SESAC



RADIO INDUSTRY AND SESAC REACH SETTLEMENT
 
Nashville, TN, July 23, 2015 – The Radio Music License Committee (“RMLC”) has announced   terms of a settlement agreement that brings an end to almost three years of antitrust litigation commenced by the RMLC against SESAC relative to the public performance by radio stations of musical works in the SESAC repertory.  The RMLC represents the vast majority of the nation’s commercial radio stations. 
  • The settlement is historic insofar as it represents the first time in SESAC’s 85-year history with radio broadcasters that the performing right organization’s license fees will be subject to determination by a third-party arbitration panel.  The highlights of the settlement include:In the absence of a voluntary agreement on industry rates, the parties will participate in   binding arbitration to set reasonable license fees to be offered the radio industry through the RMLC.  The binding arbitration period will encompass 22-years commencing 2016 and no historic SESAC rates may receive precedential value.
  • SESAC’s rates will be frozen at existing 2015 levels, with no further rate changes until the parties’ negotiations or arbitration are concluded covering rates for the license term 2016 through 2018.
  • SESAC will continue to offer its existing All-Talk Amendment discount of 75%.
  • SESAC will refrain from pursuing pending audit claims or instigating new audits.
  • The RMLC will be reimbursed by SESAC for the legal fees it incurred in prosecuting the antitrust case against SESAC.
  • The scope of rights to be covered under future SESAC licenses will mirror the coverage that traditional operators currently enjoy with SESAC’s competitors (ASCAP and BMI), and SESAC commits to consolidating (as of 2016) its current three separate license structure for over-the-air, HD radio and streaming into a single license.
  • SESAC’s writer and publisher affiliates will have greater ability to license works directly to radio station operators.
  • In terms of pressing copyright infringement claims against non-licensed stations, SESAC will honor more stringent notice requirements.
  • SESAC will enhance its online repertory search offerings in order to support more user-friendly identification of SESAC works.
  • SESAC will facilitate a process that will enable the RMLC to achieve funding to support the cost of future arbitrations.   
 
The immediate impact of this settlement is that, pending resolution of license fees effective as of 2016, stations will not have exposure to further SESAC rate increases and the industry now has the opportunity to obtain sustained SESAC fee relief.  Stations wishing to avail themselves of the benefits of the settlement will need to execute an authorization form [to be mailed out shortly]. 
 
In announcing the agreement, RMLC Chairman, Ed Christian, said "litigation is always a last resort, but the RMLC felt compelled to file this lawsuit in order to impose some rate setting parameters upon SESAC that would mirror the antitrust consent decree process that has been in place with ASCAP and BMI for decades and that has achieved equitable license fees for the industry.  Echoing this sentiment, the RMLC’s Vice-Chairman, John VerStandig, stated “This settlement effectively bars SESAC from arbitrarily seeking unreasonably high rates from a radio operator at the risk of copyright infringement exposure.  The process of arriving at reasonable fees now agreed to eliminates that exposure.” 
 
Christian further noted that “the RMLC received excellent representation in its antitrust action from lead counsel Margaret Zwisler and her team at the Washington, DC firm of Latham & Watkins.  The RMLC’s longstanding music licensing counsel, Bruce Rich, of the New York City firm of Weil, Gotshal & Manges LLP, acted as settlement agent to negotiate the final terms of the settlement.”
 
Contact:
RMLC
William Velez
(615) 844-6260
bill@radiomlc.org

Click here for SESAC RMLC Settlement Agreement July 2015

Ra
dio Industry Files SESAC Anti-Trust Complaint
 
October 11, 2012. Nashville, TN. The Radio Music License Committee (“RMLC”) has announced the filing of an antitrust complaint against SESAC concerning anticompetitive behavior that allows SESAC to charge the U.S. commercial radio industry monopoly prices to publicly perform musical works in the SESAC repertory. The RMLC is the industry group that has traditionally represented several thousand  commercial radio stations in music license matters with ASCAP and BMI. In fact, the filing of the SESAC complaint comes on the heels of the RMLC’s recent settlements of longstanding litigations with both ASCAP and BMI.
 
SESAC, a public-performance-right licensing agency, is distinguished from ASCAP and BMI in that it is a privately-held, for-profit firm that has created a bottleneck to, and artificial monopoly over, the works in its repertory. Unlike SESAC, ASCAP and BMI are subject to consent decrees established with the Department of Justice, which prevent monopoly pricing because they permit music users to apply to federal court to resolve rate disputes the parties cannot resolve voluntarily. Thus far, SESAC has managed to avoid similar limits on its monopoly pricing.
 
The RMLC complaint follows the class action antitrust lawsuit that the local television industry filed against SESAC in late 2009. That lawsuit remains pending, following the Federal District Court’s decision to deny SESAC’s motion to dismiss the lawsuit.
 
The RMLC complaint alleges that SESAC is a per se illegal cartel that has eliminated all competition between its affiliates and that has created a monopoly over the works in its repertory. RMLC seeks injunctive relief, requiring, among other things, that SESAC submit to a judicial rate-making procedure comparable to what the consent decrees governing ASCAP and BMI impose. The complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania by the law firm of Latham & Watkins, on behalf of the RMLC as the sole plaintiff in the action.
 
In recent years, the radio industry has faced a serious challenge in terms of restoring reasonable license fee levels during difficult economic times. The aforementioned ASCAP and BMI settlements achieved much in terms of placing the industry on a sound footing once again but SESAC remains an anticompetitive force in the industry.    
 
RMLC Chairman, Ed Christian, commented that “resorting to litigation is never a first reflex for the RMLC. This legal process will undoubtedly prove to be taxing in terms of the amount of labor and expense involved. Yet, we feel that SESAC’s pattern of increasingly exorbitant rates imposed on our industry without resort to a fair process has left us with no other alternative. We hope that the good will demonstrated by ASCAP and BMI in working with our industry to achieve mutually agreeable licenses will inform this new challenge with SESAC.”
 
Copy of the complaint by the law firm of Latham & Watkins:
SESAC Complaint


RMLC Defeats SESAC Motion to Dismiss Antitrust Complaint


 
Local TV Industry Settles Anti-trust Complaint Against SESAC
Click HERE for Press Release


Local TV Industry Files SESAC Anti-trust Complaint (2009)

TV Broadcasters Sue SESAC (from Billboard magazine)
November 04, 2009 - Legal and Management | Publishing

By Ed Christman, N.Y.

A group of television broadcasters have filed a class-action anti-trust complaint against SESAC, according to the Television Music License Committee, a non-profit organization which represents 1,200 local television broadcasters in negotiations on music licensing fees with performance rights societies.

According to the Television Music License Committee press release on the court documents, SESAC had previously negotiated licenses for local television stations through the TML Committee, but in 2008 it decided to license broadcasters individually.

The complaint alleges that all stations are compelled to pay SESAC the price it demands for a license because they can't control what music is used in its programs and commercials.

Unlike ASCAP and BMI - which operate under voluntary consent decrees signed in 1941 and amended in 1950 after the U.S. Department of Justice sued ASCAP for violations of the Sherman Antitrust Act - SESAC is not subject to the consent decrees and can negotiate individual licenses, which the Committee believes results in fees that are in excess of what would be reasonable under an industry-wide license.

The complaint was filed in the U.S. Southern District Court of New York by Weil, Gotshal & Mangles LLP on behalf of Meridith Corp. Scripps Howard Broadcasting, Channel 7 of Detroit, Tampa Bay Television, Hoak Media of Nebraska and others.

For further information on the status of the local television complaint against SESAC, contact the Television Music License Committee (TMLC) website:
http://www.televisionmusic.com/.