The arbitration process governing SESAC’s performance license fees determined that the 2023-2026 license period will be set at a general fee of 0.2824% of revenue – or a 10.4% increase over the rate in the previous period of 0.2557% of revenue – according to a press release from the Radio Music Licensing Committee (RLMC).

The fee is the amount that SESAC, a performing rights organization (PRO), can charge stations in return for playing works from their repertoire over terrestrial radio.

Each side characterized the final rate determination differently, with RLMC claiming victory because the arbitration panel rejected SESAC’s efforts to more than double the rate, as well as substantially expand the license revenue base. But SESAC says the arbitration award reflects a failure by RLMC in its bid to lower the rate.

The rates decision is retroactive to 1 January 2023, meaning stations paying the SESAC interim license fee at 2022 rates will receive “a modest adjustment”. The arbitration process governing SESAC rates arose out of a 2015 RMLC antitrust litigation settlement with SESAC that established a rate arbitration process for the next 20 years.

The RMLC announcement alleges that SESAC sought to justify its efforts to raise fees and expand its licensing revenue base by relying on fees set for other music licensors.

Meanwhile, SESAC’s statement of determination says RMLC failed in its attempt to tie SESAC’s rates to those of BMI and ASCAP, the two U.S. PROs that operate under consent decrees requiring a rate process in the District of South of New York when negotiations fail. .

“Despite the fact that no increase was warranted, the arbitration decision reported here is a significant victory for radio stations represented by the RMLC given the requirements of SESAC and comes at a difficult economic time for the industry,” said the RMLC president , Ed Atsinger, in a statement. “The RMLC intends to continue to defend and protect the interests of its members at a time when all performing organizations are looking to aggressively raise their rates.”

In another aspect of the rate determination, the RLMC said “the long-term license terms are still being worked out, but it is expected that stations in the non-music format will continue to pay the same 77.5% discount” of to the music stations above. ‘ title rate. Mathematically, that means the RMLC expects the non-music rate charge to be set at 0.06354% of revenue, or a 10.5% increase from the previous rate of 0.0575%, Panel estimates.

“The arbitration award reflects another failure by RMLC to impose regulated rates on SESAC since SESAC and RMLC entered into their agreement in 2015,” SESAC President and CEO Scott Jungmichel said in a statement. “The commission awarded SESAC an increase of more than 10% while rejecting RMLC’s attempts to lower the rate, turn back the clock, and yoke SESAC to the regulated rates paid by ASCAP and BMI. In addition, the revenue base subject to the charge is significantly higher than the revenue that the station groups sought to pay under the 2017 award.”