SESAC Owner Requests Changes To Music Modernization Act

– SESAC

The Music Modernization Act is well on its way to becoming law in the U.S., but a potential schism may be opening among parties that have voiced support for the legislation.

The wave-makers, according to Variety, are private equity firm Blackstone, and SESAC, which the firm acquired in 2017. Blackstone submitted a proposal July 17 that proponents claim would sandbag the legislation, the magazine reported.

SESAC bought the licensing firm Harry Fox Agency, which bills itself as the “leading provider of rights management, licensing, and royalty services for the U.S. music industry,” in 2015. Now, Blackstone and SESAC are trying to make sure the MMA secures a place for Harry Fox Agency to compete with the legislation’s proposed Mechanical Licensing Collective, which would include self-published songwriters on its board. 

While larger PROs like ASCAP and BMI are strictly regulated, smaller PROs like SESAC and Global Music Rights have traditionally not been subject to the same standards, which led SESAC to settle a legal battle with the Radio Music Licensing Committee, which is fighting GMR over similar issues.

The Music Modernization Act is an attempt to streamline and modernize what many in the industry argue are antiquated and inefficient systems. Dina LaPolt, attorney advocating for the MMA, told Variety: “We worked very hard to get songwriters on the governing board of the Music Licensing Collective so they can be involved in the oversight of properly matching the mechanical royalty income. We cannot have a competing entity.  We are in this problem because of HFA’s inability to effectively license. HFA should just shut their doors, fire everyone, and sell off all their furniture.”

Harry Fox Agency specializes in mechanical license fees, which are paid to license the manufacturing and distribution of CDs, vinyl records, streams, and other products for songs not owned or controlled by the artist/producer. HFA says the rate for songs under five minutes in length is about 9 cents per physical format and digital download and streams are calculated by formulas that divide payable royalties by number of streams.

SESAC provided the following statement to Pollstar voicing its support of the MMA: “SESAC is America’s 2nd oldest PRO. We have a long history of advocating on behalf of songwriters and providing a premium value for their work unavailable at other PROs in the U.S. since the 1940s. SESAC is a driver of competition that benefits ALL songwriters. 

“SESAC wholeheartedly supports the goals of the Music Modernization Act and wants those goals made law.  We are concerned that a lack of competition might damage not only our business, but songwriters too. We’ve suggested a simple amendment to improve competition so we can continue to ensure that ALL songwriter and publisher royalties continue to grow. Any assertion to the contrary is simply dishonest.”