Manager Tries to Raise Songwriter Royalties, Gets Sued by 10,000 Radio Stations

by Paul Resnikoff

Manager Tries to Raise Songwriter Royalties, Gets Sued by 10,000 Radio Stations

Irving Azoff thinks that songwriters are getting forced to accept sub-standard royalties from radio stations.  Now, he’s getting sued by 10,000 of them.

Do we still need the government to determine what songwriters get paid from radio spins?  Radio stations love the cheaper rates, but major publishers and songwriters say the system is rigged for no reason.  So why not privately negotiate something that both sides like, instead of relying on a Soviet-style government agency?

Enter Irving Azoff, the music industry’s most powerful manager.  Irving was so pissed off about this, he started an entirely new company to get around government-mandated rates for radio.  Currently, age-old performance rights organizations (or PROs) ASCAP and BMI are forced to accept government-mandated rates, based on a 1940s-era consent decree designed to limit monopolistic power.

But Irving’s company, Global Music Rights (GMR), isn’t subject to those regulations and is privately negotiating its rates.  The reason is that it’s new and for-profit, but please don’t try to make any more sense of it.  Either way, mega-stars like Pharrell and Ryan Tedder have joined GMR to negotiate higher payouts.

Actually, a lot of artists are doing the same thing, which means that radio stations will soon faced major increases in their publishing performance payouts.  Which might explain why a group of 10,000 radio stations are now suing Azoff to try to shut him down.  They’re calling GMR a monopoly, and calling the game unfair.

You know how this one goes: when you can’t negotiate, litigate.

The litigation is coming from the RMLC (Radio Music Licensing Committee), a group that claims that GMR can gouge them with unfair rates.  RMLC doesn’t want private negotiations, which includes the possibility of not licensing certain works or paying more than their ‘budget’.

Instead, they’re arguing that GMC should be forced to charge government-set rates, just like ASCAP and BMI, because of monopolistic abuse.

Sounds like a lawsuit against free market capitalism, and private dealmaking.  But for the RMLC, the move has already worked with SESAC.  Like GMR, SESAC is also privately run and free from government-set rates.  But back in the summer of 2015, SESAC agreed to a settlement with RMLC.

Whether Azoff succumbs to the same legal bullying remains to be seen, though we have a feeling that the RMLC is in for a huge fight.

The RMLC filed that action against GMR with the US District Court for the Eastern District of Pennsylvania.

Yoel Molina Law

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