SESAC has signed a new deal with U.S. radio broadcasters. The performing rights organization claims that its new deal, the result of arbitration, are at rates 50% per higher than published reports of those paid to members of competitor ASCAP.
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Performing rights organization SESAC has announced that its arbitration proceeding before the U.S. Radio Music License Committee (RMLC) and three independent arbitrators has concluded, determining the rate SESAC can charge terrestrial radio stations from Jan. 1, 2016 through Dec. 31, 2018.
“the rates reflected in its arbitration award are approximately 50% higher than ASCAPs.”
In a statement announcing the new deal, SESAC claims that the arbitrators set the rate that radio must pay its songwriters substantially above that rates negotiated by rate courts. “Based on reports that have appeared in the trade press regarding ASCAP’s recent settlement with the RMLC, as well as published estimates of ASCAP’s market share, SESAC believes that the rates reflected in its arbitration award are approximately 50% higher than ASCAPs.”
SESAC agreed to use commercial arbitration to resolve license fee disputes with the RMLC, whereas ASCAP is subject to a Consent Decree with the US Department of Justice. SESAC says that it believes that these Consent Decrees impose restrictions that prevent rightsholders from realizing fair market value.
SESAC sees the arbitration panel’s award is a benchmark that could also be used by PROs BMI and Global Music Rights in their disputes with the RMLC. Other beneficiaries include writers and publishers affiliated with PRS for Music, SOCAN, APRA, and other foreign performing rights organizations whose works represent a meaningful share of radio play in the United States.
As a for profit company, the costs SESAC incurred in connection with the arbitration proceeding, as well as the one-time adjustment in its radio license fees from the date of the award retroactive to January 1st 2016, will be funded by SESAC’s shareholders, and not by its affiliated songwriters and publishers.
“the panel’s decision is a resounding affirmation of the fact that ASCAP rates in radio do not reflect fair market value.”
“While we believe that the value of our music substantially exceeds the amount of the award and the nature of the arbitration process made it inevitable that we would see a reduction in our fees for terrestrial radio, the panel’s decision is a resounding affirmation of the fact that ASCAP rates in radio do not reflect fair market value. We are pleased to create a benchmark that we hope will benefit all songwriters and publishers,” said John Josephson, chairman and CEO of SESAC Holdings, Inc. “Songwriters are amongst the most heavily regulated small businesspeople in the United States, and this agreement marks an important step in SESAC’s ongoing effort to assure that they receive fair compensation for their works.”