Second Circuit Court of Appeals Refuses to Reconsider BMI Concert Rate Decision — A Huge Win for Live Nation, AEG, MSG, C3, and Others

Music The Second Circuit Court of Appeals has refused to reconsider its rate-setting decision in a marathon legal battle involving Live Nation and different promoters.

The appropriate two-judge panel and the appellate court itself just recently rejected a pair of related requests from Broadcast Music, Inc. (BMI). And these requests followed a late-February decision in favor of the North American Concert Promoters Association (NACPA), which was seeking to overturn a district court’s BMI license terms.

(A bit more context from the same decision: Live Nation and AEG Presents “control approximately 75 percent of NACPA’s members” and “pay about 90 percent of the fees under NACPA’s license with BMI.”)

Unsurprisingly, in light of the ensuing legal battle, those terms would have established a dramatic public performance rate hike for the live litigants – to the tune of an “unreasonable” 138% increase.

On the heels of a five-week trial, “the district court adopted a definition of the revenue base that had no precedent in the history of the industry without a compelling reason,” according to the two-judge ruling. (A third circuit judge recused herself.)

(Without retreading too much ground here, exactly what to include in live-rate calculations – actual ticket revenue, VIP package revenue, etc. – has been debated for a while now. And among other things, the district court rate proposed dinging NACPA 0.5% of gross revenues for 2018-22.)

Additionally, the same lower court “identified no change in economic circumstances that would justify a rate more than double what NACPA has historically paid to BMI and to the American Society of Composers, Authors, and Publishers” (ASCAP), per the text.

While a big win for promoters, the appeals setback didn’t sit right with BMI, which filed a petition for panel rehearing or, alternatively, rehearing en banc.

But as laid out in the corresponding order, the relevant panel rejected the former request, while the “active members” of the court denied the latter.

With that, it appears the case’s next step is reconsideration, in keeping with the appellate court’s decision and vacated judgment, back at the district court level.

As we previously reported – and as emphasized by BMI in a statement addressing the February decision – said reconsideration might still bring a rate increase. Wherever the cards fall, however, this increase would be smaller than that handed down the first time around.

Separately, BMI remains embroiled in a rates confrontation with SiriusXM; per a January scheduling filing, additional discovery and depositions are expected to keep the litigants busy into at least September.