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Radio Faces Big Test In Pennsylvania That Will Affect Whole Country

Download (2)A new antitrust battle is set to take place between the Radio Music License Committee, representing 10k or so radio stations and Irving Azoff’s Global Music Rights, LLC. The case could have lasting repercussions for the future of music licensing negotiations.

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Guest post by Bobby Owsinski of Music 3.0

Having grown up in Pennsylvania and returning there frequently to visit family, I can tell you with some certainty that the state isn’t exactly on the bleeding edge of radio. In fact, I’m always struck by the fact that it seems stuck in the 1970s, because you hear songs predominantly from that era most any hour of the day. That’s why an upcoming an antitrust battle going on there between the Radio Music License Committee (RMLC), which represents some 10,000 radio stations throughout the nation, and Irving Azoff’s Global Music Rights, LLC, is so fascinating and potentially pivotal to future music licensing negotiations.

Some background is needed to understand the nature of this dispute. Most songwriters and music publishers are represented by one of the big performance rights organizations (ASCAP, BMI, SESAC) who negotiate the rates paid by radio stations for radio play and then collect and distribute those royalties to their clients (this is a simplistic description but a sufficient overview of the process). Global Music Rights (GMR) is an upstart performance rights organization with fewer than a hundred songwriters, but what a stable of hitmakers they are. Adele, Aerosmith, The Beatles, Bruno Mars, Drake, The Eagles, Jay-Z, John Lennon, Madonna, Metallica, Taylor Swift, Tom Petty & The Heartbreakers, Pharrell Williams and U2 are among those represented by GMR.

Download (2)Of course, Irving Azoff has a long history as a manager, record executive and music entrepreneur, and is known for getting the best deal for his artists, so when negotiations with the RMLC hit a standoff, it filed an antitrust suit against GMR, not in New York or Los Angeles, but in Federal Court in Philadelphia, presumably to get a less media-savvy judge that would rule favorably for station owners.

This prompted a counter-suit from GMR, who then attempted to negotiate with stations directly instead of through the RMLC. Pennsylvania-based stations were left out in the cold and unable to negotiate due to the pending lawsuits, however, and what makes this critical is the fact that the current license with GMR ends on September 30th. As a preemptive strike, RMLC brought an emergency motion on July 21st requesting an injunction that orders GMR to continue to do business with these PA stations until the lawsuits are resolved. A decision has not yet been rendered.

The issue cuts deep on both sides. Songwriters have always been paid pretty well for radio airplay (if you have a hit, that is), but basically haven’t had a raise for a long time and have seen only a comparative trickle of royalties from streaming. Artists, who get paid for streams but not for terrestrial radio airplay, would like a piece of the pie, but the broadcasters powerful lobby has managed to defeat every motion in Congress so far.

On the other hand, it’s not all champagne and roses for broadcasters either. Like with the rest of life these days, there are the 1 percenters, a declining middle class, and many small local stations on the low end just getting by.

Nowhere is this more apparent than in the area that I grew up in – Pottsville, PA. There used to be two small local radio stations – WPAM at a mere 1,000 watts, and WPPA at 5,000 watts during the day and just 500 at night. WPAM ceased operations in 2015 and had its license rescinded in June. WPPA seems to be holding on by a thread. While the 1 percenter stations in Philadelphia and Pittsburgh might be able to absorb any rate hike thrown at them (despite the claims of the National Association of Broadcasters), I wonder if even a small royalty hike might be enough to cause this tiny station to fail and rob the Pottsville area of its last local radio voice. What’s worse, how may other rural areas would be affected by similar situations as well?

Having been in the creative part of the music business all my life and currently enjoying multiple royalty streams as a result, I’m certainly sympathetic to the plight of the songwriter. But I also wonder about the WPPA’s out there in rural America where every penny counts towards keeping it on the air. There’s a survival of the fittest, “let the market conditions dictate” aspect to this that may be fair, but it’s certainly unsettling.

In an area that still prizes the sound of the 60s and 70s, not being able to play The Beatles or The Eagles or Tom Petty doesn’t do much to keep a station’s existing audience listening either. On the other hand, would legacy songwriters really want to limit the stations that are actually giving them airplay in favor of stations that have moved on?

Let’s hope this disagreement can be settled soon. As of now, there doesn’t look to be any winners, and soon there will be more than just the radio stations in Pennsylvania involved.

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