Under the regulations, the arbitration process governing SESAC performance license rates has decided that for the 2023 to 2026 license period, a total fee of 0.2824% of revenue will be set, or an increase of 10.4% from the previous period’s rate of 0.2557% of revenue. %.
This rate represents the fee that the Performing Rights Organization (PRO) SESAC can charge stations in exchange for broadcasting works from their repertoire on terrestrial broadcasts.
Both sides described the final rate decision differently, with the RLMC claiming victory because the arbitration panel rejected SESAC’s efforts to more than double the rates and also significantly expand the licensing revenue base. But SESAC said the arbitration award reflected the failure of RLMC’s attempts to lower rates.
The rate decision is retroactive to January 1, 2023, meaning stations that paid interim license fees to SESAC at the 2022 rates will receive “modest adjustments.” The arbitration proceedings governing SESAC’s rates are the result of a 2015 antitrust litigation settlement agreement between RMLC and SESAC, which sets out rate arbitration proceedings for the next 20 years.
The RMLC statement said SESAC sought to justify its efforts to increase rates and broaden its licensing revenue base by relying on rates set for other music licensors.
Meanwhile, SESAC’s statement on the decision said the RMLC failed to link SESAC’s rates to those of two U.S. PROs, BMI and ASCAP, which operate under consent decrees and are required to do so when negotiations fail. Southern District of New York conducts rate testing.
RMLC Chairman Ed Atsinger said in a statement: “Despite the fact that no fee increase was necessary, given SESAC’s requirements, the arbitration decision reported here is a significant victory for the radio stations the RMLC represents and comes at a time when the industry is facing an economic crisis. Made during challenging times “At a time when all well-performing organizations are seeking significant fee increases, the RMLC intends to continue to defend and protect the interests of its members. ”
On another aspect of the rate determination, the RLMC said, “Long-term license terms are still being developed, but it is expected that non-music format stations will continue to pay the same 77.5% discount to music stations as described above on their title rates.” Mathematically, this means RMLC expects the non-music rate to be set at 0.06354% of revenue, a 10.5% increase from the previous rate of 0.0575%, advertising billboard estimate.
“The arbitration award reflects RMLC’s failure to impose regulatory rates on SESAC since SESAC and RMLC reached a settlement in 2015,” Scott Jungmichel, president and CEO of SESAC Performance Rights, said in a statement. “The panel awarded SESAC more than 10% increase, while rejecting RMLC’s attempts to reduce rates, reverse time and bring SESAC into compliance with the regulatory rates paid by ASCAP and BMI. Furthermore, the revenue base of the fee is much higher than what the station group was seeking to pay under the 2017 award.
