial radio stations it represents in an expedited and efficient commercial arbitration setting if the parties can’t agree.”
SESAC added that the settlement would allow it to pursue a strategy of a “simplified and more efficient, multi-right, multi-territory licensing model utilizing an ongoing focus on information technology and data science to meet the developing needs of music users, distributors, writers, composers, publishers and other stakeholders”.
The RMLC has commited not to claim, for the duration of the settlement agreement, that SESAC is violating the antitrust laws so long as SESAC adheres to the settlement.
SESAC’s current license fees to commercial radio stations are undisturbed and will remain in place through the end of 2015, continuing on an interim basis into 2016.
This is subject to a negotiated agreement on the 2016 rates or a final decision in an arbitration to be conducted in early 2017.
SESAC is the only for-profit songwriter/publisher PRO in the U.S, but also claims to be the only PRO to pay monthly radio royalties and the first PRO to pay songwriters and publishers for live performances.
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