RMLC Alleges Stations SESAC's Rate Reduction Offer Aimed At Avoiding Settlement Terms

Warning Shot

The RADIO MUSIC LICENSING COMMITTEE (RMLC), which reached a settlement with SESAC in JULY (NET NEWS 7/24) that was supposed to freeze the performing rights organization's rates at 2015 levels until negotiations or binding arbitration revised the rates for 2016-18, is now complaining that SESAC is pressuring stations not to join the settlement in a letter and in telephone calls that offer small fee reductions for renewals.

SAGA's ED CHRISTIAN, the RMLC's Chairman, wrote in a letter to broadcasters that "SESAC has suggested without basis that it is likely to achieve significantly higher fees from arbitration than it is now collecting industry‐wide. SESAC’s letter further tries to steer stations away from the settlement by stating that by entering into individual arrangements with SESAC, stations will avoid paying an RMLC administrative fee designed to support the arbitration effort."

Asking why SESAC would expend the effort to dissuade stations and groups from opting into the settlement, CHRISTIAN alleged, "It seems evident that the divide‐and‐conquer strategy on which SESAC has now embarked has two primary goals. The first is to undercut the RMLC’s ability to vigorously represent our industry in the forthcoming arbitration. Only by dissuading stations from entering into the settlement, and only by advising stations that they will allegedly be economically disadvantaged by financially assisting the committee in funding that arbitration, can SESAC hope to succeed in doing so. The second is SESAC’s recognition that the likely outcome of the arbitration will be a much more significant rollback in fees than the reductions it is now offering. While more work and information gathering needs to be done, the Committee’s preliminary estimate is that SESAC has been overcharging the industry by more than 100% ‐‐ meaning that reasonable fees beginning 2016 should be set at half or less than current levels.... We regard the recent communications from SESAC as reflecting nothing short of an effort on SESAC’s part to repudiate the terms of a carefully negotiated settlement, and to avoid the consequences of having SESAC’s monopoly pricing subjected for the first time to careful scrutiny by an arbitration panel."

CHRISTIAN's letter reminds stations that they need to opt in for the settlement with the submission of a form no later than NOVEMBER 20th. Read CHRISTIAN's letter here.

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