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Press Release: Television Stations Charge SESAC with Restraint of Trade in Music Licensing
NEW YORK, N.Y. — Local television stations are being overcharged for music in their programming as a result of anticompetitive practices by SESAC, LLC, a group of broadcasters charges in a class action antitrust complaint filed today in U.S. District Court here.
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, according to the suit.
The broadcasters’ complaint asks the court to order SESAC to stop price fixing and other anticompetitive acts, and seeks treble damages under the antitrust laws.
SESAC, a for-profit entity based in Nashville and New York, is one of three U.S. performing rights organizations (PROs) that represent composers and music publishers in the U.S. It licenses collectively the right to “publicly perform” SESAC members’ music over television, radio and the internet, and in stores, restaurants, stadiums and other public venues and media, in exchange for annual fees. These fees are used to pay royalties to songwriters and music publishers who own the copyrights in the compositions.
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. Thus, to avoid broadcasting music without a license — a violation of copyright law — they have no choice but to accept SESAC’s licensing terms.
SESAC represents music in programs such as “House,” “Two and a Half Men,” “Dr. Phil,” “Ellen,” “Entertainment Tonight” and “Seinfeld.”
ASCAP (the American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc.), the other PROs, have been regulated for decades by consent decrees issued following antitrust suits brought by the U.S. Department of Justice. The broadcasters’ complaint accuses SESAC of engaging in "the very same practices that ASCAP and BMI were barred from continuing and the Consent Orders were designed to prevent."
The ASCAP and BMI consent decrees provide for fees to be set by a court if a music user and the PRO are unable to come to terms, without the threat of a copyright infringement suit. No such mechanism exists for users of SESAC music, the complaint states.
SESAC has previously negotiated licenses for local television stations with the Television Music License Committee, an organization that negotiates industrywide licenses on behalf of over 1,200 stations with the other PROs. Starting in 2008, SESAC decided to license broadcasters individually, imposing substantial rate increases despite stations’ reduced use of SESAC music in some cases.
“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,” said Charles Sennet, chairman of the Committee.
Class representative plaintiffs in the suit are Meredith Corporation, E.W. Scripps Company and Hoak Media Corporation.
For further information contact:
Will Hoyt, Executive Director
Television Music License Committee, LLC
212-308-9040 or at 917-414-5893
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