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American Society of Composers, Authors and Publishers (ASCAP) has launched a new social media campaign that appears to be in response to a recent Billboard exclusive that revealed that ASCAP’s main competitor, Broadcast Music Inc (BMI), may sell itself to a private equity firm. Sources say the potential deal has an estimated price tag of $1.7 billion.
Just two days after the Billboard story was published on last Wednesday (Aug 23), ASCAP — which, along with BMI, is one of the largest U.S.-based performing rights organizations — posted a graphic on Instagram and X (formerly known as Twitter) that read: “ASCAP. Creators first. Not for profit. Not for sale.” In the caption of the post, ASCAP continued to point out that it is the “only U.S. PRO that operates as a not-for-profit” and that it is the “only one founded and governed by songwriters, composers and music publishers.”
In the last three days, the organization has posted seven other similar posts on its socials, seemingly highlighting their distinctions from BMI. The posts include quotes like: “Private equity never wrote an iconic love song,” “ASCAP. Growth without greed,” and “ASCAP writers. Who owns us? Who gets paid? You. And you.”
ASCAP CEO, Elizabeth Matthews, provided a statement about the social campaign to Billboard, saying “it’s important for everyone to understand what makes ASCAP different. We are a membership association, founded and run by songwriters, composers and music publishers. We are the only US PRO that operates as a not-for-profit, and our distribution policy is set by a board of writers and publishers, who are elected by our members. ASCAP’s governing articles require us to put creators first, which puts us in a category of one. And we’ve been overwhelmed by the positive response from our members.”
“Our focus is not on how our competitors position themselves,” replied a representative of BMI when asked to comment on ASCAP’s latest social posts. “Relying on the past never sustained a business for the future. Our goal is to stay ahead of the changing industry and invest in our business to grow the value of our affiliates’ music. Any path forward would prioritize the best interests of our songwriters, composers and publishers, including their financial success. Our focus is on delivering for our affiliates.”
BMI first began experimenting with its business model in March 2022 when it hired Goldman Sachs as an outside advisor to explore new strategic opportunities for growth. This was believed to include a possible sale to an outside firm, but by August 2022, Bloomberg announced that BMI had ditched its exploration of such a sale. A few days later, Billboard found that the PRO laid off about 30 staffers from its workforce, citing “uncertain” economic conditions.
By October 2022, BMI announced that it would be switching from its 80-plus year status as a non-profit organization to a for-profit company. In an interview with Billboard at the time, the company’s CEO and president, Mike O’Neill, explained that the company made this switch because “growth requires investment, not just maintenance… This new [commercial] model will grow at a faster rate.”
This summer, reports surfaced that BMI was once again considering a sale. O’Neill explained to his staff in a memo that the company’s new for-profit model and recent investments into improving its operations “has only intensified outside interest” in purchasing the PRO.
Amid growing concern about the future of BMI, songwriter groups — including Songwriters of North America, Black Music Artists Coalition, Music Artists Coalition, Artists Rights Alliance, and SAG-AFTRA — provided Billboard with an open letter to BMI on Aug. 18. Outlining three areas of concern, the songwriter groups question how they will be impacted by BMI’s increased profits; the proceeds from any potential BMI sale; and what may happen operationally at BMI in the event that the organization is sold. “Songwriters have a right to understand these decisions and how it impacts us,” the letter read.
Days after, Billboard reported that multiple sources say BMI is considering an offer to sell to New Mountain Capital, a private equity firm that has been quietly shopping for music assets over the last few years, according to sources. The deal has yet to be signed, as New Mountain Capital has entered an exclusive window to scrutinize the deal. Sources suggest that the deal, if it takes place, will be worth around $1.7 billion.
In response to that exclusive, the same songwriter groups provided Billboard with another open letter to BMI on Aug. 28, expressing that they were “extremely disappointed and upset” to hear the news of a possible sale. The coalition asked for BMI’s chief executive to respond to songwriters with more information “prior to taking any other action” towards the possible sale to New Mountain.
A coalition of songwriter and artist groups have expressed that they are “extremely disappointed and upset” with BMI in a letter to the firm’s CEO and president Mike O’Neill. Obtained by Billboard, the letter is written in response to last week’s news that the performing rights organization may sell to private equity firm New Mountain Capital for around $1.7 billion, according to multiple sources.
Consisting of Songwriters of North America (SONA), Black Music Action Coalition (BMAC), Music Artists Coalition, Artist Rights Alliance, and SAG AFTRA, the coalition’s new letter asks O’Neill for “real, substantive answers” to questions they posed to the company leader in a previous letter from Aug. 18, citing that O’Neill’s original response did “not answer any of [their] questions.”
The Aug. 18 letter addressed three major concerns: BMI’s profits; the proceeds from any potential BMI sale; and what may happen operationally at BMI in the event that the organization is sold.
Five days later, on Aug. 23, Billboard reported that BMI was, in fact, in the process of selling. Spurred by that report, the coalition wrote their second letter to O’Neill, asking for the executive to respond to songwriters “prior to taking any other action” towards its possible sale. “If you do not want to provide us with written answers, we are happy to meet with you as a group,” it says.
They also call out BMI for responding to their last request by saying that there was an uplift in BMI’s distributions last year. “Of course distributions went up — all PROs’ revenue went up,” the new letter reads. “This does not answer any of our questions. And it does not explain where the $145m EBITDA (as reported by Billboard today) came from and why that money was not distributed to songwriters.”
A representative for BMI replied to the letter in a statement to Billboard a few hours after its receipt, saying, “Relying on the past has never sustained a business for the future. Our goal is to stay ahead of the changing industry and invest in our business to grow the value of our affiliates’ music. Any path forward would prioritize the best interests of our songwriters, composers and publishers, including their financial success. Our focus is on delivering for our affiliates.”
BMI’s changing business model has been the source of concern and confusion within the music industry since March 2022. At that time, it was reported that the performing rights organization had hired Goldman Sachs as an outside advisor to explore new strategic opportunities for growth. As a non-profit organization since its inception over 80 years prior, the Goldman Sachs news signaled a major shift for BMI and was rumored to include a possible sale to an outside firm. In August 2022, however, Bloomberg announced that BMI had ditched its exploration of such a sale. A few days later, Billboard reported that the PRO laid off “just under 10%” of its workforce, about 30 people, in order to approve “efficiency” during “uncertain economic times,” said O’Neill in a company-wide email.
Last October, BMI announced that it would be switching from its non-profit status to become a for-profit company. O’Neill explained to Billboard that the company made this switch because “growth requires investment, not just maintenance… This new [commercial] model will grow at a faster rate.” Given the fast-shifting performance royalty landscape, moving from in-person to mainly digital collections, BMI appeared to want to invest more in modernizing its operations with its new model.
This summer, BMI resurfaced the potential of selling to an outside firm. In a memo to staff in late July, O’Neill said that the company has been increasingly interested in a sale over the last year. He added that by leveraging the company’s new for-profit model and recent investments made into BMI to improve its operations, BMI “has only intensified outside interest.”
Read the songwriter groups’ full letter here:
Mr. Mike O’NeillBroadcast Music, Inc.
Re: BMI
Dear Mike:
We were extremely disappointed and upset to read the announcement of BMI’s sale to New Mountain Capitol.
Songwriters have real questions and deserve real answers before any further action is taken. While we appreciated you responding to our letter, all of our questions went unanswered.
Your response was that distributions went up last year. Of course distributions went up – all PROs’ revenue went up. This does not answer any of our questions. And, it does not explain where the $145m EBITDA (as reported by Billboard today) came from and why that money was not distributed to songwriters.
We understand that a deal has been agreed, but has not closed. Prior to taking any other action, we are giving you another opportunity to provide songwriters with real, substantive answers to the questions we posed.
If you do not want to provide us with written answers, we are happy to meet with you as a group.
Sincerely,
Black Music Action CoalitionMusic Artists CoalitionSongwriters of North AmericaSAG-AFTRAArtist Rights Alliance
BMI has accepted an offer to sell to New Mountain Capital, a private equity firm that has been quietly looking at music assets over the last few years, according to sources. It’s unclear if the deal has been signed yet.
Sources suggest that New Mountain Capital will pay about $1.7 billion for BMI which claims $145 million in earnings before interest, taxes, depreciation and amortization in its first year acting as a for-profit entity, which was announced last October. That suggests that BMI — aka Broadcast Music Inc. — is trading on a nearly 12 times EBITDA multiple. Since BMI has no debt, it’s likely that New Mountain Capital will use a healthy level of debt to finance the deal.
According to New Mountain Capital’s website, the firm has $40 billion in assets under management and chases a “growth-oriented, value-add investment approach, rather than reliance on excessive risk, as the best path to high and consistent long-term returns.” The firm has made investments in such industries as software, business services, information and data, logistics and financial services among a few other sectors.
Besides New Mountain, sources say, bidders included Apollo Global Management, Brookfield Asset Management and its music investment Primary Wave, and RedBird Capital Partners. New Mountain and Brookfield/Primary Wave became the finalist, until BMI accepted New Mountain’s offer. Moreover, sources add that Moelis & Co. has been acting as an advisor to New Mountain while BMI has acknowledged that it hired Goldman Sachs to explore a strategic partnership.
BMI first put itself up for sale last year and at the time said it was switching from a not-for-profit operation to a for-profit company. In its fiscal 2022, before it switched to a for-profit entity, BMI reported that it collected $1.573 billion, while distributions totaled $1.471 billion. While the company has stated that the move is being made to benefit its affiliates and will allow the company to spend more money on developing technology and infrastructure so it can better services and songwriters, the strategy shift has caused consternation among songwriters and publishers.
Last week, a group of songwriters and creative advocates wrote a letter to BMI asking how such a move would benefit songwriters and questioning whether the profit would come at the expense of songwriter payments. The groups that signed the letter were Black Music Artists Coalition; Music Artists Coalition; Songwriters of North America; SAG-Aftra and Artists Rights Alliance.
Since its formation in 1940, BMI has been operating as a not-for-profit organization, paying out all of the money it collects to songwriters and publishers, even though it was a private company. In response to the songwriter and creator organization letter, BMI president Mike O’Neill said that because of its first year acting as a for-profit entity, it has allowed the company to upgrade its services portal, including new dashboards, among several other initiatives. He also said in pursuing a BMI sale, the company “would ensure that any partner embraces our mission of prioritizing the interests of songwriters, including their financial success.
BMI declined to comment for this story, and other firms mentioned didn’t immediately respond to a request for comment or couldn’t be reached.
Performance Rights Organization BMI is engaging with outside parties over the possibility of a sale, as the organization seeks to continue its transition into a for-profit entity. But where those profits will come from is of concern to several groups that advocate on behalf of songwriters, who have sent an open letter to BMI CEO Mike O’Neill addressing the issue.
Chief among those concerns is whether any profits that BMI does accrue will come at the expense of royalties that would otherwise be paid out to songwriters for the exploitation of their works, which is the business in which BMI has operated for more than 80 years. In its most recent annual report, for the year ended June 30, 2022, BMI — which represents repertoire by songwriters like Kendrick Lamar, Taylor Swift and Rihanna, among some 1 million others — reported that its revenue reached $1.573 billion and that it distributed $1.471 billion to songwriters, its highest mark ever. (While BMI has always been a private company that could have operated to reap profits, it has up until last year chosen to operate as a not-for-profit entity. ASCAP, its main competitor, is a non-profit 501-C corporation.)
“Songwriters have a vested interest in changes at BMI and in any proposed transaction which is wholly dependent on songs they have written,” reads the letter, signed by the Black Music Action Coalition, the Music Artists Coalition, Songwriters of North America, the Artist Rights Alliance and SAG-AFTRA, and which was obtained by Billboard. “BMI does not own copyrights or other assets; it is a licensing entity for copyrights owned by songwriters and, by extension, publishers. Songwriters have a right to understand these decisions and how it impacts us.”
The letter outlines three areas of concern: BMI’s profits; the proceeds from any potential BMI sale; and what may happen operationally at BMI in the event that the organization is, in fact, sold.
Under the first heading, the groups ask to verify whether BMI generated $135 million in profit since the shift to the for-profit model; how those profits were generated; whether that increase in profits would benefit songwriters; and whether any future profits might come at the expense of distributions to songwriters.
The second heading questions whether songwriters, publishers or broadcasters would receive any proceeds from any potential BMI sale; and if it were the latter, if that would not be effectively a rebate on the licensing fees they pay to broadcast songs, essentially lowering the cost to their businesses.
And on the final point, the groups ask whether any writers or publishers would receive benefits that are not extended to others; ask for assurances that writers will not be driven away or discouraged from joining BMI; and whether, if BMI is sold to private equity investors, the new owners would seek profits at the expense of disbursements to songwriters.
A spokesperson for BMI did not provide a comment at time of publishing.
Last month, in a memo to staff, O’Neill sought to explain reports about BMI reopening talks for a sale, after initial conversations had stalled out last year. “Delivering for our affiliates is always our top priority, and we have a responsibility to engage in discussions with outside parties if they can help further that mission,” O’Neill wrote in the memo. “That is exactly what we are doing right now, and no final decisions have been made.”
Following that news, publishers quietly began grousing about BMI’s intention to switch to profitability, but only privately. The only major publisher who has responded to a request for comment on BMI’s move to convert to profitability was the Universal Music Publishing Group. “We don’t comment on rumor or speculation, but to be very clear, we will only support changes that increase value for songwriters and will not stand for any that result in our songwriters being paid less than what they deserve,” UMPG chairman and CEO Jody Gerson said in a statement to Billboard at the time. “We have a long history of successfully fighting for our songwriters and will continue to do so.”
Read the letter in full here:
August 17, 2023
Mr. Mike O’Neill Broadcast Music, Inc.
Re: BMI Proposed Transaction
Dear Mike:
As you know, there is no BMI without songwriters. Songwriters have a vested interest in changes at BMI and in any proposed transaction which is wholly dependent on songs they have written. BMI has been very active: BMI announced a shift to a “for-profit” model and engaged Goldman Sachs to explore a transaction where a private equity company would purchase BMI. BMI does not own copyrights or other assets; it is a licensing entity for copyrights owned by songwriters and, by extension, publishers. Songwriters have a right to understand these decisions and how it impacts us.
As advocacy organizations representing songwriters, we have questions about the impact of a proposed transaction on our songwriter members. In the spirit of transparency, we hope that you will answer the following questions:
BMI Profits
We heard that BMI has reported $135m in profits since it shifted to a “for profit” model. Is that accurate?
If so, how did BMI increase its profits so dramatically?
Will songwriters benefit from this increase in profits?
What does BMI project its future profits to be?
We all know that the way to become more profitable involves increasing revenue and/ordecreasing expenses. If revenue increases, shouldn’t that money go to songwriters? Will BMI need to reduce its distributions in order to drive future profits?
Proceeds from a BMI Sale
If BMI sells, will writers or composers receive part of the sale proceeds?
If BMI sells, will the broadcasters on BMI’s Board receive the sale proceeds?9420 Wilshire BlvdBeverly Hills, CA 90212
If so, why should broadcasters be the biggest beneficiary from a sale of a company whose only asset is songs that belong to songwriters?
If broadcasters benefit from the sale of BMI, aren’t they essentially receiving a rebate on the licensing fees they’ve paid? In other words, they got to play songs for free?
If BMI sells, will publishers receive part of the sale proceeds?
If BMI were to sell who else would receive a share of the sale proceeds?
Proceeds from a BMI Sale
If BMI sells, will writers or composers receive part of the sale proceeds?
If BMI sells, will the broadcasters on BMI’s Board receive the sale proceeds?
If so, why should broadcasters be the biggest beneficiary from a sale of a company whose only asset is songs that belong to songwriters?
If broadcasters benefit from the sale of BMI, aren’t they essentially receiving a rebate on the licensing fees they’ve paid? In other words, they got to play songs for free?
If BMI sells, will publishers receive part of the sale proceeds?
If BMI were to sell who else would receive a share of the sale proceeds?
BMI Operations after a Sale
If BMI is sold, will any writers receive a benefit that is not extended to all writers (e.g., equity or profit participation)?
If BMI is sold, will any publisher receive a benefit that is not extended to all publishers and writers?
Private equity companies have aggressive return on investment goals. Since BMI is for profit, private equity owners will demand increased profits to meet their expectations. How can writers and composers be assured that private equity owners of BMI won’t drive more profits for themselves at the expense of songwriters?
Can BMI assure writers and composers that BMI’s profit margin will not exceed what BMI currently charges writers and composers as overhead?
We have concerns that increased profits for a private equity owner could come from lowering distribution rates or decreasing distributions by driving writers away from BMI. Can you assure songwriters that neither of these things will happen?
BMI is required to provide a home to any writer who wants to join. Can BMI confirm that they will not seek to drive writers away from BMI or discourage writers from joining BMI?We appreciate your attention. We will make ourselves available so that we can better understand this process and explain it to our members. We look forward to hearing from you prior to the completion of any proposed transaction.
Sincerely,
Black Music Action CoalitionMusic Artists CoalitionSongwriters of North AmericaSAG-AFTRAArtist Rights Alliance
Additional reporting by Ed Christman.
While the Radio Music Licensing Committee awaits an appeals court decision in its so-far unsuccessful attempt to combine rate court proceedings with ASCAP and BMI under a single judge, the trade group has filed federal petitions to begin the processes separately in the Southern District of New York.
Usually, such rate proceedings petitions are initiated after negotiations between the performance rights organizations and the RMLC prove fruitless. Under these petitions, the PROs will each make the case for what rate it thinks their songwriters and publishers are entitled to receive when their songs are played on the radio. This time out, for the period of 2022-2026, the RMLC is seeking to maintain the same rates it had under the prior agreement which covered 2017-2021.
In July 2022, the RMLC tried to get ASCAP and BMI combined into a single rate proceeding, thus showing its hand that it felt rate negotiations had failed. For decades, each PRO had its own separate rate proceeding, but about seven or eight years ago, the RMLC began a new rate court strategy of trying to assign market share to the four U.S. PROs — ASCAP, BMI, SESAC and Global Music Rights — in attempt to keep the rates in parity with market share, irrespective of each PRO’s song catalog. In filing its petition to consolidate the rate proceedings to the Southern District of New York, which oversees both rate proceedings and the ASCAP and BMI consent decrees, the RMLC said the act was justified by the Music Modernization Act of 2018 that changed how the the Southern District assigns the rate court proceeding.
The step to combine the rate proceedings into one was seen by some music industry executives as a further attempt to pursue that rate strategy. Having a single judge, instead of bifurcated rate court proceedings, could benefit the RMLC because it would likely pit BMI and ASCAP against each other, vying for a higher rate than the other with both PROs arguing over market share.
But in May this year, Southern District Court Judge Stanton ruled against the RMLC’s consolidation petition so the radio trade group subsequently appealed that decision. The Second District Appeals Court has yet to issue a ruling on the RMLC motion, but in the meantime, the RMLC is getting the ball rolling with the rate court by filing amended petitions on BMI on Aug. 10 and on ASCAP on Tuesday.
Despite filing petitions for the two rate court proceedings, the RMLC petition for the ASCAP rate court proceeding says that if the Second Circuit Appeals Court ultimately agrees with the RMLC position to combine the two rate court proceedings into one, “it reserves all rights at the appropriate time” to pursue a unitary action against ASCAP and BMI.
The ASCAP rate proceeding covers the current five-year term which began on Jan. 1, 2022. In the prior term (2017-2021), RMLC said it paid a combined 3.51% of net revenue as a royalty pool for the two PROs, with ASCAP getting 1.73% of that based on market share claims it made at the time — which the RMLC now says was “a representation that turned out to be false.” Meanwhile, BMI received 1.78% of radio stations’ net revenue.
Nevertheless, in May 2022, according to the petition, the RMLC asked ASCAP and BMI if they would be willing to roll forward the combined 3.51% of net revenue royalty pool, provided that ASCAP and BMI would agree on a mechanism for assessing each of their market shares.
Although the rate level would be the same, the RMLC implies it is actually an increase because the combined ASCAP and BMI share of total performances on RMLC stations likely has diminished since when the prior agreements began, the RMLC argues in its petition.
Meanwhile, it looks like BMI is requesting a rate increase from 1.78% to 2.95%, according to what the RMLC states in the BMI petition; while the RMLC ASCAP petition doesn’t disclose the rate ASCAP is seeking.
The RMLC didn’t immediately respond to a request for comment.
“The RMLC would rather continue to waste time and money on expensive litigation than simply paying songwriters a fair royalty for the use of their music,” ASCAP CEO Elizabeth Matthews said in a statement. “It’s not that complicated. Simply treat music creators who support your successful and profitable businesses with dignity and respect and everyone wins.”
While the PROs and the RMLC wait for the rate court proceedings to make a determination, all parties have agreed to an interim rate that allows radio to continue to play music without copyright infringement.
BMI is exploring potential sale possibilities, a year after its transition into a for-profit entity, according to an internal memo from CEO Mike O’Neill that was obtained by Billboard. In the note to staff, O’Neill said, “Delivering for our affiliates is always our top priority, and we have a responsibility to engage in discussions with outside parties if they can help further that mission. That is exactly what we are doing right now, and no final decisions have been made.”
The discussions come a year after BMI had engaged Goldman Sachs to explore strategic opportunities in 2022, with one of the options at the time being a potential sale; that process ultimately did not lead to a deal. Reuters first reported that talks had reopened over a potential sale now. A spokesperson for BMI declined to comment.
In the memo, O’Neill wrote that after ending the strategic opportunities process last year, BMI chose to invest in the company “to grow the value of our affiliates’ music,” and that the change to the for-profit model, in addition to that investment, “has only intensified that outside interest.”
“It’s an exciting time for BMI and we’re in a strong position,” O’Neill wrote. “And the most important thing for us to do is keep focus and continue the great work that makes BMI the best PRO in the business. The future is filled with potential and there is no better team to tackle the numerous opportunities that lie ahead for our company and our affiliates.”
BMI, founded in 1939, represents more than 20 million works by more than 1 million songwriters, composers and publishers, including artists like Taylor Swift, Rihanna and Kendrick Lamar. In its most recent annual report, for the year ended June 30, 2022, the performance rights organization tallied revenues of $1.573 billion and distributed $1.471 billion to songwriters, its highest mark ever.
Read O’Neill’s full note below.
Hi Team,
A few press articles have come out today speculating that BMI is considering a sale. I am reaching out now because I want you to hear the background directly from me.
Not surprisingly, interest in BMI has continued since we announced a year ago that we were no longer considering a sale of our company. You may recall this was one of the options on the table when we were evaluating strategic opportunities to best position BMI for the future. Since then, the success of our business model change and our commitment to investing in BMI to grow the value of our affiliates’ music has only intensified that outside interest.
Delivering for our affiliates is always our top priority, and we have a responsibility to engage in discussions with outside parties if they can help further that mission. That is exactly what we are doing right now, and no final decisions have been made. By its very nature, speculation can often contain mischaracterizations and inaccurate information. Please don’t be distracted by this and know that I will update you directly on any new developments.
It’s an exciting time for BMI and we’re in a strong position. And the most important thing for us to do is keep focus and continue the great work that makes BMI the best PRO in the business. The future is filled with potential and there is no better team to tackle the numerous opportunities that lie ahead for our company and our affiliates.
Thank you, as always, for all you do.
MON
Reps. Ted W. Lieu (D-CA) and Ben Cline (R-VA) have joined together to re-launch and co-chair the bipartisan Congressional Songwriters Caucus to focus on advancing policies that support independent songwriters and strengthen copyright protections.
The new caucus has support from the Recording Academy, Nashville Songwriters Association International, BMI, ASCAP and the National Music Publishers’ Association (NMPA), according to a press release. No specific names of independent songwriters were included in the release, and a representative for Lieu has not responded to Billboard’s requests for more information.
The caucus was originally formed in 2003 by Sen. Marsha Blackburn (R-TN) when she served as a House representative for Tennessee. According to her website, part of her focus at the time was cracking down on China’s intellectual property theft and how that affected songwriters and other creatives.
The interests of musicians is also represented in Congress with the Recording Arts and Sciences Congressional Caucus, which was established in 2005 and continues today, helmed by Speaker of the House Kevin McCarthy (R-CA) and new Democratic Leader Hakeem Jeffries (D-NY).
Hailing from Southern California, Rep. Lieu says he understands first hand how “talented songwriters… contribute to so much of our culture and society. I’m thrilled to join Congressman Cline in co-chairing the new bipartisan Congressional Songwriter’s Caucus, which will work to support America’s brilliant songwriters by ensuring they can protect their work and make a living doing what they love. Music contributes so much to our way of life, and we must ensure those creating it are compensated fairly. I’m grateful to the numerous songwriter advocacy organizations who’ve partnered with us on the creation of this caucus and look forward to working together to support our artists.”
“Making art, specifically music, is a powerful way to leave a mark on the world,” says Rep. Cline. “It’s a part of our everyday lives, from what we listen to on our commutes in the morning, to the music we select for our most important life events, such as birthdays, weddings, and funerals. But today’s modern music landscape can make it more difficult for certain artists, especially independent songwriters, to make a living. That is why I’m proud to co-chair the Congressional Songwriters Caucus, which will play an important role in promoting the songwriting community by working to ensure the creative rights of songwriters are protected.”
“It All Begins With A Song,” says Bart Herbison, executive director of NSAI. “the entire music ecosystem. Since the Songwriters Caucus was initially launched 20 years ago, technology has completely changed the way music is delivered. American songwriters still face challenges in the digital era and we are very grateful to Congressmen Cline and Lieu for their bipartisan support.”
“On behalf of our over one million affiliates, I’d like to thank Representatives Cline and Lieu for co-chairing the Congressional Songwriters Caucus. Both have always been champions for creators, and we are in excellent hands with them leading the charge for songwriters and composers on the Hill. We stand ready to work with them to ensure creators are supported by strong copyright law and that they are fairly compensated for their work,” adds Mike O’Neill, president and CEO of BMI.
“Songwriters are the foundation of America’s vibrant music industry, and we appreciate Representatives Cline and Lieu recognizing the importance of ensuring we have champions in Congress. As technology transforms the music landscape, ASCAP looks forward to engaging with members of the Congressional Songwriters’ Caucus to protect the rights of American music creators and defend the value of their hard work and creativity,” says Paul Williams, president of ASCAP.
“We applaud Representatives Cline and Lieu for leading the Congressional Songwriters Caucus and we are excited about today’s launch. NMPA is the leading advocate for music publishers and their songwriter partners and we greatly look forward to working with the Caucus to advance policy interests that will protect creators and ensure that songwriters thrive,” says NMPA president and CEO David Israelite.
“The Recording Academy is proud to support the re-launch of the Congressional Songwriters Caucus which helps connect songwriters and composers with lawmakers to ensure that their unique interests are heard and understood. We are grateful to the new Caucus Co-Chairs, Representatives Ben Cline and Ted Lieu, for their support and leadership and we look forward to working with stakeholders across the songwriter community to advance the Caucus forward,” says Recording Academy CEO Harvey Mason Jr.
BMI’s recent rate court victory substantially increasing songwriters and publishers’ royalties for live events will be appealed, according to a notice filed by the North American Concert Promoters Association on Wednesday (June 21).
In May, Southern District of New York Judge Louis Stanton awarded the performance rights organization a 138% increase in rate to 0.5% of the event’s “revenue” with an expanded definition of the term to include tickets sold directly onto the secondary market, servicing fees received by the promoters and revenues from box suites and VIP packages. That 0.5% was up from what BMI said was a blended rate of 0.21%, based on 0.3% interim rate for venues that held less than 10,000 seats; and the interim 0.15% for venues that held more than 10,000 during the period of 2018-2022.
At that time, Stanton also set rates for the retroactive period of 2013-2017, with the previously used, less expansive “revenue” definition that only reflected earnings directly from the face value of primary market ticket sales. Those rates ranged from .08% of revenue for venues of up to 2,500 seats to 0.15% for venues with 10,000 or more seats.
On Tuesday, however, lawyers for the concert trade group filed a notice with the Southern District of intent to appeal that decision in the U.S. Court of Appeals for the Second Circuit, according to the filing submitted by Weil, Gotshal & Manges, the law firm representing the concert promoters. The notice to appeal could mean that the group will appeal; or it could be a procedural move that keeps open the option to appeal. The concert trade group had 30 days to file the appeal notice from the last day in court— a few weeks back on a BMI motion regarding interest on whatever fees might be owed from the 2018-2022 term covered by the newly set rates for that period.
In a statement BMI said the concert industry has long fought against rate increases for songwriters.
“Given Live Nation, AEG and [the North American Concert Promoters Association’s] bizarre position throughout trial that concertgoers attend concerts for the experience of the staging, videos and light shows, as opposed to the actual songs and music being performed, their appeal was not a surprise to BMI,” BMI president and CEO Mike O’Neill said in a statement. “For decades, the live concert industry has fought to keep rates suppressed. And even now, when they are making more money than ever, in more ways than ever, they are determined to deny songwriters and composers the fair value of their work, despite the fact that without their contributions, a concert wouldn’t even be possible. BMI will continue to fight on behalf of our affiliates, the creators of the music that is the very backbone of the live concert industry, to prevent that outcome.”
The concert promoters did not. respond to a request for comment at time of publishing. In May, an AEG spokesperson said “AEG Presents and NACPA were defending performing artists, who bear the costs of BMI fees, in this litigation.” Concert promoters have long billed the performing artist for performance rights organizations’ royalty fees.
Broadcast radio’s trade group is doubling down on its effort to combine federal rate court proceedings that will determine how most of the country’s songwriters get paid for airplay.
After a judge on May 26 denied the Radio Music Licensing Committee’s petition to combine rate court proceedings with leading performance rights organizations BMI and ASCAP under a single judge last week, according to a statement from BMI, the RMLC filed an appeal on Wednesday (May 31) at the U.S. Court of Appeals for the Second Circuit.
According to BMI’s interpretation of Southern District of New York Judge Louis Stanton‘s ruling denying the petition, neither the BMI Consent Decree nor the Music Modernization Act of 2018 justified the RMLC’s joint rate petition. Judge Stanton ordered the RMLC’s rate petition against ASCAP to be assigned to another judge and tried separately.
Just Stanton’s ruling instructs the court clerk to “sever all portions of the RMLC petition which seek the setting by a rate court of an ASCAP reasonable license fee under the ASCAP consent decree and assign them by the standard electronic method of selection of a judge of this court.”
The RMLC’s petition to combine the ASCAP and BMI under one judge who would simultaneously set rates for both performance rights organizations in once proceeding was based on what publishing sources have told Billboard is a wrong interpretation of the Music Modernization Act, which included a provision to moving rate hearings to a rotating roster of Southern District judges.
Having a single judge, instead of bifurcated rate court proceedings, could benefit the RMLC because it would likely pit BMI and ASCAP against each other, vying for a higher rate than the other and arguing over market share. In the past, Judge Stanton has overseen BMI rate trials and Judge Denise Cote has overseen ASCAP rate trials. Music publishing executives say that the MMA intended to keep the two-pronged approach for the PRO rate setting, but with rotating judges, not just the two who have overseen the proceedings up to now.
“We are extremely pleased that the RMLC’s latest attempt to deny fair compensation to songwriters was dismissed, and that its end run around the clear language of the BMI consent decree and the MMA was properly rejected by the Court,” BMI president and CEO Mike O’Neill said in a statement. “This would have cleared the way for BMI to secure the appropriate value of our affiliates’ music without the distractions the RMLC was trying to create. Unfortunately, the RMLC is once again opting for litigation over negotiation, and we will continue to do what is needed to protect the essential contributions our affiliates make to the radio industry.”
“It is unfortunate that the RMLC refuses to negotiate to pay songwriters fairly,” added ASCAP CEO Elizabeth Matthews in her own statement. “ASCAP is focused on obtaining fair market rates from radio for our more than 900,000 songwriter, composer and music publisher members. ASCAP will vigorously defend the value of our members’ music and fight the RMLC’s harmful attempt to weaponize its cartel market power to pay songwriters less.”
The RLMC did not respond to a request for comment at time of publishing.
Khalid is set to receive the BMI Champion Award at the 71st annual BMI Pop Awards. The private event, hosted by BMI president and CEO Mike O’Neill and vice president worldwide creative Barbara Cane, will be held on Tuesday, May 9, at the Beverly Wilshire Hotel in Beverly Hills, Calif.
“Khalid exemplifies the true spirit of a champion as one who believes, one who does and one who generously gives back,” Cane said in a statement. “In addition to recognizing him for his many creative accomplishments, we’re honoring Khalid for his dedication to charitable causes, community, education, and his commitment to supporting the next generation of songwriters and music makers.”
Khalid has received 20 BMI Awards, including being named 2019 BMI Pop Songwriter of the Year. His smash “Talk” from his sophomore album Free Spirit was named 2019 BMI R&B/Hip-Hop Song of the Year.
In addition, he has been nominated for seven Grammy Awards and has won six Billboard Music Awards, three American Music Awards and an MTV Video Music Award.
Previous BMI Champion Award recipients include Keith Urban, Mark Ronson, Residente, Sebastian Krys and Lee Thomas Miller.
BMI’s Pop Song of the Year, Songwriter of the Year, Publisher of the Year and BMI’s top 50 most-performed pop songs in the U.S. of the previous year will also be celebrated at the event.
Khalid, alongside his mother, created The Great Khalid Foundation in 2020 to bridge education, innovation and music. The foundation offers music education programs, scholarship awards, community partnerships and gift giveaways to support and nurture children.