The US commercial radio industry is facing claims that it is acting as a cartel by the country's smallest collective management organisation, Global Music Rights (GMR).
GMR, which was launched in 2013 by artist manager Irving Azoff and is run by former ASCAP executive Randy Grimmett, has filed suit against the Radio Music Licensing Committee (RMLC) in federal court for antitrust violations. RLMC is a non-profit body which represents some 10,000 commercial radio stations in the US and deals with licensing matters on their behalf.
GMR – which represents the rights to 71 songwriters, including Justin Bieber, Smokey Robinson, John Lennon, Steve Miller, Shakira, Drake, Randy Travis and Kenny Chesney – alleged in the suit that RMLC “wrongfully colluded to underpay songwriters to play songs on the radio,” according to a statement by GMR. Azoff has described the case against the RLMC as “the most important fight of my professional life.” Azoff added: “I will not stop the fight for fairness to artists and songwriters.”
According to GMR's complaint, US radio stations represented by the RLMC control more than 90% of radio industry's revenues and is acting as a cartel. Attorney Daniel Petrocelli of O'Melveny & Myers, who represents GMR, said that station owners conspired to exercise their "collective muscle" and keep their music costs low rather than compete with one another for content. GMR is seeking “antitrust damages” and “an injunction forbidding the cartel from continuing its anticompetitive conduct.”
"This cartel has been a smashing success,” Petrocelli said in a statement. “Music is the lifeblood of terrestrial radio but, because of the conspiracy, owners of terrestrial radio stations pay only about 4% of their revenue—a tiny fraction—to the songwriters who create that music. Other media distributors such as streaming music services, which are not part of the terrestrial radio cartel, pay substantially more money to songwriters.”
The RMLC Executive Director Bill Velez called the claim that it acted as a cartel “frivolous and offensive.” He said that the fight between the RMLC and GMR stems from GMR’s attempt to impose monopoly pricing on the radio industry, and the RMLC’s opposition to that plan.”
Velez added that the RLMC “will not roll over in the face of the baseless, bullying lawsuit filed by Global Music Rights. GMR’s lawsuit is an obvious ploy designed to pressure the RMLC in response to the antitrust suit the RMLC filed against GMR.”
The lawsuit comes at a time when the two largest performance rights organisations ASCAP and BMI are currently going through rates proceedings and that the RLMC and GMR are negotiating licensing agreements for the use of GMR's repertoire. Unlike ASCAP and BMI, the USA's third PRO, SESAC, is not bound by consent decrees but settled with the RLMC in the summer of 2015 after litigation procedures.
GMR's legal action follows an antitrust lawsuit filed mid-November by the RLMC against GMR in the US Eastern District of Pennsylvania Court for “anticompetitive behaviour that, if unchecked, would allow GMR to charge the US commercial radio industry monopoly prices to publicly perform musical works in the GMR repertory,” according to RLMC. The RMLC seeks “injunctive relief, requiring, among other things, that GMR submit to a judicial rate?making procedure comparable to what the consent decrees governing ASCAP and BMI impose.”
