GMR Plays Hardball In RMLC Suit

The legal battle between Irving Azoff’s performing rights organization and a nonprofit representing 10,000 commercial radio stations continues to escalate and the rhetoric used suggests that the case could have a huge impact on the future of music licensing.

– Irving Azoff

The Radio Music Licensing Committee filed an antitrust suit in the U.S. District Court for the Eastern District of Pennsylvania against Azoff’s Global Music Rights in late 2016, accusing the performing rights organization (PRO) of forcing stations to pay too much for the rights to its catalog of songs, which include works by Eagles, Celine Dion, Bruce Springsteen and Pharrell Williams.

In recent years, GMR and SESAC – two small PROs that are not subject to the same regulations as the larger BMI and ASCAP – have been in the crosshairs of the RMLC, which claims they violated antitrust decrees for small PROs to jack up rates for specific songs.

GMR responded with its own antitrust suit about one month later, contracting heavyweight lawyer Daniel Petrocelli and claiming the stations were operating as a “cartel,” immorally conspiring to keep prices for popular songs unfairly low.

 In a recent development, GMR posted on its website that it is now negotiating licenses with stations directly, but because of the pending litigation it can no longer offer licenses to Pennsylvania-based companies.

The RMLC responded promptly with a massive, emergency memorandum seeking a preliminary injunction against GMR’s actions, which could deprive the Keystone State of classics like “Hotel California.”

The nonprofit claims GMR’s action is meant to intimidate stations in Pennsylvania, as the filing says GMR lawyers privately disclosed that the company might deal with those stations on the condition that they will not use their business agreements against GMR “in any way.” The RMLC claims those terms are left intentionally broad and are meant to get stations to give up legal rights.

“Final disposition of this litigation may take years,” the RMLC’s filing stated. “In the meantime, radio stations required to enter into a licensing agreement under abusive terms from which they may never fully recover, and stripping them of the choice in how they do business, will cause many to question RMLC’s role in the industry.”

The RMLC further claims that the move is an attempt to frustrate the process and goes into detail as to how it can prove GMR’s behavior is anticompetitive, citing a recent settlement with SESAC as precedent.

The real crux of the case seems to be who is bullying whom, as each party’s language represents itself as the “little guy.” 

The RMLC’s latest filing frequently refers to GMR’s behavior and power as that of a company with a monopoly on popular songs. The document cites Azoff referring to its artists as “a full roster of songwriters that nobody can, shall we say, comfortably exist without,” as proof that radio stations need GMR’s artists on its airwaves and its behavior is anticompetitive.

The post on GMR’s website, though, frames itself as a “new company with fewer than 100 songwriters,” and describes the RMLC as “the sole negotiating arm for 90 percent of the terrestrial radio stations across the country.”

The doom and gloom language used in the RMLC’s latest filing indicates that it is very concerned about the prospect of having to pay small PROs more for popular songs.

“Left unchecked, GMR’s actions herald a dark future for the industry,” the RMLC writes. “Despite its empty claim of innovations, GMR offers no new procompetitive benefits to the marketplace; three other PROs were already offering everything GMR does, but with greater flexibility.”

Of the battle, Azoff has said: “This is the most important fight of my professional life. … I will not stop the fight for fairness to artists and songwriters.”