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SESAC Tempts Stations With “Instant Gratification” Offer

As RMLC antitrust settlement is negotiated, some stations may gamble on reduced fees for 2016–18

In “SESAC Seeks to Sidestep Settlement,” Fletcher Heald and Hildreth attorneys Kevin Goldberg and Harry Cole addressed letters recently mailed by the Radio Music License Committee and a separate one sent by SESAC to radio stations.

Both letters were sent as a result of the settlement of RMLC’s antitrust lawsuit against SESAC; however, the SESAC missive appears to be an attempt to convince stations to take a quicker discount for 2016–18, in favor of the fee rates that have not yet been solidified by the RMLC negotiation/arbitration.

The fee reduction offer from SESAC is 5% for 2016, with 2017 and 2018 being subject to cost-of-living increases based on the Consumer Price Index-All Urban Consumer. It also will enable stations to avoid RMLC’s administrative fee.

However, RMLC counters that the SESAC offer doesn’t guarantee any fee reductions after 2018, while the settlement agreement will do so for at least two decades, aside from other settlement benefits.

“The deal presented in the SESAC letter currently being circulated is separate and distinct from — and mutually exclusive with — the RMLC settlement arrangement,” Goldberg and Cole write. “Stations need to recognize that and, to the extent they have questions or concerns about which way to go, they should consult with their counsel before making a decision.”

The deadline for accepting SESAC’s offer is Nov. 15, and stations must sign up with RMLC by Nov. 20.

For more context, please refer to the full CommLawBlog post.