SESAC Statement Regarding DOJ Decision
During the past week, several news reports have been circulated about the U.S. Department of Justice’s pending decision regarding its review of the consent decrees that govern how ASCAP and BMI operate. Last week, SESAC’s management received a briefing from the Antitrust Division of the Department of Justice regarding its review of the consent decrees. As you may know, SESAC is not subject to these or any other consent decree. However, we have monitored the review process closely.
Two years ago, at the urging of many in the music community, the DOJ opened a review of the consent decrees, which have not been updated in many years. The review appeared to be an opportunity for ASCAP and BMI to update and reform the decrees to reflect today’s digital marketplace. The DOJ decided not to adopt any of the proposals put forward by copyright owners to reform and update the consent decrees. However, it appears that the DOJ has interpreted the decades old consent decrees to require ASCAP and BMI to issue 100% licenses for every composition in their respective repertories, even if each organization only represents a fractional share of such song or composition. ASCAP and BMI would be required to offer 100% licenses even if only a portion of a song is in their repertoire and the song has multiple copyright owners that belong to different PROs. This interpretation represents a monumental departure from the industry practice that has governed the performing rights marketplace for many decades. SESAC submitted comments to DOJ arguing strongly against adopting this interpretation and urging the DOJ to maintain the current practice of fractional licensing because it is in the best interest of songwriters and publishers.
We expect the DOJ to announce their decisions publicly by the end of July. The DOJ’s decision, however, is only the beginning of a longer process. After the DOJ publishes its recommendations, it must discuss the recommendations with ASCAP and BMI, and have the recommendations approved by the separate federal judges that oversee ASCAP’s and BMI’s consent decrees. The issues being addressed by the DOJ could also be addressed in court proceedings or, alternatively, Congress could intervene with their views. Once a final decision is made, the DOJ will give the parties time to implement any required changes to licensing policies and practices. Please be assured that SESAC will continue to engage directly with DOJ, the other PROs, and Congress to protect the interests of our songwriter and publisher affiliates.
SESAC intends to release periodic updates in this fashion.