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NOTICE TO RMLC STATIONS

September 17, 2012

We are pleased to inform you that Broadcast Music, Inc. (“BMI”) and the Radio Music License Committee (“RMLC”) have reached an agreement on final fees and terms of a BMI Radio Station Blanket/Per Program License Agreement and BMI Radio Group Transmissions License Agreement (together, the “BMI-10 Licenses”) for your radio station(s) for the period 2010-2016. The agreements summarized below were ratified August 28th, 2012 by BMI Rate Court Judge Louis L. Stanton of the Federal District Court for the Southern District of New York. BMI is also pleased to offer online execution of the new agreements and instructions to do so have been communicated to the RMLC licensees.

SUMMARY OF AGREEMENT. The BMI-10 Licenses will affect your station as follows:

  • BMI-10 LICENSES. The BMI Radio Station Blanket/Per Program License Agreement shall cover all traditional terrestrial/analog broadcasts, HD/multicasting broadcasts and new media transmissions made by radio broadcasting stations. The BMI Radio Group Transmissions Agreement shall cover only those new media transmissions made by a radio station owner that are not otherwise licensed under the BMI Radio Station Blanket/Per Program License Agreement.
  • 2010-2011 INTERIM FEES FINALIZED. The agreement provides that interim fees paid during 2010 and 2011 will become final, subject to $70.5 million in credits attributable to those years. Each Licensee will receive its pro-rata share of the $70.5 million reduction, which sum shall be credited in full to Licensees’ accounts as of June 1, 2012. For the sake of clarity, BMI shall not issue cash refunds (e.g., checks or wire transfers) to stations for any portion of a station’s credit. To allocate the $70.5 million amongst Licensees, the parties agreed upon the following methodology (which they will ask the Court to “so order”):
    • Station’s Share of Reduction = (Station’s Combined 2010-2011 Interim Fees billed) divided by (Combined 2010-2011 Interim Fees billed for All Stations) multiplied by ($70.5 million)
    Credits shall be applied against the monthly bills of the current owner of record as of June 1, 2012, and shall be reduced by any existing balances or judgments due, including interest for the period prior to June 1, 2012.
  • 2012 ESTIMATED FEES. The agreement provides for an immediate reduction in stations’ monthly fees for 2012, reflecting an adjustment from the aggregate industry interim fees for 2012 ($192 million) to the estimated aggregate industry fees for 2012 under the new agreement (approximately $150 million), retroactive to January 2012. Estimated 2012 station fees will be subject to adjustment as of April 2013 based on stations’ timely submission to BMI of reports of their 2012 revenue.
  • FINAL FEES FOR 2012-2016. For the years 2012 through 2016, stations electing to operate under a blanket license will pay 1.7% of gross revenue, less a deduction of 12% for revenue derived from terrestrial/analog and HD/multicasting broadcasts and a 25% deduction for revenue attributable to new media uses. Stations operating under a per program, or “program-period,” license and that have no performances of feature BMI music will pay a fee of 0.2958% of gross revenue, less the same deductions noted above. Supplemental fees for program-period stations will be consistent with those required under the 2007 BMI Radio Station Blanket/Per Program License Extension Agreement (BMI-07) or the 2010 BMI Radio License Extension Agreement (LI-01/10-RMLC-07-Ext).

Please email your account representative with any questions at licensing@bmi.com.

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