Concert promoters and artists will have to pay a larger chunk of change to songwriters, composers and publishers thanks to a rate court ruling in a long-running dispute between performing rights organization BMI and Live Nation, AEG Presents and the North American Concert Promoters Association. The Southern District of New York – the rate court handling the litigation – issued a ruling today raising the rate on live revenue paid to BMI-affiliated creators by 138% over the historical rate – though, as pointed out by Live Nation and NACPA, the rate is far less than the PRO had requested.
The decision “ends decades of below-market rates for songwriters, composers and publishers in the live concert industry,” according to BMI, which says payments will come from tickets sold on the secondary market, servicing fees received by the promoters and revenues from box suites and VIP packages.
Though the rates will increase, both sides are claiming at least partial victory – BMI categorizing the decision as “massive” and promoters relieved the increase is far less than the PRO sought.
Live Nation did not immediately respond to Pollstar’s request for comment, but a representative told Variety that the rate hike amounts to “less than one-third of BMI’s proposed increase” and estimated the cost to its promoters will be approximately $15 million annually, “spread out over thousands of artists, and cost increases for Live Nation directly are not material.”
An AEG spokesman released a statement to Pollstar via email: “AEG Presents and NACPA were defending performing artists, who bear the costs of BMI fees, in this litigation. The result is that BMI was awarded significantly less than it sought, which is an important benefit for performing artists. AEG Presents will always support all of the artists who make their living on our stages.”
“This is a massive victory for BMI and the songwriters, composers and publishers we represent,” BMI President and CEO Mike O’Neill stated. “It will have a significant and long-term positive impact on the royalties they receive for the live concert category. We are gratified the Court agreed with BMI’s position that the music created by songwriters and composers is the backbone of the live concert industry and should be valued accordingly. Today’s decision also underscores BMI’s continued mission to fight on behalf of our affiliates, no matter how long it takes, to ensure they receive fair value for their creative work.
“While we’re thrilled with this outcome, we find it incredibly disappointing that it took millions of dollars and years of litigation to get Live Nation, AEG and NACPA to finally pay songwriters, composers and publishers what they deserve.”
BMI filed the petition on Sept. 24, 2018, seeking 1.15 percent of revenue from NACPA members, more than six times greater than the 0.19 percent of revenue venues currently being paid, and wanted the rate to apply to sales beyond tickets.
At the time, NACPA attorney Benjamin Marks told Pollstar in a statement that BMI’s request was “a massive, unprecedented and unjustified increase in the royalty rate” from its members. He added, “NACPA members are committed to paying a reasonable and fair rate for the use of all compositions, and the BMI rate court exists to ensure that NACPA members and other licensees have access to BMI’s repertoire at a reasonable rate.”
Performance royalties can be confusing – especially for large PROs like BMI and ASCAP. First, venues must acquire blanket licenses from performing rights organizations to play any song in their repertoires. In turn, BMI and ASCAP, because of consent decrees each PRO has with the U.S. Department of Justice (some more than 80 years old) must fulfill any request for a license. But if the PRO and licensee do not come to terms, the wheels need not come to a halt. Instead, the parties take the matter to court. In the meantime, the licensee operates on an interim basis.