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This is The Legal Beat, a weekly newsletter about music law from Billboard Pro, offering you a one-stop cheat sheet of big new cases, important rulings and all the fun stuff in between.
This week: Kelly Clarkson launches a new front in a legal war with her ex-husband; R. Kelly pushes to overturn his sexual abuse convictions; Ariana Grande finalizes her divorce from Dalton Gomez; and much more.
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THE BIG STORY: Kelly Clarkson Sues Her Ex-Husband
Kelly Clarkson’s ongoing legal battle with ex-husband Brandon Blackstock just got more complicated.
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Didn’t they finalize their divorce back in 2022? Sure, but that personal settlement didn’t resolve trickier business entanglements — namely, Clarkson’s relationship with Starstruck Entertainment, a management firm owned by Blackstock’s father that oversaw her career for years.
Shortly after Clarkson filed for divorce, Starstruck sued her for millions in allegedly unpaid fees, claiming it had “invested a great deal of time, money, energy and dedication” into her and had “developed Clarkson into a mega superstar.”
Clarkson responded by filing a complaint with California’s Labor Commissioner, resulting in a $2.6 million ruling last year that her ex-husband and Starstruck had violated California’s Talent Agencies Act (TAA) by serving not just as her personal managers, but as unlicensed talent agents who procured business deals.
With Blackstock currently appealing that November decision, Clarkson filed a new case in Los Angeles court this week — echoing her labor law complaint, but aiming to potentially go even further. To learn more, go read out entire story, which features the actual lawsuit Clarkson filed against Blackstock.
Other top stories this week…
R. KELLY ABUSE CONVICTION APPEAL — An attorney for the disgraced singer urged a federal appeals court to overturn his sexual abuse convictions and 30-year prison sentence, warning that the case against Kelly had stretched federal racketeering laws “to the point of absurdity” and could potentially turn college fraternities into illegal conspiracies.
MURDER CONVICTION OVERTURNED — A London appeals court overturned the murder conviction of Vybz Kartel, the Jamaican dancehall star who has worked with Rihanna, Jay-Z and others. The appellate court ruled that the guilty verdict had been tainted by a “fatal” error by the trial judge: allowing the jury to proceed as normal despite news that one of the jurors had attempted to bribe others.
THE SCATMAN COMETH — The Black Eyed Peas and Daddy Yankee were hit with a copyright lawsuit over allegations that they illegally sampled from classic ’90s song “Scatman (Ski-Ba-Bop-Ba-Dop-Bop)” in their own 2022 song “Bailar Contigo.” The case claims the artists promised only to interpolate the song and not to outright sample it, but “simply lied” in order to “avoid paying a larger licensing fee.”
JIMMIE ALLEN ASSAULT CASE DROPPED — The country star’s former manager agreed to dismiss her lawsuit claiming he sexually assaulted her, ending the case less than a year after it was filed. In the same filing, Allen also agreed to drop his countersuit accusing the woman of defamation. The lawsuit will continue against Wide Open Music, where the Jane Doe plaintiff was employed, and its founder, Ash Bowers. Allen will also continue to face a second lawsuit that claims that the singer assaulted a woman in a Las Vegas hotel room and secretly recorded it.
NBA YOUNGBOY CASE PAUSED — A federal judge ruled that the criminal case against YoungBoy Never Broke Again over gun charges must be put on hold until the U.S. Supreme Court decides a closely-watched Second Amendment battle this spring, likely delaying a trial that had been scheduled to start in July. The looming SCOTUS ruling will address a federal ban on gun ownership for domestic abusers; YoungBoy is accused of violating a similar gun ban for previously convicted felons.
DRAKE WANTS OUT OF ASTROWORLD CASE — Attorneys for the rapper asked a Texas judge to dismiss him from the sprawling litigation over the 2021 disaster at Travis Scott‘s Astroworld festival, which left 10 dead and hundreds injured. Drake was named in the cases because he performed on stage with Scott during the show, but his lawyers say he had nothing to do with planning the event and can’t be sued for simply showing up for a brief guest appearance.
THANK U, NEXT — Ariana Grande and Dalton Gomez finalized their divorce in Los Angeles family court, with the singer agreeing to pay her ex-husband $1.25 million, plus half the proceeds from the sale of their joint home and $25,000 of his attorneys’ fees; she will not pay him any ongoing alimony. The legal split was relatively easy, as the couple had signed a pre-nuptial agreement and had no children or other significant legal issues.
Kobalt Music Group, the publishing home to such names as Paul McCartney and Karol G, has landed a new $450 million revolving credit facility (RCF), the independent music publisher announced Tuesday (March 19). Explore Explore See latest videos, charts and news See latest videos, charts and news Coupled with the previously announced joint venture with […]
The Oak View Group (OVG) will soon enter a key phase of its long-planned pivot to international markets with the opening of Coop Live in Manchester, United Kingdom, next month.
After its record post-pandemic run — which included opening seven arenas in 16 months, including Climate Change Arena in Seattle, UBS Arena in New York and Acrisure Arena in Palm Springs, Calif. — the Tim Lewieke-led management and development company will transition from U.K. venue developer to U.K. venue operator in one of Europe’s largest concert and live entertainment economies.
First Manchester, then the world, says Francesca Leiweke-Bodie, OVG’s COO (and Leiweke’s daughter). She explains the United Kingdom will be the launch point for expanding the company’s private-public partnership model, which looks to government groups to aid in land acquisition in exchange for fully private financing and development work. Leiweke-Bodie says the model is key to driving expansion opportunities into Africa, Asia and the Middle East, where huge gaps in the world’s touring infrastructure prevent popular arena and stadium tours from accessing hundreds of millions of fans.
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Billboard recently caught up with Leiweke-Bodie to discuss the opening of Coop Live and detail OVG’s near-term expansion plans around the globe.
Why did OVG decide to begin their international expansion efforts with the Manchester project?
London and the U.K. have always been a frontrunner for where we as a company want to plant a flag and show the other countries and municipalities that we’re speaking to about public-private partnerships and prove what is possible when the private sector can step in and invest. That doesn’t happen as much overseas, where the market is really heavily driven by municipal financing. Having this project in the U.K., a $375 million privately funded arena with huge community support and more than $1 million going back to the local business — when other potential partners come to Manchester and see what we are doing, there is no doubt that we’re the real deal and will deliver on our promises.
What’s the biggest challenge OVG faces in its efforts to expand internationally?
I think the hardest thing to come by, whether it’s domestically or internationally, is land. We want to build in the urban core. We want to be where the fans want to be — in the city centers. We can do everything else. We’ll build it. We’ll finance it. We’ll book it. We’ll take the risk. But the partnership that we’re always looking for is the land opportunity. Most of these cities are much older than the United States with dense urban cores that we can’t even fathom. To find four or five acres available to build these types of projects with access to public transit is the crux of what we’re trying to create with these city partnerships. There’s also inbound opportunities from local owners and developers that see an opportunity to take land that they might have identified for retail and say, “Let’s rethink this.”
Once the Manchester facility opened, what’s next for OVG?
Hamilton, Ontario is next. It’s an existing 18,000-seat arena we’ve already started work on, taking the building down to its studs and [which] will reopen in late April. It’s the first project in Toronto that was a public-private partnership and ultimately became a renovation project, but it’s effectively a new arena. In North America, there’s only a few strategic markets left where one could make a really big difference with another arena. But overseas, we have a tremendous amount of opportunity because of the growth internationally of global music, from American country music to Latin.
What other metropolitan characteristics appeal to OVG?
Countries or cities that not only attract from surrounding countries but serve as the point of destination for a much broader area. One example is Sao Paulo in Brazil. From a financial perspective, Sao Paulo is an incredible point of destination for not only Brazil, but for Latin America. That’s why we want to plant our flag there because it doesn’t have an arena. Vienna, Austria is the same thing. You know, it is central to continental Europe. You can get to it from six different countries via car. We have about two dozen cities like that we’ve identified.
How does programming and booking drive the OVG strategy?
That’s such a key element. The first domino that we were really thinking about and analyzing from a construction and design perspective is making sure that the building is both turnkey and equipped with all acoustic treatments and back-of-house amenities to accommodate major tours. We talk to local promoters, and figure out what is coming in the rider and work with our partners at the building to alleviate costs. Arenas have to compete with the stadium shows and we have to make the economics work so we’re really looking at the take-home revenue for an artist to make sure that their touring costs are competitive and can exceed the expectations of fans and market partners.
A year after their separation, Ariana Grande and Dalton Gomez are officially divorced. According to the Associated Press, a Los Angeles Superior Court judgement dissolving their three-year marriage became official on Tuesday (March 19), six months after the 30-year-old “yes, and?” singer filed for divorce from 28-year-old real estate broker Gomez. The couple, who had […]
On Mar. 6, the Digital Media Association’s (DiMA) new president/CEO, Graham Davies, published a blog post calling the five-year anniversary of the Music Modernization Act (MMA) a “key moment to course-correct” in a blog post about the Mechanical Licensing Collective. In the process, he suggested the organization has “gone beyond its remit” in collecting and administering the blanket mechanical license in the United States.
On Monday (Mar. 18), the National Music Publishing Association (NMPA) responded to the letter in an email sent to members, in which it said DiMA’s “calls for change” were not “a good faith effort to make the MLC more effective and transparent.”
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So why are the two organizations sparring now?
According to the MMA, the MLC — which serves as the collector and administrator of the blanket mechanical license in the United States — is reviewed every five years by the Copyright Office in a process called “re-designation.” This process will be a routine occurrence moving forward to ensure efficiency, effectiveness and neutrality for the organization.
Now, with the MLC’s first-ever re-designation currently underway, both its critics and supporters have become more vocal in hopes of swaying the results and/or public opinion about the organization’s operations to date.
DiMA’s blog post begins by saying it “remains committed to the success of the MMA and the mechanical licensing collective it established.” Later, the letter focuses on the fact that its membership, which includes the world’s biggest streaming services, is required by the MMA to foot the bill for the MLC. While in the letter it does not ask for this arrangement to be changed, the organization does point out that it feels this system has led to a lack of incentive for the MLC to be cost-conscious, neutral and efficient.
“Reasonable costs of the collective cannot include everything from traveling to distant countries to conduct outreach to songwriters far beyond the U.S. licensing system,” writes Davies. The DiMA CEO/president, who assumed the role in January of this year, also points out that the MLC is “suing one of the licensees [Pandora] that pays its costs — using licensee money to pursue its allegations against a licensee on a novel legal theory.”
The NMPA’s reply, titled “DiMA using copyright office MMA review as opportunity to re-write history and undermine MLC’s progress,” focuses first on re-explaining to its members the history of the MMA and the MLC and the nature of the MLC’s duties before getting into its reply to DiMA. It has a far more favorable take on the MLC overall, claiming the organization “is currently the most efficient, transparent, and cost-effective licensing collective in the world.”
The NMPA goes on to say that streamers “do not want what is in the best interests of music publishers or songwriters,” calling DiMA’s “new…strategy” “an effort by the world’s largest digital companies to leverage their power to pay less, make it easier for non-compliance, and make it more difficult for the MLC to execute its statutory responsibilities as envisioned by Congress.”
“Make no mistake, when big tech says ‘course correct’ they mean a change to the carefully negotiated law to fund only MLC activities that benefit digital companies,” the letter continues.
DiMA’s blog post can be read here. The NMPA’s reply can be read in full below.
MMA Five Years On
It’s astounding how much progress can happen in five years. In 2018, the Music Modernization Act (MMA) became law, creating the Mechanical Licensing Collective (MLC) and fundamentally changing how songwriters and music publishers are licensed and paid by digital streaming services.
Since 2018, the MLC has done a great job building a rights organization that today represents thousands of rightsholders, administers over fifty blanket licenses and has distributed over $1.5 billion in royalties.
The MLC Review
Under the MMA, the Copyright Office reviews every five years its initial designation of the MLC, with the first review starting this past January.
DiMA, the trade association representing the five largest digital music companies—Spotify, Apple, Amazon, Google and Pandora (DSPs)—recently released a blog about the review process.
In it, DiMA called for radical changes that would upend the purpose of the MMA and the MLC under the guise of a “course correction” and a focus on MLC “neutrality.” Reflection at this pivotal point is necessary. But what’s clear is the digital services’ calls for change are not a good faith effort to make the MLC more effective and transparent, as they argue, but the opposite. It is time to set the record straight.
MMA History Refresher
It is important to remember that DiMA and the DSPs were significantly involved in the drafting of the MMA, which reflected the culmination of years of negotiation and consensus building among songwriters, music publishers, and digital music services.
The central compromise of the MMA was the creation of a new mechanical licensing collective to administer Section 115 streaming blanket licenses, governed by rightsholders, and funded by DSPs. The agreement to fund the MLC’s operations was made in exchange for the MLC taking on what had been the DSPs’ royalty administration responsibilities and the DSPs’ securing limited liability for hundreds of millions in statutory damages exposure due to their prior failures to properly license and distribute royalties.
The MLC’s Fundamental Role & Responsibilities
The MMA placed upon the MLC expansive responsibilities under Section 115. In addition to administering licenses and distributing royalties, the MMA provides explicitly that the MLC must handle non-compliance of DSPs through legal enforcement efforts, default of licenses and collection of late fees. It requires the MLC to audit DSPs to ensure proper royalty payments and accounting. These critical rights were traditionally held by copyright owners. However, the MMA took these legal rights from rightsholders and gave this authority to the MLC alone to act on their behalf.
Further, the law empowers the MLC to initiate proceedings before the CRB to set its funding and before the Copyright Office in rulemaking and regulatory processes on behalf of copyright owners. The MLC can also negotiate against DSPs and on behalf of rightsholders non-precedential interim royalty rates for new service offerings under the blanket license.
The MLC’s Success
By any metric, the MLC has been successful in meeting the MMA’s broad directive. After only five years, it is administering over 50 interactive streaming licenses and distributing billions in royalties to thousands of rightsholders. It has heeded the calls of the MMA and the U.S. Copyright Office to focus on outreach to all copyright owners, from the smallest self-published songwriters to the largest music publishers, and domestic and foreign organizations that exploit musical works in the U.S. It maintains a fully public database. And yes, it just announced the start of DMP audits and has used its legal enforcement authority where necessary to ensure compliance, such as the recent Pandora litigation.
It has succeeded in doing all of this with the lowest operating budget of any license administration collective. The MLC is still developing its capabilities, and the next five years will see it continue to grow and improve, but it is currently the most efficient, transparent, and cost-effective licensing collective in the world.
The DSPs’ Vision
Back in 2019, as industry participants sat down to develop the new MLC, it was clear that while the DSPs wanted the benefit of a blanket license and limited liability, they did not want to fund an effective MLC that could accomplish everything statutorily required of it. One DMP executive suggested that the MLC could be just several employees at a WeWork.
Thankfully, the music publishers and songwriters that supported and created the MLC understood—and convinced the DSPs at that time—that to develop a collective that fulfilled the mandate of the MMA and addressed the significant issues of the past, the MLC needed reasonable funding equal to its broad statutory responsibilities.
In their latest calls for a “course correction” and MLC “neutrality,” however, the DSPs and DiMA are once again trying to undermine the MLC and the central compromise to which they agreed.
Make no mistake, when big tech says “course correct” they mean a change to the carefully negotiated law to fund only MLC activities that benefit digital companies.
When they speak of “neutrality,” what they want is to “neuter” the ability of the MLC to accomplish the clear responsibilities set out for it in the MMA. Those responsibilities include being an effective administrator of the compulsory license, being a diligent enforcer of DSP reporting and royalty obligations, and being a strong defender of the rights that the MLC is charged with licensing on behalf of music publishers and songwriters. It should come as no surprise that MLC neutrality vis-à-vis DSPs, either explicitly or in spirit, is not found anywhere in the MMA.
In Short
DSPs do not want what is in the best interests of music publishers or songwriters. Instead, this new DSP/DiMA strategy is an effort by the world’s largest digital companies to leverage their power to pay less, make it easier for non-compliance, and make it more difficult for the MLC to execute its statutory responsibilities as envisioned by Congress.
Their strategy will disempower rightsholders by disempowering the only entity created and authorized to act on their behalf with respect to mechanical licenses – the MLC.
As we look to the next five years, know that the NMPA will continue to be laser focused on fulfilling the clear goals of the MMA and ensuring the MLC is empowered to effectively work for us all.
As the showdown continues between Universal Music Group (UMG) and TikTok after the world’s biggest record company pulled content by its artists and songwriters from the video-hosting social media site, it seems as though the ban has created a window of opportunity for independent music acts.
A look at the upper echelon of Billboard‘s TikTok Top 50 chart shows that most of the top 20 entries on the chart are independent recordings, including Dasha’s breakthrough “Austin,” Mitski’s “My Love Mine All Mine,” Djo (a.k.a. actor/musician Joe Keery)’s “End of Beginning,” and even Bobby Caldwell’s 1979 song “What You Won’t Do For Love.” Prior to UMG’s TikTok ban, independent artists, music from independent artists already made up a significant portion of the TikTok 50 chart, which debuted in September 2023, but without UMG artists’ or songwriters’ works on the platform — which by Billboard‘s recent estimates affects more than 60% of the most popular songs in the United States — the pathway to success seems more clear than ever.
However, top independent music executives have a message for artists in the sector: “Not so fast.”
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As UMG’s ban drags on, independent music executives are advising artists to look at the bigger picture — and also to use this as an opportunity to look at what rights they do and don’t control.
“I truly hope we don’t do what we so often do in the music industry, which is say, ‘Oh, this is an opportunity for me to get a bit of an advantage,’ and then take the advantage, but ultimately damage the ecosystem,” says Richard James Burgess, president/CEO of the American Association of Independent Music (A2IM). “I think we are sort of at a critically bad state, in terms of the amount of money that’s being paid through [to artists]. That works out fine if you’re an aggregator, distributor or label, and you’ve got enough copyrights. But it’s extremely difficult for the artist to generate enough copyrights to make a living from if someone’s not a household name.”
Burgess continues, “TikTok is an extremely bad actor in terms of the types of deals they do and the structure of their deals. It’s almost like trying to play the lottery — if you get a viral TikTok, it can have an impact on your sales, but how much money does TikTok make from us trying to get that sort of viral spike? They should be paying for the use of music and they’re effectively not paying. I think Universal did a great thing here, and my membership, my board, supports that position.” (A rep for TikTok has declined to comment for this story).
In a 2022 Billboard story, one executive from an independent label noted that artists on his roster earned approximately $150 from TikTok from around 100,000 videos that were made with their music. Meanwhile, in the same report, a marketer who spearheaded a campaign for a music single that was used in approximately half a million TikTok videos noted that his artist earned less than $5,000 from TikTok, though views rose into the billions.
While there are opportunities for increasing numbers of independent artists to gain greater traction on TikTok during the platform’s impasse with UMG, “it’s important for artists to use the opportunity to focus on their own art instead of chasing trending sounds or being the one-millionth person to cover a hit song,” says Jody Whelan of independent record label Oh Boy Records, which was founded in 1981 by the late singer-songwriter John Prine and which now represents music from Prine, Kelsey Waldon and Arlo McKinley, among others. “If you’re lucky enough to go viral on TikTok, you want folks to stick around to hear what you have to say.”
For many contemporary acts, TikTok is a key component of their marketing plans, with labels and managers urging artists to create content in hopes of driving listeners to streaming platforms. A 2023 report, commissioned by TikTok and facilitated by Luminate, noted that 62% of U.S. TikTok users pay for a music streaming service, compared to 43% of all consumers.“TikTok user engagement metrics are strongly associated with streaming volumes,” in the United States, the report stated. “In other words, higher TikTok engagement — whether that’s likes, views or shares — corresponds with elevated streaming volumes.” The report also noted that TikTok users are more engaged with other areas of music-related consumption, claiming that in the United States, 45% of TikTok users purchased music-related merch over a year-long span, compared with 35% of overall music listeners, while 38% of TikTok users attended a live music event during the year, compared to 33% of overall music listeners.
Even with stats like these, Whelan says the TikTok/UMG battle should serve as a cautionary tale to realize how even so-called independent artists can get caught in the ban’s web because of an affiliation with UMG or UMPG. “This should also serve as a reminder to the independent community: You can’t rely on someone else’s platform to reach your audience,” Whelan says. “This month it’s UMG, next month it could be your distributor. The algorithms and priorities of social media companies and the streamers continuously shift. You have to be able to control the means in which you communicate directly with your audience, whether that’s by email or by text (we also still send out postcards to our fans!).”
Stem CEO Milana Lewis agrees, seeing the situation as a “great moment to highlight the difference between independence and autonomy. Artists believe they’re independent when they do a deal with the independent distribution arm of a major label because their deal terms might be more flexible. In reality, they still have very little control over their rights, and this is a great example of how a big corporation is deciding on their behalf whether or not their music is available on a platform and whether or not they are willing to trade off earnings for exposure.”
Independent artists should be taking this time to examine their relationships with all social media and make sure they are taking full advantage of each platform despite TikTok’s current dominance, says Seth Faber, Stem’s general manager of music distribution and payments. “Time will tell if Universal’s maneuver will lead to a meaningful redistribution of the viral pie. In the meantime, artists should continue to lean into the full landscape of snackable content,” Faber says. “The power of Instagram’s Reels, Spotify’s Clips and YouTube’s Shorts aren’t to be ignored. Diversify those content portfolios.”
For Burgess, UMG vs. TikTok is a repeat of an age-old battle pitting the industry against artists, with artists often coming out on the short end of the stick. “[TikTok] plays this promotional exposure-discovery game. How many times do we get sucked into that?” Burgess asks. “Radio hasn’t paid [artists] for recorded music. MTV didn’t pay. We keep making the same mistakes. Good thing is that Universal is big enough, and especially with the publishing and everything, the tendrils from that go far and wide.”
Burgess further likens the UMG-TikTok battle with the ongoing battle with secondary ticket markets, saying that most of the money is not making its way to artists. “That is the essence of the problem,” he says. “It would be good if people did the right thing here and stood together to get a better deal for everybody.”
R. Kelly’s attorney on Monday (Mar. 18) urged a federal appeals court to overturn the singer’s sexual abuse convictions, warning that the case against Kelly stretched federal racketeering laws “to the point of absurdity” and could potentially turn college fraternities into illegal conspiracies.
At a hearing before the Court of Appeals for the Second Circuit, lawyer Jennifer Bonjean told a panel of judges that Kelly’s employees had just been “unwitting” staffers performing “anodyne” tasks for a famous person, not a group with a criminal “purpose” like the Mafia or a drug cartel.
Seeking to reverse Kelly’s conviction under the federal RICO law (Racketeer Influenced and Corrupt Organizations Act), Bonjean accused prosecutors of using that law in a “preposterous” new way.
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“The government has extended the RICO statute to a set of circumstances that is so beyond what the framers intended, which was to get at organized crime,” Bonjean said. “Now, we’re talking about an organization with an alleged criminal, but not organized crime.”
After decades of accusations of sexual misconduct, Kelly was convicted in September 2021 on nine RICO counts related to accusations that the singer had orchestrated a long-running scheme to recruit and abuse women and underage girls. In 2022, he was sentenced to 30 years in prison.
At Monday’s hearing, Bonjean repeatedly told the judges that the government had failed to prove that members of Kelly’s organization knew crimes were being committed, meaning the RICO law didn’t apply. She said, for instance, that staffers didn’t know any of the women were underage.
But Assistant U.S. Attorney Kayla Crews Bensing, arguing back for the government, sharply rejected that claim: “The defendant had a system in place that lured young people into his orbit and then took over their lives,” she told the judges.
Bensing pointed to specific evidence that members of Kelly’s organization had been aware of the organization’s ill intent. She cited testimony that one victim had been approached by a member of Kelly’s entourage at a McDonalds, that she told him that she was only 16 years old and that he had then given her Kelly’s number and told her to call him. Another Kelly employee testified that he had answered phones for “Kelly’s girlfriends,” Bensing said, some of whom he identified as “mid-aged teenagers.”
“This is all evidence that the jury was entitled to infer that Kelly’s inner circle knew what was going on: that he was recruiting and maintaining underage women for sexual activity,” Bensing said.
Kelly faces long odds in his battle to topple his conviction, as federal appeals courts only overturn a small percentage of the convictions that are appealed each year. But Bonjean has had success in such cases in the past, most notably winning a 2021 ruling that overturned Bill Cosby’s 2018 sex assault conviction.
Following Monday’s arguments, the court will issue a ruling in the coming months.
Like in many appeals, large parts of Monday’s hearing were spent wrangling over in-the-weeds legal issues, like whether a single sexual act could fit the definition of “forced labor” under federal law, or whether Bonjean even had a procedurally proper way to fight her appeal since Kelly’s previous attorneys had failed to challenge the instructions given to the jury at trial.
On her main point about whether RICO requires an illicit “purpose,” Bonjean repeatedly faced pushback from the judges. The judges pointed out on multiple occasions that there is no written requirement that the law only be used against outright criminal organizations, and one judge specifically noted that labor unions had been repeatedly charged with violating RICO.
“RICO is looking at organizations, that are then used to commit criminal acts,” Judge Denny Chin said. “It doesn’t have to be a criminal organization. It could be a completely legitimate organization. But if it engages in racketeering activity, it violates RICO.”
But Bonjean remained adamant, arguing that the statute could not be brought to bear against an organization like Kelly’s, which she said merely had the purpose of promoting his musical career and personal brand.
“This was not a collection of people who had a purpose to recruit girls for sexual abuse,” Bonjean said. “Whether they turned a blind eye, whether some of them suspected that some of these girls were underage, that’s a whole different matter.”
“Once we get into that sort of territory, where we’re going say that that constitutes a RICO enterprise, we have a lot of organizations, we have a lot of frat houses, we have all types of organizations that are now going to become RICO enterprises,” Bonjean added.
Pushing the point further, Bonjean said that such an approach would have allowed federal prosecutors to charge infamous Ponzi scheme perpetraor Bernie Madoff with RICO violations rather than the slew of fraud charges he actually faced. At that point, Judge Richard J. Sullivan cut in.
“Well, he got 150 years,” Sullivan said. “I don’t think that it mattered.”
Live Nation shares gained 4.0% to hit $103.77 this week, marking the stock’s best closing price since May 2, 2022, and the first time the concert promotion giant had five straight closes above $100 since late April and early May that same year.
Other music stocks didn’t fare as well. Most of the 20 companies in the Billboard Global Music Index dropped this week, with 13 stocks losing ground and just seven finishing the week in positive territory. The index fell 0.1% to 1,697.90, marking the first time it’s decreased in successive weeks since it fell during three consecutive weeks in October 2023. Multi-week declines are rare for the index: Since the beginning of 2023, it has had just two two-week declines, two three-week declines and one four-week decline (in July and August 2023). This week’s slight drop brought the index’s year-to-date gain to 10.8%.
In a relatively quiet week free of earnings releases or market-moving news, there was roughly an even mix of gains and losses from the most valuable companies. Universal Music Group increased 2.1% to 27.32 euros ($29.77) while Spotify dropped 1.7% to $254.89 and Warner Music Group (WMG) fell 2.9% to $32.94. Elsewhere, German promoter CTS Eventim rose 2.1% to 76.70 euros ($83.56) and reached a new 52-week high of 77.80 euros ($84.76).
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K-pop companies rebounded after a string of weekly declines. HYBE improved 2.3% to 199,000 won ($149.59) and SM Entertainment climbed 2.5% to 74,900 won ($56.30). YG Entertainment jumped 6.3% to 43,050 won ($32.36) but is still down 19.6% year to date.
French indie music company Believe finished at 15.52 euros ($16.91), still well above the 15.00 euros ($16.34) tender offer by a consortium that seeks to take the company private. WMG has expressed interest in Believe at 17.00 euros ($18.52) per share.
The companies with the largest gains and losses are among the least valuable on the index. The week’s greatest gainer was Abu Dhabi-based music streamer Anghami, which rose 15.6% to $1.11 and has a market capitalization of just $30.7 million — less than 0.1% of Spotify’s. Radio broadcast giant iHeartMedia and French music streamer Deezer had the index’s biggest losses of 10.0% and 10.3%, but iHeartMedia’s market cap is only $255 million while Deezer’s is about 245 million euros ($267 million).
The index’s four live music stocks had an average gain of 0.9% this week, topping the 0.4% gain of the seven record label and publishing stocks. Five streaming stocks averaged a less than 0.1% decline. Three radio companies — iHeartMedia, Cumulus Media and SiriusXM — had an average decline of 5.1%.
Key U.S. indexes also saw small declines this week. The Nasdaq composite fell 0.7% to 15,973.17. The S&P 500 fell 0.1% to 5,117.09. In the United Kingdom, the FTSE 100 gained 0.9% to 7,727.42. South Korea’s KOSPI composite index declined 0.5% to 2,666.84. China’s Shanghai Composite Index grew 0.3% to 3,054.64.
In their much-cited 2023 paper “Glocalisation of Music Streaming within and across Europe,” Will Page and Chris Dalla Riva note that the rise of global streaming platforms correlates with the strengthening of local music.
This seemingly contradictory state is what the authors refer to as “glocalisation” — or “glocalization” in the American spelling. And in Latin music, that phenomenon has led to a spike in local genres like corridos, banda, funk and Argentine rap in recent years.
According to Pedro Kurtz — Deezer’s head of music for LATAM, speaking on a SXSW panel titled “Latin Music Momentum In The Age of ‘Glocalization’” on Tuesday (Mar. 12) — it’s about relatability.
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“We listen to music that we relate to, that represents us culturally. You look at artists and they’re speaking my language, and everything moves from there.”
Kurtz appeared on the panel alongside Cris Garcia Falcão, MD of label and artist strategy/GM of Latin at Virgin Music, and Sandra Jimenez, head of music in Latin America at YouTube — and the conversation (which I moderated) often turned lively between the three Brazilian executives.
Their points of view not only highlighted the glocalization phenomenon and how democratization and streaming dramatically changed Latin music, but also the similarities and differences between the Brazilian and Latin American markets, which many tend to lump together — even though they’re vastly different.
Although Brazil is an enormous and powerful market, the music is in Portuguese, and there is still a language barrier that must be broken down in order to break through internationally; even Brazilian megastar Anitta had to sing in Spanish to get noticed.
But, notes Jimenez, “There is no language barrier for Spanish. It’s almost like one big country. It’s a region with more than 300 million people. It’s a huge region.”
Its sheer size has given the region clout.
On YouTube, Latin America is “one of the top three regions in the world in terms of music consumption,” said Jimenez. For Deezer, added Kurtz, “It’s the second most important region in terms of streaming and engagement.”
And the vast majority of the content consumed on streaming platforms in Latin America is local.
For example, Falcão said that before the pandemic, “It was more about Anglo content. Now, it’s more democratic. Everyone should understand our region and our culture and adapt.”
Those who do, win. In Brazil, more than 80% of music consumption is local. In Mexico, says Kurtz, “72% of our streaming comes from local artists. It’s a big number, and local branches are getting more autonomy. Back in the day, we had other forces pushing music.”
Beyond the numbers, there are other intangibles. The Latin diaspora globally has led to music in Spanish, in particular, being consumed all around the world — and that phenomenon was accentuated during the pandemic. “It made us more internal,” said Jimenez. “It wasn’t possible to meet with friends and family, so we created community.”
As Latin music consumption has increased, so has music creation and investment in the region. Kurtz says that starting in 2020, Deezer has seen its number of weekly pitches in the region almost double — reflecting an increased interest in making music.
“It’s about people valuing their own cultures, and the charts are basically a mirror of that,” he said.
The global record business will soon pop the champagne to celebrate another year of streaming-led revenue growth, judging from the handful of individual country revenue figures for 2023 made public so far this year. The IFPI won’t release its 2023 report until Thursday (Mar. 21), but major markets such as the United Kingdom, France, Germany, Spain and Japan have already released data that shows 2023 produced another bumper harvest for record labels.
But while streaming continues to push markets in positive directions, growth has slowed, and revenue in some markets remains well below the levels of the CD era. Worse yet, some countries may have insufficient streaming growth to get back to earlier peaks.
SNEP, the recorded music trade group in France, issued a stark warning this week when it announced that the country’s 2023 revenue rose a respectable 5.1% to 968 million euros ($1.05 billion at the average exchange rate in 2023). But even though digital revenue rose 8.8% to 620 million euros ($671 million) and streaming revenue climbed 9.2%, a 10% increase in subscription streaming revenue “remains too weak to fully fuel the development of the market even though it is the primary source of value creation,” SNEP wrote in its 2023 report.
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France might reasonably be expected to be faring better in 2024. The country was the sixth-largest recorded music market in 2022, according to the IFPI, and is the home of Deezer, an early entrant to the music subscription market. But in 2023, France had only a 16% penetration rate for paid subscribers, according to SNEP, “one of the lowest among the main music territories. The growth in revenue from these subscriptions is slowing down here while our market is far from having reached maturity.” This isn’t a brand-new concern: SNEP sounded the same alarm a year ago.
So, while streaming is creating new opportunities globally for labels, publishers and creators, it hasn’t grown enough to help France recapture revenue lost during the fall of the CD in the 2000s. France’s revenue of 968 million euros in 2023 was 25% below the 1.3 billion euros of revenue it enjoyed in 2002. In contrast, the U.S. market’s $15.9 billion in recorded music revenue was well above the peak of the CD era, $14.5 billion, set in 1999, according to the RIAA.
Elsewhere, some major recorded music markets have announced decent gains in 2023 without voicing the kind of dire warning seen in France.
The German recorded music industry grew 6.3% in 2023, the BVMI announced Mar. 6. Digital revenue grew 8.4% and accounted for 81.5% of total revenue. Audio streaming rose 8.4% and accounted for 74.8% of the total market and 92% of digital revenue. Physical sales accounted for 18.5% of total revenue and rose 0.1% from 2022. CD sales dropped 5.9% but accounted for 11.3% of total revenue and about 61% of physical revenue. Vinyl sales grew 12.6%.
Spain’s recorded music market grew 12.3% to 520 million euros in 2023, Promusicae announced Tuesday (Mar. 12). Streaming grew 17.3% to 398.6 million euros ($432 million) and accounted for 77% of total revenue, which was a remarkable 150% higher than the low point of 159.7 million euros ($212 million) in 2013. But, like France, Spain has yet to match its peak revenue from the CD era. Last year’s revenue was on par with the 475 million euros ($534 million) seen in 2005, itself a sharp decline from revenue that surpassed 700 million euros ($630 million) in 2001.
Aside from SNEP in France, only the BPI in the United Kingdom sounded an alarm of any sort. The market’s recorded revenue rose 8.1% in 2023 to a record 1.43 billion pounds ($1.78 billion), the organization announced Thursday (Mar. 14), with streaming revenue increasing 8.4% to 962 million pounds ($1.2 billion) and accounting for 67.4% of total revenue, up from 67.3% in 2022 and well above the 8.6% seen a decade earlier. But BPI CEO Dr. Jo Twist cautioned not to take the growth for granted and emphasized the need for “significant label investment” to keep the market prosperous.
There’s a reason the kind of gains music markets are seeing currently might not feel like unqualified success stories: inflation. Adjusted for inflation, revenue in France last year was actually 48% below 2002; and in 2022, the United States was 38% below its 1999 peak.
These major markets’ failure to return to CD-era highs helps explain the music business’s unprecedented land rush as companies invest in developing markets in search of export-ready artists and untapped streaming potential. Both majors and independents are investing in Africa, the Middle East/North Africa, Asia and South America — regions with large populations, under-monetized streaming markets and exportable music that could generate royalties in Western countries.
Those developing markets, and some major ones like the United States and United Kingdom, helped global recorded music trade revenue reach a new high of $24 billion in 2021, surpassing the $23.2 billion from 1999 (unadjusted for inflation). While both the United States and United Kingdom surpassed their CD era peaks in 2021 (without adjusting for inflation), some other major markets are still trying to recapture their glory days. Growth-minded companies in those markets may have to look beyond their borders to get there.