ASCAP ruling may save TV millions

Both sides are claiming victory in the wake of a federal court’s decision setting the music licensing rates that TV broadcasters must pay to ASCAP.

The ruling guarantees local broadcasters the choice between a per-program license or a blanket license based on a flat fee.

ASCAP had sought a blanket license based on a percentage of each station’s revenue.

Since since Feb. 1, 1983, stations have paid various interim fees at a rate comparable to the blanket license.

“This decision should save at least $ 50 million between now and the end of 1995 when measured against what ASCAP asked the court in fees,” said Jack Zwaska , administrative director of the TV industry’s music license committee.

The 226-page decision, handed down Feb. 26, resolves a dispute that began in 1985 when the TV broadcasting industry and the American Society of Composers, Authors & Publishers were unable to agree on a rate structure.

Rate determination went to the Federal District Court for the Southern District of New York, commonly called “the ASCAP rate court,” in accordance with a 1950 antitrust consent decree.

Zwaska said the industry would save an additional $ 200 million against ASCAP’s demands for the 10-year retroactive period from 1983 to January 1993, as well as $ 150 million in Broadcast Music Inc.’s fees, which are tied by contract to the ASCAP rate court.

The performing rights organization was not regarding the decision as a defeat.

“It’s very complicated,” ASCAP general counsel Bernard Korman said of the decision, “but it appears that there will be no significant change” in the amount of money paid annually to ASCAP.

In fact, Korman said, the complicated formula used by Judge Michael Dolinger would grant ASCAP an increase above the $ 72 million it received in 1992, and that it would continue to increase in 1994 and 1995, thanks in part to inflation adjustments based on the Consumer Price Index.

Korman flatly dismissed Zwaska’s “savings” figures.

Zwaska seemed to agree with Korman’s assessment of the money involved in Dolinger’s complex system to determine annual blanket fees from 1983 to 1995. “At first blush it appears that it will average out to about what we paid during the interim period anyway,” Zwaska said. “Essentially, what we paid in the first place is what we owe in the last place.”

Zwaska added that the court’s ruling in favor of a per-program license could lead to direct negotiations between composers and producers for music rights, again saving time and money.

Per-program licenses have been used occasionally in the past, but only for syndicated programs. Dolinger ruled that the per-program method can be applied to both syndicated and locally-produced programs.

Still to be determined is how individual stations will divvy up their portions of the blanket fee.

U.S. TV stations instituted the rate court proceeding in 1985 after a federal appellate court overruled a New York district court decision that application of ASCAP’s blanket license system to the stations violated antitrust laws.

Television station representatives argued that station blanket license royalties should be based on flat fees, similar to those charged to networks, rather than on a percentage of revenue.

ASCAP’s Korman said no decision had been made on an appeal.

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