BMI Files Petition Against North American Concerts Promoters Association

In addition to higher concert rates, Broadcast Music Inc. seeks access to revenue from secondary ticket sales, VIP boxes, and ticket broker charges.

Broadcast Music, Inc. (BMI) has filed a petition against the North American Concert Promoters Association (NACPA) in federal rate court. The move comes after both parties failed to reach an agreement.

According to BMI, NACPA has shortchanged BMI and its affiliates. NACPA has allegedly relied on outdated rates that don’t reflect “the evolution of the music industry.” The rates don’t take into account the expanded revenue streams that result from music performances.

In the court petition, the PRO states it had entered into its first license agreement with NACPA in 1997. The period – covering January 1^st, 1998 through December 31^st, 2004 – had a bifurcated rate structure for live concerts. Venues with fewer than 10,000 seats paid 0.3% of gross ticket revenue. Venues with 10,000 and more seats paid 0.15%.

The original 1998 license agreement allowed NACPA to receive a 10% administrative discount in licensing fees for every quarter during which NACPA represented 80% or more of its members under the agreement. Both had agreed to extend the license through December 31^st, 2005, and then again through December 31^st, 2009. The NACPA license renewed automatically for one-year terms through December 31^st, 2013.

BMI and NACPA have been in negotiations to reach a final license agreement. Yet, as the PRO writes, they’ve yet to make meaningful progress.

Mike Steinberg, Executive Vice President of BMI, explained,

“The music created by songwriters and composers and enjoyed by American music fans is the backbone of the live concert industry, yet the rate paid to BMI for the use of its affiliates’ music vastly undervalues that contribution. We have spent nearly five years attempting to finalize new rates with NACPA that more closely align with the higher rates NACPA members have already agreed to pay to other PROs, both internationally and in the U.S.”

The performing rights organization (PRO) wants the rate court to determine the final license fees for live concerts. BMI seeks a judgment that will “more fairly reflect the values” its affiliates’ music brings to the US live concert industry. This includes a rate of 1.15% of revenue, which would apply from January 1^st, 2014 through December 31^st, 2022. The PRO has also sought retroactive rates from 2014 to 2018.

NACPA has lambasted the move. Calling out BMI’s rate increase “massive, unprecedented, and unjustified,” attorney Benjamin Marks told Billboard,

“BMI’s rate proposal is patently unreasonable. NACPA members are committed to paying a reasonable and fair rate for the public performance of all copyrighted compositions and they will not be bullied by BMI’s demands or its commencement of a rate court proceeding.”