The arbitration process governing SESAC performance licensing rates determined that for the 2023-2026 license period, an overhead fee of 0.2824% of revenue – an increase of 10.4% over the rate of 0.2557% of the revenues of the previous period – will be fixed, according to a press release from the Radio Music Licensing Committee (RLMC).

The rate represents the amount that SESAC, a performing rights organization (PRO), can charge stations in exchange for broadcasting works from their repertoire on terrestrial radio.

Each side characterized the final tariff determination differently, with RLMC claiming victory because the arbitration panel rejected SESAC’s efforts to more than double the tariff and significantly expand the licensing revenue base. But SESAC says the arbitration award reflects a failure by RLMC in its attempt to lower the rate.

The tariff decision is retroactive to January 1, 2023, meaning stations paying SESAC interim license fees at 2022 rates will receive “a modest upgrade adjustment.” The arbitration process governing SESAC rates is the result of a settlement of an antitrust dispute between RMLC and SESAC in 2015, which provided for a rate arbitration process for the next 20 years.

RMLC’s announcement claims that SESAC sought to justify its efforts to raise rates and expand the licensing revenue base by relying on rates set for other music licensors.

At the same time, SESAC’s statement on the determination indicates that RMLC failed in its attempt to tie SESAC’s rates to those of BMI and ASCAP, the two US PROs, which operate under executive orders consent agreements that impose a rate trial in the Southern District of New York if negotiations fail. .

“Even if no increase was justified, the arbitration decision reported here constitutes a significant victory for the radio stations represented by RMLC given the requests of SESAC, and comes during a difficult economic period for the industry,” said the RMLC President Ed Atsinger in a statement. “The RMLC intends to continue to defend and protect the interests of its members at a time when all enforcement rights organizations are seeking to aggressively increase their dues. »

In another aspect of rate determination, the RLMC stated that “the long license conditions are still being developed, but it is anticipated that non-music format stations will continue to pay the same discount of 77.5 %” on the music stations above. ‘ overall rate. Mathematically speaking, this means that the RMLC expects the non-music rate to be set at 0.06354% of revenue, an increase of 10.5% from the previous rate of 0.0575%. Billboard estimates.

“The arbitration award reflects a further failure by RMLC to impose regulated rates on SESAC since SESAC and RMLC reached their settlement in 2015,” said SESAC Performing Rights President and CEO, Scott Jungmichel, in a press release. “The panel awarded SESAC an increase of more than 10% while rejecting RMLC’s attempts to lower the rate, go back and tie SESAC to the regulated rates paid by ASCAP and BMI. Additionally, the revenue base subject to the fee is significantly higher than the revenues the station groups sought to pay from under the 2017 allocation.”