RMLC: GMR Contacting Stations With Bad Information

Just when you thought there might be a truce between the RMLC and GMR, that idea turns out to be a pipe dream. Radio Music Licensing Committee Chairman Ed Christian sent an e-mail to stations on Monday raising his concerns that Irving Azoff’s organization, Global Music Rights, is “making misstatements” to radio stations.

GMR was founded in 2013 by Irving Azoff. It’s a Performing Rights Organization (PRO) similar to ASCAP and BMI. GMR covers songs by the Eagles, Metallica, One Republic, Drake, Pharrell Williams and John Lennon, among others. GMR and the RMLC have been neogotiating for the past two years. Some of the songs now covered by GMR were covered by ASCAP or BMI until the end of 2016. There are reports that GMR is seeking about $42 million per year from radio to play the songs in its catalogue. The RMLC argues that amounts to a rate way too high and is why the RMLC filed a lawsuit against GMR back in November.

The RMLC issued a statement over the holidays that said the two organizations worked out a deal where stations could accept an interim license for January through September. Here is what Christian sent to radio stations Monday, claiming GMR is misrepresenting what was worked out before

“First, GMR incorrectly asserts that the interim license fee was “negotiated” with the RMLC. As many of you appreciate, the interim license situation with GMR is unlike negotiations we have undertaken involving ASCAP or BMI. GMR refused to negotiate the price it will charge stations under the interim license, and we have not undertaken at this point any negotiations that would bind any stations. Because we believe that the availability of an interim license is an important option to our constituents who had legitimate concern as to infringement exposure related to GMR works, the RMLC ultimately did work with GMR to make an offer to the industry for an interim license for the period January 1 through September 30, 2017. GMR insisted that any industrywide interim license would need to afford GMR the possibility of securing industry payments totaling $2.5 million per month during the interim fee period (exclusive of licensee payments from and operators who had executed separate licenses with GMR).

“GMR mischaracterizes this arrangement as a negotiation with the RMLC. The RMLC characterizes it as a non-negotiable, take it or leave it proposition from GMR that entailed no negotiation whatsoever as to the level of interim fee. Second, GMR incorrectly states that the quoted interim license fee was ‘calculated by the RMLC.’ Again, we felt it was important to provide the option of an interim license option for our constituents while we litigate our antitrust claims against GMR. GMR insisted that it would not offer an interim license unless the RMLC provided GMR with an interim fee allocation model that would total the demanded $2.5 million per month. We elected to mirror the revenue-driven structures in place with BMI and ASCAP, on a pro-rata industrywide basis by station. The RMLC believed that operators would be better served with the RMLC’s input here than to leave the process entirely to the whim of an organization that lacked the necessary resources to drive the process to a rational conclusion.

“The RMLC did not dictate and, indeed, has never seen GMR’s final interim fee calculations,

nor would the RMLC ever entertain any involvement whatsoever in GMR’s final fee calculations. The RMLC believes that these GMR representations, as to the level of RMLC involvement with their interim license offering, border on bad faith at the very least and are intended to lend an RMLC stamp of approval to the process. To be clear, the RMLC does not recommend nor disparage GMR’s interim license offering. Whether or not to pursue the offering (or any other license terms) is an individual choice for any operator to make.”

We reached out for a comment from GMR on Christian’s letter and did not hear back. The feud all started back in November when the RMLC filed a lawsuit against Azoff’s organization for anti-competitive behavior. Azoff returned fire with a lawsuit of his own, calling the radio industry a cartel.

Best,
Ed Christian
RMLC Chairman