The Radio Music License Committee says, following an arbitration proceeding, all RMLC-represented stations were awarded a more-than-60% discount off the SESAC radio station license rate card. The fee reduction applies for the license period January 1, 2016 through December 31, 2018. The RMLC says radio stations will receive a combined credit worth tens of millions of dollars.
The arbitration was the result of antitrust litigation instigated by the RMLC against SESAC in 2012. The matter was settled in 2015 on the basis that SESAC would agree to have its license fees determined by binding rate adjudication for the next 20 years.
SESAC had offered stations that chose not to arbitrate only a 5% discount. In contrast, many of the RMLC-represented stations that chose to participate in the arbitration, and that overpaid SESAC on an interim basis since 2016, will now receive a combined credit worth tens of millions of dollars.
The RMLC says the arbitrators’ decision “is a significant favorable step in the right direction for the radio industry, bringing SESAC’s license fees and rate structure more into line with the rate formulas used by ASCAP and BMI. The percentage-of-revenue license structure is an improvement over SESAC’s long-criticized rate card. Highlights of the decision include:
– For the first time ever, the SESAC license agreement will transition to a percentage of revenue license structure. Rather than relying on SESAC’s rate card, the arbitration panel determined that – SESAC’s blanket fee for the 2016-18 license period should be set at 0.2557% of the same net revenue reported to ASCAP and BMI.
– SESAC will continue to maintain its so-called All-Talk Amendment at an even greater discount of 77.5%. This will enable eligible non-music-format stations to receive an increased discount from the – SESAC blanket license rate. And it remains the case that this license form does not require the radio operator to file any music usage reports.
– Unlike the ASCAP and BMI licenses, SESAC’s license will not contain a minimum fee.
– For the first time ever, the SESAC license structure will transition from three separate agreements to a unitary license that will include coverage for over-the-air, HD multicasting, and streaming.
