BMI Wins Rate Court Ruling To Get Songwriters Paid 138% More From Live Events

BMI celebrated a twofold victory on Tuesday (March 28) in a federal appeals court judgment that will raise the payments that the songwriters of the performance rights organizations receive from live performances.

A 138% increase in rate to 0.5% of the event’s income was granted in the federally adjudicated ruling in BMI’s rate action against Live Nation, AEG, and the North American Concert Promoters Association (NACPA). It also broadens that revenue source to incorporate a portion of box suites and VIP packages sold at performance halls, tickets directly sold on the secondary market, and promoter servicing costs.

Previously, only profits derived directly from the face value of primary market ticket sales were included in the revenue definition.

The rate and broadened revenue base are valid from the middle of 2018 through December 31, 2022.

BMI president Mike O’Neill declared in a statement that “this is a huge victory for BMI and the songwriters, composers, and publishers we represent.” “It will significantly and permanently improve the amount of royalties they get for live concerts. We are pleased that the Court shared BMI’s view that songwriters’ and composers’ music is the foundation of the live performance industry and should be rewarded accordingly. The ruling made today highlights BMI’s ongoing commitment to fight for our affiliates no matter how long it takes to guarantee that they are fairly compensated for their creative labor.

On the other hand, BMI’s attempt to abandon the customary 10% discount charge that the trade group and its promoters receive for assisting with the license administration on behalf of BMI was rejected by Southern District of New York Judge Louis Stanton, who rendered the rate court ruling. BMI’s attempt to broaden the revenue base to include sponsorship and advertising revenue was also unsuccessful.

The 0.5% rate is also less than the 1% rate of income that was first asked from the promoters when negotiations first started and the subsequently reduced proposal of 0.8% of revenue when BMI decided to file a lawsuit in rate court.

According to a Live Nation spokeswoman speaking to Billboard, “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.” The musicians we work with will bear a yearly cost of $15 million, divided among thousands of artists, and cost increases for Live Nation directly are not significant.

The trade association for concert promoters, NACPA, was also appreciative that the judge did not grant BMI their overall rate request of 0.8%.

In a statement to Billboard, a NACPA representative said, “NACPA appreciates that the Court rejected BMI’s fee proposal for the period beginning July 1, 2018 as unreasonable.” “The fees specified for that time are far less than BMI’s proposal. NACPA is examining the opinion and is at this moment unable to comment further.

In a statement regarding the decision, AEG reaffirmed the position of other promoters in favor of protecting artists.

An AEG spokeswoman claimed in a statement that “AEG Presents and NACPA were defending performing artists, who bear the costs of BMI fees, in this litigation.” “As a result, BMI received a lot less money than it requested, which is a big win for performing artists. Every artist who earns a living performing on our stages will always have the support of AEG Presents.

Before this ruling, BMI and the live music sector had been functioning under a temporary agreement that was agreed in 1998 and extended twice through June 30, 2013. In accordance with that agreement, concert promoters were required to pay performance licensing fees at a rate of 0.3% of revenue for venues with fewer than 10,000 seats and 0.15% of revenue for those with more than 10,000 seats. From mid-2013 through December 31, 2017, when this ruling was issued, that rate served as the interim rate, along with the revenue definition that exclusively took into account primary market ticket purchases.

The revised rate structure, as submitted by BMI and accepted by Judge Stanton, is listed below and is effective retroactively from July 1 through December 31, 2017. However, the judge also decided that these rates are based on the earlier, more restrictive revenue definition, in contrast to the new revenue definition for the 2018–2022 period.

Up to 2,500 seats, rate is 0.8% of revenue
2,501 to 3,500, rate is 0.6% of revenue
3,501 to 5,000, rate is 0.4% of revenue
5,001 to 9,999 seats, rate is 0.3% of revenue
10,000 or more seats, rate is 0.15% of revenue

According to sources, the intermediate rates of revenue for venues with 10,000 or more patrons and venues with patron sizes under 10,000 yielded an effective blended actual rate of 0.21% of revenue overall during the prior period, which is what is used to support the 138% rate rise claim.

According to sources, the $21 million in royalties BMI received from concert promoters the previous year, as reported by Music Business Worldwide, is “roughly correct.”

According to sources, BMI is negotiating a license with NACPA for the years 2023–2027 and has offered an unknown fee proposal. That suggested rate quote will probably be reviewed in light of the court’s recent rate judgment.

BMI Wins Rate Court Ruling To Get Songwriters Paid 138% More From Live Events

BMI celebrated a twofold victory on Tuesday (March 28) in a federal appeals court judgment that will raise the payments that the songwriters of the performance rights organizations receive from live performances.

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