LOS ANGELES (CN) — Escalating a battle over songwriters’ royalties, an upstart group of music superstars accuses a radio broadcasting trade group of running an illegal cartel to suppress payments to artists.
Plaintiff Global Music Rights LLC is a three-year-old performing rights organization seeking to license its members’ songs to radio stations. Its federal antitrust lawsuit claims the Radio Music License Committee, which represents some 10,000 radio stations in negotiating licensing fees, pays songwriters only a fraction of what their music is worth.
That’s not just unfair to songwriters, Global Music says in its Dec. 6 lawsuit, it hurts the listening public as well.
“By artificially suppressing demand and prices for licenses to perform songwriters’ musical works, the RMLC cartel eviscerates the economic incentive these songwriters have to create and publish new creative works for the consuming public’s benefit,” the complaint states.
“The RMLC’s collusive conduct has therefore reduced, and will continue to reduce, the output of high-quality musical compositions.”
The RMLC members include “powerful radio broadcasters like CBS Radio and Cumulus Media,” and the committee “minces no words,” the songwriters say in the complaint. “Its
‘overwhelming objective is to keep license fees for the commercial radio industry as low as [it] can possibly keep them.’”
The lawsuit comes three weeks after the radio industry committee filed its own antitrust complaint against Global Music Rights. That Nov. 18 lawsuit in Philadelphia Federal Court accuses Global Music of being “an unlawful monopolist” that “brazenly seeks” to extort the nation’s radio stations out of exorbitant royalties on pain of “financially ruinous copyright infringement litigation.”
Both lawsuits follow lengthy negotiations between the two groups tracing back nearly to Global Music’s beginning in 2013.
Entertainment mogul and manager Irving Azoff created the company as an alternative to the long-established American Society of Composers, Authors and Publishers, and Broadcast Music Inc.
While ASCAP and BMI together license the rights to nearly 20 million songs from more than 1.35 million composers and music publishers, Global Music, or GMR, represents a little more than 70 very select songwriters and about 26,000 songs, it says in its lawsuit.
The songs include those written or performed by John Lennon, Pharrell Williams, Metallica, One Republic, Shakira, Drake and Randy Travis, according to the complaint and an accompanying news release.
GMR describes itself as a “boutique” performing rights organization focused “solely on premium content” by “a small group of extremely talented songwriters.”
ASCAP and BMI, and a newer rights organization called the Society for European Stage Authors and Composers, negotiate blanket royalty agreements for their songs with the RMLC. But because the RMLC represents about 90 percent of U.S. terrestrial radio stations, it has monopoly-like power to impose extremely low royalties for its members to pay, GMR says.
Although the thousands of radio stations should be competitors, Global Music says, their ability to negotiate as a group through the music license committee destroys real competition.
The RMLC cartel has been “a smashing success” for its member broadcasters, Global Music says. “In a multibillion-dollar industry that relies on music for its lifeblood, terrestrial music radio stations pay less than 4 percent of their revenues — an infinitesimal percentage — to the songwriters who create that music.”
Satellite radio stations and streaming services pay far more, GMR says. “The RMLC’s conspiracy is perverting the market and retarding prices.”
RMLC executive director Bill Velez said Wednesday that his committee “will not roll over in the face of the baseless, bullying lawsuit.”
He derided as “frivolous and offensive” the claim that his group is a cartel, and accused Global Music of trying to “impose monopoly pricing on the radio industry.”
In its Nov. 18 antitrust suit, the radio industry committee said that ASCAP and BMI have for decades been under court-monitored consent decrees and price controls to prevent anticompetitive conduct. The newly formed SESAC also agreed to Department of Justice oversight in 2012.
After a two-year investigation, the Department of Justice in August largely refused to modify the consent decrees.
Global Music founder Azoff said in a statement Wednesday that the dispute with RMLC is “the most important fight of my professional life. I will not stop the fight for fairness to artists and songwriters.”
Global Music’s lead attorney Daniel Petrocelli, with O’Melveny & Myers, said the lawsuit is important because “incentivizing creativity is the basic tenet of copyright law and the reason Irving started GMR.”
Global Music seeks treble damages and punitive damages for violations of federal antitrust laws and California antitrust and unfair competition laws.