BMI’s victory highlights gulf between performance rates
US collection society BMI has this week claimed victory in a long-running court battle with Live Nation, AEG and the North American Concert Promoters Association (NACPA).
The new rate of 0.5% replaces a previously tiered rate of between 0.15% and 0.3% that has been in place since 1998.
BMI President and CEO Mike O’Neill says the long-running dispute “took millions of dollars and years of litigation” to arrive at, and the new rate will apply to additional revenues around shows including tickets sold directly to the secondary market, servicing fees that promoters receive, and revenues from box suites and VIP packages.
The ruling, handed down by New York District Court Judge Louis Stanton, says that the new 0.5% rate also applies retrospectively to shows that took place from 1 July 2018.
BMI had proposed a rate of 1% when negotiations began, a figure that was subsequently lowered to 0.08% when it began litigation. Requests by BMI to include revenue from sponsorship and advertising within the rate were rejected by Stanton.
BMI President and CEO Mike O’Neill says the long-running dispute “took millions of dollars and years of litigation” to arrive at
Responding to the ruling, Live Nation said in a statement, “We advocated on behalf of artists to keep their costs down, and managed to hold the increase to less than 1/3 of BMI’s proposed increase. This will cost the performers we work with approximately $15 million a year spread out over thousands of artists, and cost increases for Live Nation directly are not material.”
At the outset of the case in 2018, BMI said its total income from the US concert business was $20 million annually, or less than 0.19% of the industry’s revenue. This number is less than 2% of the $1.118bn it paid to songwriters in 2018 (BMI paid $1.5bn in 2022).
While BMI’s court victory will boost its revenues from concerts, the new rate is still a far cry from other concert markets. In the UK, PRS for Music negotiated an increased rate of 4% in 2018 for most live events. German society GEMA upped its tiered performance royalty rates in 2017 which ranged up to 8% of net receipts for events over 15,000-capacity.
Spain’s troubled collection society SGAE, which was fined €2.95 for anti-competitive practices in 2019 had previously been ordered by a court to review its 10% rate for concerts. And Switzerland’s SUISA also levies up to 10% for concerts, with discounts for members of trade associations.
Nonetheless, BMI’s O’Neill says, “the music created by songwriters and composers is the backbone of the live concert industry and should be valued accordingly. [The] decision also underscores BMI’s continued mission to fight on behalf of our affiliates, no matter how long it takes, to ensure they receive fair value for their creative work.”
Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.