Appeals Court Overturns Major Increase in Music Licensing Fees

Last month, a federal appeals court overturned a significant increase in song licensing fees that would have affected associations, concert promoters and live events across the country.

In a decision issued Tuesday, the U.S. Court of Appeals for the Second Circuit vacated a lower court ruling that had approved a 138 percent increase in blanket license fees for public performance rights from the Broadcast Music, Inc. (BMI). The panel found the previous decision relied on an approach that "imposed unreasonable rates" and lacked precedent within the industry.

The appeals court specifically criticized the use of a new revenue model that included income streams not closely tied to the fair market value of music, noting that it introduced added administrative complexity without clear benefit. The case has been remanded back to the lower court for reconsideration. 

The original 2023 ruling, issued by Judge Louis Stanton, had adopted BMI’s proposal to benchmark rates against those set by other performing rights organizations, including SESAC and Global Music Rights (GMR).

A broad coalition of associations and industry groups challenged that approach on appeal, arguing that it departed from longstanding standards. Groups including the Exhibitions & Conferences Alliance, International Association of Venue Managers, the Motion Picture Association, Radio Music License Committee, National Association of Broadcasters and Digital Media Association argued that licensing rates should instead be based on those established by ASCAP and BMI, which operate under legal requirements to set "reasonable" rates.

The decision is an important development for the meetings, events and entertainment sectors, where music licensing is a key operational cost.

"ECA applauds the appellate court's decision to vacate the original judge's ruling, which would have almost certainly imposed unreasonable costs on associations wanting to play music at their meetings and conferences," said Tommy Goodwin, MBA, FASAE, CAE, PMP, CMP, president and CEO of ECA. "ECA will continue to advocate for making it easier for associations and other event organizers to legally play music at their events."

This article was provided to OSAP by ASAE's Power of Associations and Inroads.