BMI Files Petition Against NACPA; Wants Rates Raised to 1.15% Of Gross Including Sponsorship, Secondary Market And VIP Packages

BMI on Sept. 25 filed a petition in federal rate court against the North American Concert Promoters Association, saying that the rate the industry group pays for live concerts is not in line with global industry standards.
“The live concert industry is built on the music created by songwriters and composers. Yet, BMI’s affiliated songwriters and composers receive far less than one percent of the revenues generated by these live music performances in the form of license fees,” the petition filed Sept. 24 in United States District Court reads.  “At present, BMI’s total license fees from this $10.5 billion-per-year-industry are less than $20 million annually—an effective rate of less than 0.19% of revenue.”
NACPA negotiates licenses on behalf of the live concert promoters operating in the United States. 
BMI is a performing rights organization that collects fees on the behalf of songwriters and publishers, representing 14 million musical works created and owned by more than 900,000 songwriters, composers and music publishers.
The petition calls for a blanket license fee of 1.15 percent of gross revenues for the period from July 1, 2018, to Dec. 31, 2022, including more than just ticket sales. The petition specifies notes secondary market sales, sponsorship revenue, VIP packages, ticket broker charges “and other relevant streams of income” as part of the pool to collect from. 
Mike Steinberg, executive vice president of licensing & creative for BMI, stated, “We have spent nearly five years attempting to finalize new rates with NACPA that more closely align with the higher rates NACPA members have already agreed to pay to other PROs, both internationally and in the U.S.  Instead, NACPA is attempting to shortchange BMI affiliates and rely on outdated rates that do not reflect the evolution of the music industry or take in to account the expanded revenue streams that result from the performances of BMI music.  We believe we have a compelling case and look forward to presenting our positions to the Court.”
Benjamin Marks, an attorney representing NACPA, told Pollstar in a statement, “BMI is seeking a massive, unprecedented and unjustified increase in the royalty rate paid by NACPA members for the right to publicly perform compositions in BMI’s repertory. BMI’s rate proposal is patently unreasonable. NACPA members are committed to paying a reasonable and fair rate, for the public performance of all the copyrighted compositions and they will not be bullied by BMI’s demands or its commencement of a rate court proceeding.”
A judge can determine a reasonable rate and may begin a discovery period following the filing of BMI’s petition.