Irving Azoff has hired superstar attorney Daniel Petrocelli to defend Global Music Rights against a lawsuit and preliminary injunction filed by Radio Music License Committee. In an interview with Amplify, Petrocelli called the legal action a “Thanksgiving ambush” and said it was “ridiculous” that a group representing 10,000 radio stations could accuse a two-year-old company with less than 100 artists of being a monopoly.
“It’s very, very simple. We’re a new startup company. The real market power here is with the RMLC, which is trying to threaten Global Music Rights so that they can pay as little as possible for the music they’re playing on the radio,” explained Petrocelli, one of the country’s best-known litigators. Petrocelli successfully represented Fred Goldman, the father of murder victim Ron Goldman, in a wrongful death civil suit against O.J. Simpson. Petrocelli also currently represents President-elect Donald Trump in the Trump University lawsuit.
Petrocelli accused RMLC of “trying to impose their monopoly power on a small startup company who’s representing artists and songwriters,” adding “I think the lawsuit is unprincipled and I think that they have subjected themselves to great liability by bringing this case, which we’re going to defend vigorously.”
Lawyers for RLMC are asking a judge to issue a preliminary injunction to force GMR to license its entire repertoire to radio stations at rates similar to other PROs like ASCAP and BMI. RMLC lawyers told the judge the injunction was necessary to stop Azoff’s company from suing radio stations for copyright infringement beginning Jan. 1, but attorneys for the startup said the lawsuit is simply a legal tactic to influence ongoing negotiations.
The lawsuit is the first legal test of whether another performance rights organization can effectively operate outside of a 75-year-old Department of Justice consent decree that governs North America’s two largest PROs — ASCAP and BMI.
That decree dictates how much PROs can charge radio stations, streaming services and venues and restaurants for the performance of copyrighted music. In hopes of generating more revenue for a small cadre of elite songwriters, Azoff formed Global Music Rights in 2014 with the expressed intent to charge higher licensing rates for its artists.
How high? The RLMC accuses GMR of charging nearly triple the price other PROs charge, and in a legal filing, argue that “GMR offers only a fractional license, which means that for a majority of the works in GMR’s repertory which consists of co-owned works only partially controlled by GMR, GMR’s position is that its blanket license would not protect a station from an infringement lawsuit by the owners of the remaining fractions.”
Attorney Petrocelli argued that fractional licensing is an industry standard recently upheld by a federal judge (that ruling is now being appealed by the DOJ). He characterized the lawsuit as little more than a heavy-handed negotiating tactic.
“They are literally asking the court to enable them to play songs over the radio without a license and without payment, and without any risk of liability for infringement,” Petrocelli said. “We bent over backward to try to make a deal with them, and we were negotiating in good faith, but it turns out they were planning this secret Thanksgiving ambush all along.”
Petrocelli also denied charges that GMR had been threatening to start suing radio stations on Jan. 1 if its demands weren’t met.
“We offered them all kinds of arrangements, including an interim license to avoid the need to file this lawsuit, and they rejected everything, because what they really want is to ask the court to impose what the law does not provide, which is a compulsory licensing scheme with regulated rates so that they can continue to pay very little for the music that they’re playing.”
Larger Test For Independent PROs
For many, the lawsuit against GMR was an inevitability — in the face of higher licensing costs, many believed it was only a matter of time before someone tried to challenge a performing rights organization that exists outside of the DOJ consent decree.
The other PRO that operates outside of the consent decree is SESAC, which was sued by RLMC in 2012 and reached a settlement three years later that locked in licensing rates for the next 20 years. SESAC and GMR are seen as existential threats to big music users like Google, Spotify and Pandora. After all, if GMR is successful, what is to stop other songwriters from breaking off from big organizations like ASCAP and BMI and forming new PROS to demand higher fees.
It’s also strange that RLMC has chosen to sue GMR now, when the company is still in its early stage. Sure, Azoff and other GMR executives have made strong statements to strengthen its negotiating position, but for RLMC to chose to sue GMR in the middle of licensing talks seems a bit premature. If GMR is a monopoly, as RLMC alleges, it hasn’t yet exercised its monopolistic powers.
“The radio stations, they’re the ones with the power. They’re the ones who can stop playing the music if they want,” Petrocelli said, later adding “they manufactured this emergency by pretending to be negotiating with us and then created a year-end crisis so that they can appeal to the court for relief. We’re confident that their gambit will fail.”