Friday, 11 March 2016 12:43

ESPN Under Fire And Facing Massive Licensing Fees

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Gillette StadiumAmbient music has become the latest theme in sports broadcasting. That is, the music that plays in stadiums which is then picked up by broadcasters' microphones and heard then through viewers' television speakers. ESPN is being asked to pay more than $15 million annually in order to appropriately license this music.

Determining this fair use process is a case-by-case basis, and BMI is claiming that paying for a blanket license is particularly important. The PRO believes that the benefit of having this blanket license is that it will act as an "insurance against copyright infringement, relief from the need to separately identify each and every composition inserted into its programming, greatly reduced transaction costs, streamlined collection and payment of royalties, and immediate access to more than 10.5 million works in BMI's repertoire."

ESPN argues that they acquire music rights through direct licenses, which is unlike most television networks, and is asking for a break on the tough payments as a result. However, BMI stands strong in its stance that "Advertisers place a premium on live sporting events…and ambient stadium music is a critical component of the broadcast..."

BMI believes that there is no easy substitute for the value of the licenses it provides, and sites a specific case that declared news and sports networks to pay just 0.1375% of gross revenue. Taking into account ESPN's $11 billion in revenue in 2014, this is precisely how the licensing agency came about the $15 million-per-year figure.

While that all may seem pretty concrete, things get blurry when referring back to 2006 when ESPN did agree to the 0.1375%, but also requested and received an option where the formula would be adjusted to encompass a "program fee" and an "incidental and ambient uses" fee. However, BMI is presenting evidence to the law that show ESPN paying rates that are far below what was agreed, and that their use of ambient music has greatly increased.

To follow the suit and read a more in depth report, the full article can be found both on Billboard and The Hollywood Reporter.

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