American collecting society SESAC obtained a higher rate for its members when their music is played on American radio stations after negotiations with the Radio Music Licensing Committee went to arbitration. However, both sides claim victory as SESAC aimed for a larger increase.

Ed Atsinger of the RMLC, which negotiates music royalty rates for much of the U.S. radio industry, said: “Even though no increase was warranted, the arbitration decision constitutes a significant victory for the radio stations represented by the RMLC, taking into account the requirements of SESAC, and comes at a time of difficult economic times for the industry.

The RMLC, he adds, “intends to continue to defend and protect the interests of its members at a time when all performing rights organizations are seeking to aggressively increase their membership fees.”

The way radio stations pay royalties to songwriters and music publishers in the United States is slightly more complicated than in most other countries, as there are five organizations that represent the performing rights of songs: BMI, ASCAP, GMR and AllTrack, as well as SESAC.

Each society represents a different repertoire, although there is a lot of crossover because the co-authors of a song may be members of different collecting societies.

The two major performing rights organizations, BMI and ASCAP, are both regulated by what are known as consent decrees, with any disputes between the companies and licensees being brought in special rate courts where a judge ultimately decides what each licensee – or group of licensees – must pay. .

SESAC and GMR want to ensure that they are not regulated in this way, although SESAC has agreed to an arbitration process with some licensees, including RMLC. The last licensing agreement between SESAC and RMLC members expired at the end of 2022 and, with no agreement reached on a new tariff, these negotiations were referred to arbitration in April last year.

This arbitration process has now been completed, with a new rate set for the 2023-2026 license period. This is an overall royalty of 0.2824% of turnover, an increase of 10.4% compared to the previous period.

Although SESAC did not get as big an increase as it had hoped, it welcomed the outcome of the arbitration process, particularly because the arbitrator rebuffed the RMLC’s efforts to link the SESAC tariff to the regulated rate guaranteed by ASCAP and BMI via rate courts.

COO of SESAC Performing Rights, Scott Jungmichel, says the arbitration panel “awarded SESAC an increase of more than 10 percent while rejecting RMLC’s attempts to lower rates, go back and tie SESAC to the regulated rates paid by ASCAP and BMI”.

Besides the rate increase at the highest level, Jungmichel also welcomed another element of the arbitration committee’s decision, stating that “the revenue base subject to the fee is significantly higher than the revenues on which the station groups had sought to pay as part of the 2017 award.” .