August 2017 – Update from the NRB MLC

Dear Friends:

The past two weeks have brought encouraging news!

Radio Industry Wins SESAC Arbitration: the Radio Music License Committee (RMLC) announced that a “substantial fee reduction” was awarded it by the arbitrators who heard testimony in an historic arbitration.

Although your committee was not directly involved, most NRBMLC commercial stations opted in by invitation from RMLC to this proceeding for the period 2016-2018. The arbitration was a result of an antitrust claim filed against SESAC by RMLC in 2012. In a court settlement, SESAC agreed to be subject to license fee adjudication for 20 years. The next arbitration covering 2019-2022 will likely begin next year.

Those who have been in the radio industry for a while have witnessed continuing “rate-creep” by SESAC. Research shows that SESAC’s share of radio spins is miniscule by comparison to that of ASCAP and BMI, but SESAC’s rates have continued to soar. That party appears to have ended.

RMLC highlights of the arbitrators’ decision are as follows:

•SESAC’s license agreement will transition to a percentage of revenue fee structure, like the ASCAP and BMI formulae.

•SESAC will continue to maintain its so-called Talk Amendment, but at a deep 77.5% discount.

•Unlike the ASCAP and BMI licenses, SESAC’s license will not require a minimum fee.

•SESAC’s licenses will transition from three separate agreements to a unitary license covering over-the-air, streaming and HD multicasting.

The arbitrators’ decision is retroactive to January 1, 2016, and provides credits for RMLC-represented stations that have paid SESAC’s interim fees at 2015 rates for payments exceeding the now-final rates.

Impact on SESAC’s Noncommercial Rates: Since the above provisions apply to commercial stations only, it is not known how this outcome will affect SESAC’s noncommercial rates. Those rates are negotiated each five years by noncommercial NRBNMLC under the jurisdiction of the Copyright Royalty Board. Current rates will not likely be affected by this reduction until the next proceeding.

Those of us who have been in this fight for years hardly dared to dream of this outcome, and are very grateful to the RMLC for its work. Meanwhile, your continuing generosity keeps our efforts alive!!

Gratefully,

Russ Hauth
Executive Director

4880 Santa Rosa Road, Camarillo, CA 93012
(805) 482-7290 • www.nrbmlc.com

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