Two years of litigation involving 7.5M musical works and 10K radio stations is now at an end, with the acceptance of a new deal by Judge Louis L. Stanton, of the Federal District Court for the Southern District of New York. Radio interests see the agreement as a correction taking into account new business realities.
“This is a gratifying result for the radio industry. The new BMI license reflects the reality of our industry’s economy and puts the industry back on a sound footing insofar as its licensing relationship with BMI is concerned,” commented RMLC Chairman Ed Christian, CEO of Saga Communications. “We appreciate the good will which BMI has demonstrated in working with our industry to get this resolution.”
The Radio Music License Committee noted that fees for both BMI and ASCAP had grown to be about 3% of total revenue each, and had to be brought back down to earth. The current deal with BMI is expected to save radio stations $80M in 20120 alone.
Here are the highlights the new agreement:
* A $70.5 million industry fee credit against 2010-2011 industry payments that is immediately available to the industry (this, in addition to the industry’s retention of $40 million in fee reductions that had been voluntarily agreed to by BMI at the interim fee stage of litigation in calendar year 2010);
* A 1.7% of gross revenue fee structure for stations on the blanket music license format, less a standard deduction of 12% for revenue derived from terrestrial/analog and HD multicasting broadcasts and a 25% standard deduction for revenue attributable to new media uses;
* Retention of the program-period license that benefits many “news-talk” format stations, with a base fee of 0.2958% of gross revenue, less the same standard deductions; and
* Expanded rights coverage to accommodate the industry’s developing new media platforms related to Internet websites, smart phones, and other wireless devices.
