US PRO BMI has had its landmark rate court victory against Live Nation, AEG and the North American Concert Promoters Association (NACPA) overturned by a federal appeals court.
The US Court of Appeals for the Second Circuit on Tuesday (February 24) ruled that the rates imposed on concert promoters in Judge Louis Stanton’s 2023 decision – which more than doubled the royalty rate songwriters receive from live concerts in the US – were “unreasonable”, and vacated the ruling.
BMI had celebrated the original decision as a “massive victory” that ended “decades of below-market rates for songwriters, composers and publishers in the live concert industry.”
The ruling gave songwriters a 138% rate increase, from around 0.21% to 0.5% of concert revenue. The previous rate had been set at 0.3% for venues under 10,000 seats and 0.15% for larger venues.
However, the appeals court found that Judge Stanton erred on multiple fronts.
You can read the decision in full here.
The lower court had expanded the definition of “gross revenue” beyond the face value of concert tickets to include ticketing service fees, VIP package revenues, and secondary market ticket sales – a move the Second Circuit said had “no precedent in the history of the industry.”
The court also ruled that Judge Stanton gave too much weight to rates charged by SESAC and GMR, which are not subject to the same antitrust consent decrees as BMI and ASCAP, while undervaluing the more directly comparable rates that BMI and ASCAP had previously negotiated with NACPA.
Additionally, the court found that the judge should not have relied on agreements with non-NACPA promoters as benchmarks, noting that NACPA’s collective bargaining power has historically secured significantly lower rates than individual promoters.
Nevertheless, the appeals court wrote that “a well-supported rate for the new BMI/NACPA license would be significantly lower than the rate imposed by the district court, but it may be higher than the rate for the preexisting BMI/NACPA license.”
The case now returns to Judge Stanton in the Southern District of New York for a new rate determination. BMI has indicated it may seek further appellate review.
NACPA filed its notice of appeal in June 2023, and said it was “gratified” by Tuesday’s decision, calling it “a great result for performing artists – who bear the brunt of the royalty costs paid to BMI for live concerts – and for concertgoers and the live concert industry.”
BMI, however, pointed to the appeals court’s own illustrative analysis of comparable benchmarks, which suggested a new rate could still be significantly higher than what NACPA has historically paid.
“We are unwavering in our belief that our songwriters, composers and publishers deserve more.”
BMI
BMI said in a statement: “While we disagree with many aspects of the Court’s opinion, we were pleased that it confirmed our position that free market rates can be considered when determining the compensation owed to music creators.
“Even the Court suggested a range of potential reasonable rates that would still be 50–80% higher than our prior rate.
“That said, we are unwavering in our belief that our songwriters, composers and publishers deserve more, and we are evaluating all of our options moving forward, including seeking further appellate review.”
The ruling comes as Live Nation and its subsidiary Ticketmaster are set to face trial next week in Manhattan federal court in a separate DOJ antitrust case.
Last summer, BMI announced it had reached a negotiated settlement on royalties paid to artists and songwriters on US radio, in what it called its “largest rate increase ever” for radio play.Music Business Worldwide
