Radio Settlement Sets|22 Years of Arbitration

NASHVILLE (CN) - A music licensing agency has settled an antitrust suit with radio industry representatives, stipulating that disputes over licensee fees go to binding arbitration for the next two decades, the parties said.

SESAC Inc. and the Radio Music License Committee announced the settlement Thursday, which requires arbitration for radio licensee fee disputes through 2037.

The RMLC sued SESAC in October 2012, claiming the licensing agency was charging commercial radio monopoly prices for music it collects royalties on. The radio committee claimed that SESAC was not bound by the same consent decrees that other licensing companies like ASCAP and BMI are subject to. This week's settlement dismisses the 2012 lawsuit.

The settlement states that the parties will go to binding arbitration over fees in the absence of a voluntary agreement on industry rates, according to an RMLC press release. The 22-year arbitration period begins in 2016. Current license fees will remain undisturbed through the end of this year.

SESAC Chairman and CEO John Josephson said the deal is fair for both sides.

"With this settlement, we've secured commercial arbitration for the next 22 years as the basis for setting SESAC's license fees for commercial radio stations represented by the RMLC. This guarantees a level playing field in establishing the fair market value of our creators' musical works for the broadcast radio industry," Josephson said in a statement. "The settlement also requires that SESAC be compensated fully for all works in its repertory, even for so-called 'split works,' where performance rights to the same work are represented by another rights organization."

SESAC is required to pay the RMLC about $3.5 million in legal expenses under the settlement, which SESAC says is less than what it would have cost to fully litigate the case.

John VerStandig, the RMLC's vice chairman, said the agreement protects radio stations from subjective rate increases.

"This settlement effectively bars SESAC from arbitrarily seeking unreasonably high rates from a radio operator at the risk of copyright infringement exposure," VerStandig said. "The process of arriving at reasonable fees now agreed to eliminates that exposure."

SESAC currently licenses more than 400,000 songs by artists including Bob Dylan, Neil Diamond, Rush and Zac Brown, according to its website. The agency is based in Nashville.

The RMLC, headquartered near Nashville in Brentwood, Tenn., claims to represent about 10,000 radio stations.

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