The U.S. Department of Justice (DOJ) has weighed in on a long-running legal battle between Global Music Rights, the performing rights organization set up by star artist manager Irving Azoff, and the Radio Music License Committee, which represents most U.S. radio stations, over how much money radio stations owe songwriters.
Founded in 2013, GMR sells licenses to radio stations to play the music by a small group of powerful songwriters, which includes Drake, Ryan Tedder and Pharrell Williams. From the beginning, it was intended to upend the way radio stations license music by offering an alternative to ASCAP and BMI, the two big performance-rights organizations (PROs) that negotiate licensing fees on behalf of songwriters.
But disagreements during the price negotiations led GMR and RMLC to sue each other (the latter filed first, in 2016), with each calling the other a “cartel” with a price-fixing conspiracy. Now, each group is trying to get the other’s lawsuit dismissed.
In court documents filed Thursday (Dec. 5) and reviewed by Billboard, the DOJ backs GMR and its songwriters, urging the judge to reject some of the RMLC’s arguments, and claiming that “the present case involves an alleged buyers’ cartel — a form of cartel that can be equally destructive of competition as a sellers’ cartel, even though it is discussed less frequently in the case law.”
The lengthy statement invokes a 1948 case in California where sugar refiners organized to pay a uniform price to beet growers — “the sort of combination condemned by the Act, even though the price-fixing was by purchasers,” the document reads.
The RMLC has also been trying to get GMR to agree to mediation by a third party. But the DOJ says that alone wouldn’t solve the problem, as in the end, the situation is “still an agreement to charge the same prices and thus still eliminates competition on price.”
The decision is a blow to the RMLC, which represents 90% of the country’s terrestrial radio revenue. Meanwhile, GMR has signed up 82 songwriters, and represents 131 Hot 100 No. 1s, according to its website.
“GMR was started because we felt that ASCAP and BMI weren’t efficiently serving writers’ needs,” Azoff tells Billboard. “We believe that the reason songwriters weren’t being compensated was because of what I call the cartel — the RMLC cartel. And they tried to quash us.”
Now, he hopes that the DOJ filing will send a message — not just to those involved in the RMLC case, but to the industry as a whole. “It’s somebody standing up to understand the plight of the creative community in this area for the first time,” he adds.
GMR’s lead counsel Daniel Petrocelli echoes that view, telling Billboard that the DOJ filing is “an important expression of support for the rights and interests of artists and songwriters, and their entitlement to fair compensation for the works that they create — that radio stations exploit.”
What would a fair deal look like? “There should be no ceiling,” Petrocelli adds. “There needs to be fair, arms-length negotiations, just like in any other business dealing. No one should have special rules.”
If the judge agrees with the DOJ, it would allow the songwriters’ suit against radio stations to proceed. The legal battle has been moved to California (after the RMLC originally filed in Philadelphia), with a trial date set for November 2020.
GMR has set up interim licenses for RMLC radio stations as they await trial. “In the meantime, the RMLC will continue to pursue its litigation against GMR,” reads a recent post on the its website. Billboard has reached out to the RMLC for comment.
Meanwhile, Azoff shares a message to the radio stations served by RMLC: “We’re here, we’re answering the phones,” he says. “If I were an owner of a radio station, I’d pick up the phone and call, and take a license, and end this craziness.”