Songwriter Organizations Urge Congressional Action on the Mechanical Licensing Collective’s ‘Black Box’ Royalties — ‘Very Blatant Conflict of Interest’

  • Save

Organizations including Music Creators North America (MCNA), the Songwriters Guild of America (SGA), and the Society of Composers and Lyricists (SCL) are entreating U.S. Representative Darrell Issa to address the Mechanical Licensing Collective’s reportedly massive tranche of unmatched/unclaimed royalties.

The mentioned organizations, besides the European Composer and Songwriter Alliance (ECSA), the Songwriters Association of Canada (SAC), and several others yet, just recently expressed their concerns with the Mechanical Licensing Collective (MLC) in a concise message to Representative Issa.

The California lawmaker serves as chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, which about one month back held a hearing, “Five Years Later – The Music Modernization Act,” in Nashville.

Among those who appeared before the subcommittee as part of this hearing were MLC CEO Kris Ahrend, and predictably, covered topics included the “black box” unmatched royalties held by the MMA-created MLC. Beforehand, the MLC had refused to disclose the precise amount of undistributed creator compensation in its possession, with reports and documents suggesting that the figure could be approaching a cool $1 billion.

Notably, reports have likewise indicated that this sizable collection of royalties will ultimately be distributed to rightsholders based upon market share – meaning that leading publishers would rake in significant sums attributable to works they don’t own.

And the latter point, the signatory parties explained at the start of and throughout their letter, remains a major concern on their end. Moreover, these same organizations had hoped that their corresponding questions for Representative Issa would have been answered in more detail at the above-noted hearing, according to the text.

Expanding upon the idea, Music Creators North America and others rather directly inquired about “what incentive exists for the MLC to identify and contact the rightful owners of” due creator compensation given that its board consists “predominantly of employees of the same entities that would benefit most from the distribution of those royalties.”

“Exactly how much money is currently being held by the MLC in the ‘Black Box’ of unmatched/unclaimed royalties that will be distributed to the music publishers who control the MLC if the rightful owners have not been identified and paid when the clock runs out?” they also asked.

Meanwhile, the MLC has thus far opted against disclosing the exact numbers behind the black box, per the above-highlighted reports as well as a lengthy summary of correspondence provided in the letter.

Consequently, the entities have “strongly” urged Chairman Issa “to look deeper into this very blatant conflict of interest” and to support their call to (via an MMA amendment or a Copyright Office regulation) “hold all unclaimed royalties until and unless an average identification rate of 75% of the previously unclaimed historical royalties has been achieved and sustained and owners paid.”

At the time of this piece’s writing, the Mechanical Licensing Collective, which says it’s “accepting suggestions of songwriter candidates for its” board, didn’t appear to have responded publicly to the letter.