Latest Turn in Radio's Licensing Battles Hinges on Location, Location, Location

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What should radio stations have to pay to play songs by the likes of Don Henley, Drake and Prince?

The answer may depend largely on the state in which dueling legal battles play out between the Radio Music Licensing Committee and Global Music Rights, the performance rights group launched three years ago by Eagles manager Irving Azoff, representing the rights of 75 songwriters.

The RMLC is likely to have an edge in Pennsylvania based on a prior favorable legal ruling there by a different judge in an antitrust lawsuit against GMR competitor SESAC. The radio group sued Azoff’s outfit in November in federal court in Philadelphia for demanding what it alleged were excessive rates to play GMR’s compositions. 

On Monday (July 24), the radio organization issued a press release saying it filed an injunction to require GMR to license stations owned by companies headquartered in Pennsylvania and prevent GMR from “engaging in these overtly coercive actions.”

GMR, though, filed its own antitrust complaint against the RMLC in December in federal court in Los Angeles, where GMR and most of the music industry is based. In its suit, GMR alleges that the radio group acts as a cartel to suppress royalty rates, and sees the RMLC’s Monday filing as an effort to keep the case out of California and in Pennsylvania.

“This frivolous motion by the industry-dominating RMLC is a transparent attempt to create jurisdiction in Pennsylvania -- a state where neither organization has offices or employees, where no GMR songwriters or publishers live, and where no relevant meetings ever took place,” GMR said in a statement Monday. “The RMLC’s latest motion is yet another waste of the court’s time and an attempt to bully songwriters into accepting below-market-rate payments for their music.”

The RMLC statement doesn’t make any claim one way or another about which jurisdiction it prefers, but claims that it is asking for the injunction to protect not only stations in Pennsylvania, but all radio stations throughout the U.S.

At issue is how to determine the “market rate” for radio stations licensing songs by Benny Blanco, Bruno Mars, Drake, Pharrell Williams, Ryan Tedder, Boz Scaggs, Billy Idol, Eddie VedderJohn Lennon, Jon Bon Jovi, Smokey Robinson and more. There’s not much of a free market to go by, since the music industry’s two biggest performing rights groups, ASCAP and BMI, operate under consent decrees signed with the Department of Justice, which stipulate that if parties can’t agree on rates, a rate trial before a Federal Court will make the determination. While the RMLC, which represents most of the biggest radio networks like iHeart, CBS, Cox Media and Entercom, Emmis, and Cumulus, as well as independent stations, wants GMR to be regulated in what it can charge, GMR argues that it is legally free to charge what it likes as a relatively small organization.

Failing to agree on long-term rates with the radio industry ahead of a January deadline, GMR offered interim licenses to stations late last year that would be good through Sept. 30, and had been in talks with radio outfits again about either extending or offering new interim licenses.

But on May 29, GMR posted a notice on its website saying, “The RMLC tried to bully GMR -- but the tiny startup stood up and said no. The RMLC responded by suing GMR, accusing the new company with fewer than 100 songwriters of being a monopoly. As part of that lawsuit, the RMLC told GMR and its members that it did not negotiate the terms of licenses between RMLC members and the PROs and, going forward, GMR must approach each radio station owner directly and individually to make deals. GMR did so and we’ve entered hundreds of licenses with radio stations.”

The notice further says that radio stations -- except those owned by companies headquartered in Pennsylvania, due to the pending litigation there -- should contact GMR to negotiate the terms of a license or the extension of an existing license if interested in securing the rights to perform works in GMR’s catalog.

The RMLC’s motion Monday sought to ensure Pennsylvania radio stations could get interim licenses despite GMR’s May notice. But GMR said in its statement that its “attempt to offer licenses to stations based in Pennsylvania was rejected by the RMLC itself prior to the filing of this motion.”

Moreover, GMR tells Billboard via e-mail it has already offered interim licenses late last year to stations in Pennsylvania, and any one of those stations that’s already licensed is welcome to extended terms beyond Sept. 30 just like any other station, regardless of where they are.

Like they did previously when they gave out interim licenses from the end of December 2017 through Jan. 29, it would require radio stations to sign an agreement that the license couldn’t retroactively be applied to establish jurisdiction in Pennsylvania. When the RMLC filed its lawsuit in November, GMR hadn’t licensed any stations in that state yet, so it doesn’t want the new temporary license to be used to establish jurisdiction there, since it is fighting to have the case moved to California.

Anyone with a temporary license from GMR, including the RMLC, has already signed such a waiver; and GMR maintains it's trying to keep that waiver valid. But the RMLC appears to be trying to invalidate the waivers that have already been signed through its latest court motion.

Sources say it is up to the discretion of either Judge where the lawsuits have been filed to decide whether to combine the two anti-trust lawsuits, or to continue them separately. But if they continue as separate cases, GMR wants them to be heard in California.

In the meantime, plenty of Pennsylvania radio stations continue to play GMR’s hits. The question is what they will owe down the road -- and which court, if any, will decide.