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Radio Stations Say There’s a New Monopoly in Town

The bargaining arm of 10,000 radio stations claims in court that it is being extorted for exorbitant licensing fees for the right to play songs by a roster of iconic acts like Fleetwood Mac and the Eagles.

PHILADELPHIA (CN) – The bargaining arm of 10,000 radio stations claims in court that it is being extorted for exorbitant licensing fees for the right to play songs by a roster of iconic acts like Fleetwood Mac and the Eagles.

Based in Brentwood, Tennessee, the Radio Music License Committee has been negotiating with what the industry calls PROs, or performing-rights organizations, for decades.

Antitrust issues with these organizations are nothing new, the committee says, noting that the two largest PROs are still constrained by a court order dating back to a 1940s lawsuit by the U.S. Department of Justice.

The committee’s Nov. 18 suit, filed with a federal judge in the Eastern District of Pennsylvania, meanwhile takes aim at a boutique PRO called Global Rights Music.

“GMR brazenly seeks to do exactly what got ASCAP, BMI and SESAC into so much trouble; it is trying to force the radio industry into paying exorbitant prices for a license to the musical works it claims are covered by its repertory, with a credible threat of financially ruinous copyright infringement litigation,” the 47-page complaint states.

ASCAP is short for the American Society of Composers, Authors and Publishers. Just this past spring, the Justice Department held ASCAP’s feet to the fire for violating the terms of a 1941 antitrust settlement. Broadcast Music Inc., or BMI, is subject to the same 75-year-old settlement. SESAC, the third major rights group, meanwhile settled antitrust claims from the committee in 2015.

GMR has only been in business since 2013, but the committee says it quickly assembled an “indispensable repertory of ‘must-have’ musical works that radio stations, as a practical matter, could not avoid playing.”

“In the words of its founder, Irving Azoff,” as quoted in the complaint, “‘We have a full roster of songwriters that nobody can, shall we say, comfortably exist without.’” (Emphasis in original.)

Though GMR did not return a request for comment, the radio industry group says GMR’s conduct has served to put it over a barrel if its members want to license GMR artists.

To acquire its monopoly, according to the complaint, GMR took advantage of its position as a newcomer, not subject to the same settlement restrictions that ASCAP, BMI and SESAC face.

“GMR has been open and unapologetic about its unlawful objective,” the complaint states. “It strategically hand-picked a critical mass of songwriters and publishers and lured them away from ASCAP and BMI with a promise to pay them at least 30% more than ASCAP or BMI could pay them.”

The New York Times reported that the Madison Square Garden Company committed $175 million to the joint venture with Azoff, a music-industry veteran.

According to the suit, GMR effects its stranglehold on radio stations by controlling 100 percent performance rights for only a small percentage of its works. By offering only “fractional” rights for most of the works in its reparatory, radio stations “must obtain a separate license from each of the copyright owners," according to the compliant.

The radio stations have no choice but to file suit, said Ed Christian, chairman of the plaintiff committee.

"This legal process will undoubtedly prove to be taxing in terms of the amount of labor and expense involved,” Christian said in a statement. “Yet, we feel that GMR's exorbitant fee demands are out of balance with their competitors and would do irreparable harm to our industry and this has left us with no other alternative.”

Demanding an injunction, the radio-industry group alleges monopolization and attempted monopolization in violation of the Sherman Act. The group is represented by Peter J. Mooney of White & Williams.

Categories / Arts, Business, Entertainment, Media

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