April 22, 2020
I am pleased to inform you that the RMLC and BMI have reached agreement on the terms of a new license agreement that covers the period January 1, 2017, through December 31, 2021. The RMLC Board of Directors voted overwhelmingly to support this new license, which was negotiated by our Executive Committee and outside counsel at Latham & Watkins.
This license preserves the scope of rights contained in the BMI-10 license for over-the-air broadcasts, stations’ simulcast streaming and website activity, and HD multicasting. Here are some of the highlights of the new agreement:
- Going forward, for terrestrial broadcast/simulcast transmissions, a 1.78% of revenue fee structure will apply, less a standard deduction of 12%. Digital revenues are subject to an increased deduction of up to 30%, compared to 25% under the old license.
- Retention of the per program (or program period) license applicable to many talk-formatted stations, with a base fee of 0.31% of revenues, less the same standard deductions detailed above.
- Continued rights coverage to accommodate our industry’s “new media” platforms related to Internet websites, smart phones, and other wireless devices.
- The settlement entails a one-time $5 million litigation fee to be paid by the industry to BMI by December 31, 2020. The industry-wide allocation of this fee will be tied to station amounts that were payable to BMI for calendar year 2019, on a straight pro-rata basis. You can expect to receive a statement from the RMLC for this assessment in short order.
BMI will immediately offer the new license to the industry in electronic format only. Operators should plan on submitting the 2019 annual revenue report to BMI, and any corrections to the 2017 and 2018 annual revenue reports, by July 1, 2020. Upon receipt, BMI will issue a true-up invoice related to 2017-2019 license fees. Note that failure to timely submit the 2019 annual report may result in BMI imposing harsh fines.
While the RMLC certainly would have preferred to report a rate decrease, our constituents need to bear three things in mind: (i) during the course of negotiations, BMI was able to substantiate that its affiliates’ radio spin share had increased relative to ASCAP’s; (ii) the 1.78% headline rate is in line with what the industry has paid to ASCAP and BMI for decades; and (iii) the percentage-of-revenue license structure means that fees will adjust along with station revenues during these uncertain economic times.
Should you have any questions concerning this matter, please feel free to contact the RMLC c/o Bill Velez, Executive Director. Phone: (615) 844-6260 or e-mail email@example.com.
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