Performance rights organization BMI says it has reached a settlement on royalties paid to artists and songwriters on US radio, in what it calls its “largest rate increase ever” for radio play.
In a statement issued on Tuesday (August 19), BMI and the Radio Music License Committee (RMLC), which represents US broadcasters, said they had reached a settlement in a long-running legal contest over royalty rates for the 2022-2029 period.
The organizations described it as “a historic rate increase for BMI that reflects the company’s superior market share in the radio industry”.
According to documents filed with the US District Court for the Southern District of New York, broadcasters will pay 2.14% of gross revenue in royalties for 2022 and 2023, rising gradually to 2.20% for 2026-2029, with some deductions depending on how the revenue was generated. That rate is up from 1.78% in the previous contract covering 2017-2021.
The deal will be applied retroactively to January 1, 2022.
An interesting quirk in this story: BMI was historically owned by a group of US radio and broadcasting companies, but that all changed in Q1 last year, when the PRO was acquired by a shareholder group led by private equity firm New Mountain Capital.
Update: ASCAP has now announced its own settlement with the RMLC, confirming that it has locked in “higher rates” vs. its previous deal.
In the US, broadcasters pay royalties to songwriters and publishers for music played on the air (artists and labels are not paid royalties for the use of their recordings on radio).
The RMLC deal with BMI closes yet another chapter in the ongoing battle between copyright owners and music broadcasters for better royalty payouts in the US.
The back-and-forth between BMI and the RMLC over the previous five-year licensing period, covering 2017-2021, wasn’t settled until 2020, with payments made retroactively.
According to a report last year at Inside Radio, the negotiations between BMI and the RMLC were influenced by the entry over the past decade of a new player in the PRO space: Irving Azoff’s Global Music Rights (GMR), which last year received a substantial investment from private equity firm Hellman & Friedman.
According to that report, BMI argued at federal rate court that it should be awarded the higher rates it believed GMR to have received from broadcasters.
Though GMR attempted to have its contract with broadcasters kept out of the dispute with BMI, the court ordered the contract to be entered into evidence.
PROs objected strongly in 2022 when the RMLC attempted to join the rate court proceeding it was litigating against BMI together with its fight against ASCAP, another major PRO.
ASCAP and BMI argued that the move was meant to pit the two PROs against each other in order to extract lower royalty rates. In 2023, the federal court rejected the RMLC’s move and kept the two proceedings separate.
“This new deal ensures BMI’s songwriters will be more fairly compensated for the performance of their music on this incredibly important platform.”
Mike O’Neill, BMI
Of the newly-announced agreement, BMI President and CEO Mike O’Neill said: “BMI sought a rate that reflected our market-leading share of the music performed on radio stations across the country, and I’m pleased to say we achieved our largest rate increase ever for the radio industry.”
He added: “This new deal ensures BMI’s songwriters will be more fairly compensated for the performance of their music on this incredibly important platform. Negotiation is always better than litigation, and we’re pleased to have worked together with the RMLC to achieve this outcome.”
RMLC Chairman Ed Atsinger said the deal means certainty for US broadcasters as to the rates they will be paying and a savings on litigation costs.
“We are pleased to have reached an amicable agreement with BMI, which is indicative of how strongly the radio industry values its partnerships with songwriters,” he said.
“Furthermore, we feel that this agreement provides the radio industry with the ability to plan for the long-term while avoiding substantial litigation costs and uncertainties associated with the rate court process.”Music Business Worldwide
