1,000 Local Stations Claim SESAC|Fixes Prices For Television Music

MANHATTAN (CN) - A company that licenses music for television programs committed egregious antitrust violations, station owners claim in a federal class action. The class of 250 local commercial television stations, including chains that collectively own more than 1,000 local stations, claims SESAC conspired to fix prices for "virtually all" music broadcast on local stations.

Television programs almost always contain music, whether in the theme or background or just to transition between commercials, and station must obtain rights to each composition to avoid copyright infringement, according to the complaint.

The class claims that SESAC is one of three organizations that offer rights to "virtually all" music broadcast by local stations - and is the only for-profit organization.

The Justice Department has been enforcing an antitrust judgment against the other two organizations - Broadcast Music Inc. (BMI) and the American Society of Composers, Authors and Publishers, or ASCAP - for the past 50 years, according to the complaint.

SESAC was not included in the original lawsuit and is not subject to judgment's limitations, and the class claims it has been flaunting this freedom to great commercial success.

Local stations cannot select, alter or remove the music that accompanies a certain program, and the companies that own the rights to the compositions hold all the bargaining power. Without music licenses, a station could not broadcast popular syndicated programs such as "Seinfeld" or "Entertainment Tonight," according to the complaint.

The class alleges that SESAC commits the same or worse antitrust offenses than those that drew the Justice Department's attention decades ago. It claims SESAC has "strategically raided" the other two organizations to collect compositions that are in demand.

SESAC's anticompetitive behavior includes charging all-or-nothing blanket licensing fees just to get access to its repertory of music, according to the complaint. The class claims that there is no way for a station to tell whether it needs to use SESAC unless SESAC says it does.

Whether a station uses one composition from the repertory once, or it uses 1,000 per day, the stations say SESAC gouges them with the same inflated fee.

They also claim that SESAC refuses to negotiate and threatens them with damaging copyright infringement lawsuits.

The class seeks an injunction and treble damages, alleging conspiracy, price-fixing, copyright misuse and monopolization.

It is represented by Helene Jaffe with Weil, Gotshal & Manges

Lead plaintiff Meredith Corp. is joined by E.W. Scripps Co., Scripps Howard Broadcasting, Channel 7 of Detroit, Hoak Media and others.

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