GMR Offers to Extend Its Interim License With Commercial Radio Stations – But It Wants a 20% Increase in Royalty Payments

Global Music Rights, one of the newest performing rights organization licensing the public performance of musical compositions, has agreed to extend its interim license with commercial radio broadcasters.  That license is set to expire at the end of March (see our article here).  This interim license has been offered and extended for the last several years to allow stations to perform GMR music while GMR litigates with the Radio Music Licensing Committee over whether GMR is subject to any sort of antitrust regulation of the rates that it sets (and GMR’s countersuit over whether the RMLC itself violates the antitrust rules as a buyer’s cartel, by allegedly organizing all the buyers of GMR’s music to hold out for a specific price).  We wrote about that litigation here.  With the pandemic, the lawsuit which should have already gone to trial is likely not going to be heard until possibly next year, as discovery in the case has been postponed until later this year.

Today, the RMLC notified radio broadcasters that GMR will again extend its interim license while the litigation plays out – but GMR wants a 20% increase in the royalties that it receives.  RMLC made clear that this is not a negotiated rate – it is one that GMR has imposed with no input from RMLC.  Stations should expect to hear from GMR about the extension by March 15.  If they do not, stations interested in the extended license should reach out to GMR.  Many stations are confused by this royalty, so we thought that we would provide some background.

As background, GMR is a new performing rights organization. Like ASCAP, BMI and SESAC, it represents songwriters and collects royalties from music users for the public performance of these songwriter’s compositions. GMR will collect not only from radio stations, but from all music users – it has already reached out to business music services that provide the music played in retail stores, restaurants and other businesses, and no doubt has or will license other companies that make music available to the public. Most songwriters represented by GMR used to be represented by ASCAP or BMI, but these songwriters have withdrawn from ASCAP and BMI and joined GMR, allegedly to attempt to increase the amounts that they are paid for the use of the songs that they have written. For radio, these withdrawals became effective in January 2017, when the old license agreements between ASCAP and BMI and the commercial radio industry expired.  Since then, radio stations have been signing interim licenses to play GMR music – and now it is seeking this big increase in what they are being paid for that interim license.

What is a broadcaster to do?  Obviously, consult your own attorney for advice.  Generally speaking, there is no authority to play the GMR music catalog other than through a license.  Right now, that license comes either through this interim license offered to all commercial stations, or through an individually negotiated license between the broadcaster and GMR. Commercial stations can either sign a license or stop playing GMR music. Pulling all GMR music would be difficult because GMR has core songwriters in most musical genres, whose songs are basically must-haves for a station to operate with most traditional formats.  For instance, GMR’s catalog includes songs written by members of the Eagles, Bruno Mars, Bruce Springsteen, John Lennon, Pharrell Williams and even George Gershwin.  Under copyright law, there are substantial “statutory damages” of up to $150,000 per song for any infringement, so even if one of GMR’s songs is in an ad or in some syndicated programming that plays on your station, your liability could be steep. GMR has already sued one station group for not paying royalties (see our article here).  It is watching what broadcasters do, so careful consideration of rights and liabilities must be made.

Note, however, that noncommercial broadcast stations are not covered by this interim license being offered by GMR to RMLC members, as public performance royalties for noncommercial broadcasting are set by the Copyright Royalty Board.  See our article here for more details on the royalties for noncommercial stations through the end of 2022.  A proceeding at the Copyright Royalty Board has just begun to review noncommercial rates for 2022 through 2027, so GMR royalties for noncommercial stations may increase in the not too distant future.

All stations should discuss with their counsel what their best course of action is in connection with GMR.

Courtesy Broadcast Law Blog