New deal sets ASCAP rates through 2016

The Radio Music License Committee (RMLC) and the American Society of Composers, Authors and Publishers (ASCAP) have announced a deal regarding the rates and terms to be paid by radio stations for the right to perform musical works through 2016. You may recall one of our earlier discussions of this topic; if you do, you’re already aware that setting these rates and terms is a rather extensive process, since ASCAP (and BMI) must have its agreements approved by a United States District Court for the Southern District of New York, a condition of a consent decree which settled a lawsuit back in the 1940s.   

This particular go-round seemed pretty intense, even by RMLC-ASCAP standards. After the prior agreement expired at the end of 2009, a "bridge fee" was set as both sides began dual sets of negotiations — first working on an interim rate that would be in place until this permanent deal was reached. 

We’ve heard rumors for a few weeks that the final deal was reached but, of course, nothing is final until the Southern District says it is final. The Southern District has spoken and we think broadcasters will like what they hear. 

According to a press release issued by RMLC, the broadcast industry will pay rates closer to those paid in 2009 than what they’d expect in 2012. In fact, broadcasters are getting a rebate! Part of the deal involves a $75 million credit against amounts paid in 2010 and 2011, which will be instituted in increments of $ 15 million per year (and is on top of $ 40 million in industry-wide rebates implemented when the interim rate was approved in 2010). So check your statements, there should be an immediate fee decrease of about 30% per station starting this month!

Other aspects of this deal that broadcasters will find attractive:

Those using the “blanket license”" (most stations and probably all music stations) will be especially happy to know that the calculation and reporting process will be simplified: you’ll now pay a straight 1.7% of gross revenue. The icing on the cake is the ability to deduct 12% for revenue from multicasting sources and a 25% for revenue from new media.

Those using the “per program” option (mainly news and talk stations) will also pay a straight percentage of gross revenue, in this case its 0.2958% with the same deductions as above.

Finally, agreement will allow for greater innovation in terms of expanding into new media

Radio broadcasters should look for new license forms to be available within a month and should also hope that this will spur a similar resolution in the RMLC’s negotiations with BMI.  They should also thank Bill Velez and the folks over at RMLC for some great representation on their behalf.