Caleb Gordon, News & Program Director for Liggett Communication’s WPHM-AM (Port Huron) visited two MAB member stations in the Upper Peninsula in May to gather interviews for his station’s local morning talk show.
Gordon visited Taconite Broadcasting’s WMQT and WZAM in Marquette and Aurora Media’s WYKX and WDBC in Escanaba to meet with local leaders and station personalities. The interviews were played back on June 10 when Gordon filled in for WPHM’s Paul Miller that morning.
Among the guests featured were Marquette’s mayor, a manager from Travel Marquette, Delta County’s Economic Development Alliance Director, the president of the Delta County Historical Society, and personalities from both Taconite Broadcasting and Aurora Media. Interviews from the UP tour can be found on WPHM’s podcast page and are dated June 10th.
Caleb thanks WMQT’s Jim Koski and WDBC’s Craig Woerpel for helping to line up guests and Aurora Media’s Todd Mohr for his hospitality!
All photos courtesy of Caleb Gordon. Thanks for sharing!
Ann Arbor-based Current Magazine, an arts, food, business and music, publication for Washtenaw County just concluded its 2019 Best of Washtenaw contest, as voted by readers. Best radio station award went to Eastern Michigan University’s jazz-formatted WEMU-FM (Ypsilanti).
Voting ended April 19 and winners were announced June 3. Congratulations to Molly Motherwell, Michael Jewett, Patrick Campion, David Fair and staff!
Elections were held at the NAB Board of Directors meeting, June 11-12 in Washington and Michigan’s own Bruce Goldsen, President/Co-owner of Jackson Works, Inc., was elected Radio Board Second Vice Chair.
Also at the meeting, Jordan Wertlieb, President, Hearst Television, Inc., was elected chairman of the NAB Joint Board of Directors, NAB announced today. Wertlieb takes over from Caroline Beasley, CEO, Beasley Media Group, whose term expired.
David Santrella, president of Broadcast Media, Salem Media Group, was elected Radio Board chair by the NAB Radio Board. Randy Gravely, president and CEO, Tri State Communications Inc., was elected Radio Board first vice chair.
Alfred Liggins, CEO and president, Urban One, Inc., was elected to the Radio Board’s major group representative seat on the NAB Board’s Executive Committee.
Emily Barr, president and CEO, Graham Media Group, was elected as NAB Television Board chair. Ralph Oakley, president and CEO, Quincy Media, Inc., was elected as TV Board first vice chair, and Perry Sook, chairman, president and CEO, Nexstar Media Group, Inc., was elected TV Board second vice chair.
Brandon Burgess, chairman and CEO, ION Media Networks, was appointed to the designated TV network seat on the NAB Board’s Executive Committee.
Gray Television’s WILX-TV (Lansing) has teamed up with Capital Area United Way to assist with the organization’s Diaper Drive to help low-income families who can’t afford to buy diapers for their children.
Baby and adult diapers, along with wipes can be donated until June 21, but diapers will be accepted until the end of the month.
The diaper drive will take any and all sizes and brands.
United Ways across the nation engage volunteers to help others on June 21 through their annual Day of Action.
This year they have partnered with LAFCU and the Lansing Ignite.
Items can be dropped off at all LAFCU locations (through June 20) or you can text uwdiaper to 41444 and make a monetary donation. That money will be used to buy diapers and add them to the drive.
Last year, over 12,000 diapers were collected. The drive goes until Friday, June 21.
Beasley Broadcast Group, Inc. announced June 10 that it entered into a definitive agreement to acquire WDMK-FM and three translators in Detroit from Urban One for $13.5 million in cash. Excluding one-time transaction costs, the acquisition of WDMK-FM is expected to be immediately accretive to Beasley’s free cash flow without materially altering the Company’s leverage. Beasley intends to fund the acquisition through borrowings under its credit facility and cash generated from operations.
Beasley currently owns and operates WCSX-FM, WRIF-FM and WMGC-FM in the Motor City.
Beasley’s acquisition of WDMK-FM is complementary to the Company’s three existing radio stations and digital operations in the Detroit market, the thirteenth largest designated marketing area in the country, and reflects the Company’s long-term focus on premium local programming and content.
Commenting on the proposed transaction, Caroline Beasley, Chief Executive Officer, said, “The accretive acquisition of WDMK-FM significantly enhances our revenue and competitive position in Detroit. Detroit is undergoing an exciting renaissance as a result of billions of dollars of new investments in the city’s residential, commercial, entertainment and cultural centers, all of which are driving new residents, businesses, tourists, employment and economic activity.”
“We entered the Detroit market in late 2016 and have consistently improved the operating results of the three stations we acquired, and we believe the proposed transaction is a strategically and financially compelling growth opportunity for our shareholders. The addition of WDMK-FM will mark further progress toward our goal of capturing 30 percent revenue share in each of our markets while delivering valuable synergies and the potential for SOI margin improvement.”
“Consistent with Beasley’s disciplined approach to growing our platform, the acquisition of WDMK-FM is expected to be immediately accretive to free cash flow, excluding one-time transaction costs, and with our strong balance sheet, we will continue to have the financial flexibility to make additional return-focused growth investments, while further reducing leverage and returning capital to shareholders.”
“We look forward to realizing the strategic benefits of the WDMK-FM transaction in 2020 as we continue to advance our initiatives focused on leveraging our premium local programming and brands, while aggressively rolling out our digital offerings and distribution capabilities to reinforce and grow Beasley’s leadership position across all audio platforms in our markets. This approach will enable us to deliver great local content to listeners while creating an even stronger marketing platform for local businesses.”
The transaction, expected to close during the fourth quarter of 2019, is subject to Federal Communications Commission approval and other customary closing conditions. The proposed transaction was brokered by Michael Bergner.
It is reported in the trade press that Urban One plans to continue its LMA with WGPR-FM until the end of 2019.
Congressman Tim Walberg (R-7) presented WLEN Radio with the National Association of Broadcasters Leadership Foundation’s Service to Community Award on Tuesday evening (6/11) at a ceremony in Washington, D.C. Lenawee Broadcasting’s WLEN-FM (Adrian) was recognized for its based annual “Thank a Vet” effort.
“I was proud to recognize the WLEN team, led by Julie Koehn, and congratulate them for earning this prestigious national award,” Congressman Walberg said in a press statement.
“At the foundation of building a strong community is honoring the promises we have made to our veterans. WLEN has done exceptional work in raising money for local veterans, including those who are homeless. For all of us who call Lenawee County home, we’re grateful for WLEN’s commitment to giving back to the community.”
Each Veteran’s Day, WLEN’s “Thank a Vet” program raises funds to offer immediate help for veterans in need. Last year, over $30,000 was raised to assist veterans in Lenawee County. More than $250,000 has been raised since effort began.
As of June 13, nine more members of the House of Representatives and one Senator have added their co-sponsorship to the Local Radio Freedom Act (LRFA), which is a resolution opposing “any new performance fee, tax, royalty, or other charge” on local broadcast radio stations.
In the House, more support came from Representative James Baird (R-IN-4), Troy Balderston (R-OH-12), Anthony Gonzalez (R-OH-16), Mike Johnson (R-LA-4), Daniel Meuser (R-PA-9), Denver Riggleman (R-VA-5), Mac Thornberry (R-TX-13), William Timmons (R-SC-4) and Rob Wittman (R-VA-1).
In the Senate, Senator Joni Ernst (R-IA) added her support.
The Local Radio Freedom Act says “Congress should not impose any new performance fee, tax, royalty, or other charge relating to the public performance of sound recordings on a local radio station for broadcasting sound recordings over the air, or on any business for the public performance of sound recordings on a local radio station broadcast over the air.”
MLive reports that House Republicans continue to push a budget plan that would replace the state’s 6-percent sales tax on gasoline with a fuel tax to be allocated to infrastructure. The House plan calls for all the funds currently collected as sales tax to be shifted to roads, generating an estimated $830 million.
Currently, the tax collected at the pump largely goes to schools and local governments.
In an effort to maintain existing funding for schools, the overall House plan shifts school aid fund dollars out of the university budget and into the K-12 budget.
The plan lacks Democratic support with one representative saying it doesn’t do enough to bring Michigan’s roads up to snuff.
The AP reported on Wednesday (6/12) that Michigan Governor Gretchen Whitmer has signed an executive order creating a committee aimed at encouraging an accurate federal census in the state next year.
MAB President/CEO Karole L. White has been appointed to the committee.
“Not only does the state depend on the census as the basis for the number of federal funds it receives to help serve our residents, but broadcast markets are also drawn and ranked according to the population as set in the census,” she said. “Right now Detroit is in the 15th Media Market Nationally. Any slip in population or under count could mean a loss of market position resulting in a significant loss in advertising dollars for stations in rated markets.”
In a release, the governor said the 2020 United States Census Complete Count Committee, which she leads, has roughly 60 members from numerous organizations and communities statewide. It includes business, academic, governmental and faith-based representatives.
The purpose of the group, according to Whitmer, is to ensure a comprehensive count so Michigan gets the right amount of federal money as well as accurate representation in the U.S. House of Representatives. The committee is charged with raising awareness of the Census and identifying and overcoming barriers to achieving a full count. The group will be advising the Department of Technology, Management and Budget.
More information on the Census to come as the very large committee gets together to set their plans.
The Department of Justice’s Antitrust Divisionannounced on June 5 that it was starting a review of the ASCAP and BMI antitrust consent decrees that govern the United States’ two largest performing rights organizations for musical compositions (referred to as the “musical work”). The DOJ’s announcement of the initiation of the examination of the consent decrees poses a series of questions to which it invites interested parties – including users, songwriters, publishers and other interested parties – to file comments on the decrees, detailing which provisions are good and bad and, more broadly, whether there is a continuing need for the decrees at all. Comments are due on July 10.
This re-examination of the decrees has been rumored for many months. Back in March, we wrote about those rumors and the role that Congress may play in adopting replacement rules should the DOJ decide to fundamentally change the current provisions of the consent decrees. The DOJ itself just recently looked at the consent decrees, starting a review only 5 years ago with questions very similar to those it posed yesterday (see our post here on the initiation of the last review 5 years ago). That review ended with the DOJ deciding that only one issue needed attention, whether the decrees permitted “fractional licensing” of a song. We wrote about that complex issue here. That issue deals with whether, when a PRO gives a user a license to play a song, that user can perform the song without permission from other PROs when the song was co-written by songwriters who are members of different PROs. The DOJ suggested that permission from one PRO gave the user rights to the entire song, an interpretation of the decrees that was ultimately rejected by the rate courts reviewing the decrees (see our article here). So, effectively, the multi-year review of the consent decrees that was just concluded led nowhere. But apparently the DOJ feels that it is time to do it all again. To fully understand the questions being asked, let’s look at what the consent decrees are, and why they are in place.
Because ASCAP and BMI together account for over 80% of musical compositions that are publicly performed by various music services, and tie all of the compositions that they represent in one blanket license sold to music users, they have, for almost 80 years, been subject to antitrust consent decrees. By tying the sale of these diverse musical compositions into one “take it or leave it” license – a license that virtually all music users cannot do without – these organizations have substantial market power. Thus, these consent decrees were put in place to guarantee that these PROs dealt fairly with both music users who buy the licenses to use the musical works, and with the songwriters and publishers whose music they license.
While the decrees are complex with many intricate details, and the two have provisions that are slightly different, perhaps the overriding consideration in each is that they treat similarly situated parties alike. The consent decrees require that ASCAP and BMI make available licenses on the same terms to all similarly situated music users. They also require that the PROs treat all songwriters in the same way. So whether you are a small AM station in the middle of Wyoming or a monster FM in New York City, the formula used to calculate the rates that apply to commercial radio stations are the same. Similarly, ASCAP and BMI pay all songwriters at the same rate for performances of their music – they can’t offer some famous composer a higher rate than they offer the writer of a single obscure song (of course, the popular writer will be paid more as his or her song will be used more than the obscure song – but the rates at which payment will be made will be the same). For music users, the decrees also set up a rate court process where, if the PRO cannot agree with users as to an appropriate license for a particular use of music, a US District Court will act as a “rate court” and conduct a judicial proceeding to decide a fair rate for the use of the music (see our article here about the current rate court proceeding between RMLC on behalf of the commercial radio industry and BMI).
With that background, let’s look at the questions posed. The DOJ asks questions including:
Do the Consent Decrees continue to serve important competitive purposes today? What provisions could be changed and how would those changes improve competition?
Are the differences between the two consent decrees important for competition?
Would termination of the Consent Decrees serve the public interest?
If termination would be in the public interest, should there be a sunset period and what rules would provide for an efficient transition?
Are there differences between ASCAP/BMI and PROs that are not subject to the Consent Decrees that adversely affect competition?
Are existing antitrust statutes and applicable caselaw sufficient to protect competition in the absence of the Consent Decrees?
Small users in particular should carefully consider this review. While, in the absence of consent decrees, big users might have the resources and marketplace clout to be able to negotiate their own music licenses (though, as set out below, that is not guaranteed), smaller users would find that process to be much more difficult. As we wrote back in March, there are no definitive databases that exist to determine who owns what songs (though one is promised by the recent Music Modernization Act) – and with fractional licensing there may be several permissions needed to simply play one song. For any music user that uses many songs – whether that user is a radio station, a webcaster, some sort on-demand music service, or a retail outlet or bar or restaurant that plays music for its customers – there are thousand or potentially millions of permissions that they would need to obtain. Small companies are not likely to have the resources or the knowledge to even find out who to negotiate with for the use of particular songs, and even if the PROs still exist in some less-regulated format, will these small services be able to effectively negotiate the necessary licenses? Now, they can rely on the resources of the bigger companies to negotiate fair rates that will apply to the entire industry. But if the PROs are no longer required to provide the same licenses to all users, will these small users be treated fairly? There is no apparent answer to the question of who is going to be able to fairly and equally provide that service currently provided by ASCAP and BMI under the current consent decrees.
With unregulated collectives, there are always concerns about anticompetitive behavior. The radio and TV music licensing committees both took SESAC, a privately-owned performing rights organization not subject to a consent decree, to court alleging anticompetitive behavior. Both ended up with private settlements imposing a rate-review processes that in many ways mimics the review provided under the consent decrees (see our article here on radio’s final result from the SESAC rate-setting, and here on the TV settlement). A similar process is now underway trying to bring GMR under such a rule process as the radio industry alleges that GMR is seeking rates that are not competitively based given its aggregation of certain must-have songwriters (see our articles here, here and here on the GMR litigation). Why would the DOJ look to be undoing rules on the two biggest PROs, while courts have imposed similar rules on smaller PROs?
The inefficiencies of the unregulated direct negotiation process are evident from the on-demand music services. Until the passage of the Music Modernization Act, these services had to negotiate with rights holders for all of the rights needed to provide music to their customers. That process, even with these large services with lots of resources to devote to music licensing issues, ended up resulting in lawsuits against companies by artists and their representatives claiming that they were not paid for the use of their music. The complexity of the licensing process led to the adoption of the Music Modernization Act which hopes to make that process easier through a legislatively-designed and government regulated (through the Copyright Royalty Board) process (see our articles here and here). So, while the Music Modernization Act makes what was the complex world of mechanical rights licensing easier, deregulating the PROs has the potential to make public performance space more complex (as we suggested here).
There are many issues to consider in this review of the consent decrees. We will no doubt be writing about other issues in coming weeks. But all music users should carefully be watching these proceedings, and should take the opportunity to let the DOJ know how the decrees affect the way that they do business, and what would happen if the decrees were to be fundamentally altered as a result of this review.
David Oxenford is MAB’s Washington Legal Counsel and provides members with answers to their legal questions with the MAB Legal Hotline. Access information here. (Members only access).
There are no additional costs for the call; the advice is free as part of your MAB membership.