Broadcast Groups Sue Music Rights Licenser SESAC

Class-action suit charges anticompetitive practice
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NEW YORK:Three broadcast groups have sued music rights organization SESAC, according to the Television Music License Committee, a nonprofit that negotiates music rights for TV stations. Meredith, E.W. Scripps and Hoak Media were among broadcasters that filed a class-action antitrust complaint this week in the U.S. District Court of New York. The crux of the claim is broadcasters are being overcharged for music as a result of anticompetitive practices by SESAC.

“SESAC’s strategy has been to sign up composers of music in popular television programs, guarantee them significantly higher incomes than they had received elsewhere, and then raise its prices without regard for the amount of music a station uses, employing threats of copyright infringement lawsuits as a bargaining tactic,” the nonprofit said in its release about the lawsuit.

The broadcasters are asking the court to order SESAC to “stop price fixing and other anticompetitive acts,” and they’re seeking triple damages under antitrust law. The suit was filed on behalf of broadcasters by Weil, Gotshal & Mangles, LLP.

SESAC is a for-profit entity based in Nashville and New York and one of three U.S. organizations representing composers and music publishers in the United States. It charges an annual fee for collective licenses that allow its members compositions to be played over the air, on the Internet, in stores, stadiums and other public venue. The fees in turn pay the royalties to SESAC member performers, who hold the copyrights to their works.

“The complaint alleges that essentially all television stations are compelled to pay SESAC the price it demands for a license because they cannot control what music is used in most of the programs and commercials they broadcast, and they cannot remove the music,” the TV Music Licensing Committee said. “Thus, to avoid broadcasting music without a license--a violation of copyright law--they have no choice but to accept SESAC’s licensing terms.”

Some of the more popular shows that include SESAC-represented music are “House,” “Two and a Half Men,” “Dr. Phil,” “Ellen,” “Entertainment Tonight” and “Seinfeld.”

The TMLC notes that the two other music licensers--the American Society of Composers, Authors and Publishers and Broadcast Music, Inc.--“have been regulated for decades by consent decrees issued following antitrust suits brought by the U.S. Department of Justice.” The consent decrees provide that a court set use fees if the two parties can’t reach and agreement.

The charges brought against SESAC are similar to the actions that resulted in the regulation of ASCAP and BMI, the committee said.

The group also said SESAC used to negotiate with it, but last year started negotiating with individual broadcasters, “imposing substantial rate increases despite stations’ reduced use of SESAC music in some cases.”

Charles Sennet, chairman of the committee said “SESAC’s actions are an unlawful restraint of trade. The antitrust laws prevent the other two PROs from using their collective power to extract coercive rates for music from broadcasters. We believe those same antitrust principles should be applied to SESAC.”

Shawn Williams of SESAC said this morning that the group had just been served “and are currently reviewing the documents so we have no comment at this time.” -- Deborah D. McAdams

(Image by Angelo Casare)