BMI enjoyed a double win Tuesday (March 28) in a federal rate court decision that will increase the royalties the performance rights organizations’ songwriters earn at live events.
The federally adjudicated decision in BMI’s rate case against Live Nation, AEG and the North American Concert Promoters Association (NACPA) awarded a 138% increase in rate to 0.5% of the event’s revenue. It also expands that revenue base to include a cut of concert hall VIP packages and box suites, tickets sold directly to the secondary market and servicing fees received by the promoters.
Previously, the revenue definition only reflected earnings directly from the face value of primary market ticket sales.
The rate and expanded revenue base applies to the period of mid-2018 through Dec. 31, 2022.
On the flipside, Southern District of New York Judge Louis Stanton, who handed down the rate court decision, rejected BMI’s attempt to ditch the historical 10% discount fee that the trade group and its promoters get for helping to administer the license on behalf of BMI. As well, BMI’s effort to expand the revenue base to also include sponsorship and advertising revenue was also rejected.
“This is a massive victory for BMI and the songwriters, composers and publishers we represent,” BMI president Mike O’Neill said in a statement. “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.”
“We advocated on behalf of artists to keep their costs down, and managed to hold the increase to less than 1/3 of BMI’s proposed increase,” said a Live Nation spokesperson in a statement. “This will cost the performers we work with approximately $15 million a year spread out over thousands of artists, and cost increases for Live Nation directly are not material.”
Prior to this decision, BMI and the live concert industry have been operating under a license negotiated in 1998 that was renewed twice through June 30, 2013. That agreement called for promoters to pay a performance licensing rate of 0.3% of revenue for concert venues with under 10,000 seats, and 0.15% of revenue for venues with over 10,000 seats. That rate, and the revenue definition that only covered primary market ticket sales, also served as the interim rate until this decision came down today.
“NACPA appreciates that the Court rejected BMI’s fee proposal for the period commencing July 1, 2018 as unreasonable,” reads a comment from the association, emailed to Billboard. “The fees set for that period are well below BMI’s proposal. NACPA is reviewing the opinion and has no further comment at this time.”
AEG did not respond to immediate requests for comment.
