Miscellaneous Royalty Rules
Direct Licensing of Works
If a songwriter, composer or publisher directly licenses to a user or source licenses to a production company the right to perform one or more works, BMI must be notified in writing within ten days of the issuance of the license or within three months of the performance, whichever comes first.
A copy of the license should be attached to the notification (with the amount paid for the license deleted, if desired). As license fees for direct or source licensed performances cannot be collected by BMI, no royalties will be paid by BMI for these performances. If the direct or source license includes performances for periods for which BMI has already paid royalties because we were unaware that such a license had been issued, a debit will be made to the songwriters’ or composers’ and the publishers’ accounts with respect to such performances.
All claims for adjustments to royalty distributions must be made in writing to your local Writer/Publisher Relations office within nine months of the date of the distribution seeking to be adjusted. Adjustments to royalties which were or should have been paid more than nine months before notice of the claim is received by BMI will not be considered.
BMI will prepare timely-requested adjustments to U.S. royalty distributions in those situations where royalties were paid incorrectly, as long as the total amount of the adjustment likely will exceed $25. If no payment was made because of missing/late cue sheets or work registrations, royalties will be paid beginning with the first possible distribution after all documents are received and processed, provided that they are received within nine months after the distribution in which royalties otherwise would have been paid had the necessary documents been submitted to BMI in a timely fashion.
Because many foreign PROs have strict cutoff dates beyond which they will not consider adjustment requests, all claims for foreign adjustments should be submitted in writing within nine months of the date of the foreign distribution in which royalties were incorrectly paid or expected royalties were missing, along with detailed information about the incorrect or missing payments. BMI will research the matter and request an adjustment, where appropriate, from the foreign PRO, provided that the amount expected to be received from the foreign PRO will exceed $25. Any additional royalties received from the foreign PRO as a result of BMI’s adjustment request will be remitted to you as part of the next possible distribution following receipt of the royalties by BMI.
Overpayment of Royalties
In the event that royalties are paid in error to any writer or publisher, BMI will debit the mistakenly-paid affiliate’s account in the amount of the overpayment. In addition, if based upon past BMI earnings history and projected future royalty earnings from BMI, there is no reasonable expectation that BMI will be able to fully recoup the overpaid amount within the four distribution quarters following the debit, the affiliate will be expected to repay on request the balance of the overpayment that remains unrecouped. In the event that BMI makes a royalty distribution based upon interim fees received from a licensee and the final fees subsequently determined to be payable by that licensee are less than the interim fees upon which the distribution was based, BMI reserves the right to debit all writers and publishers to whom such interim fees were distributed in an amount that appropriately reflects the difference between the interim and final license fees.
Payment From Another Organization
In the event that BMI has reason to believe that you will receive or are receiving payment from a performing rights organization other than BMI for or based upon United States performances of one or more works for a period when those works were licensed by BMI for you, BMI shall have the right to withhold payment from you for such performances until BMI receives satisfactory evidence that you have not been paid or will not be paid by the other organization. In the event that you were or will be paid or do not supply such evidence within 12 months from the date of BMI’s request, BMI shall be under no obligation to make any payment to you for performances of such works for that period.
Assignments of Royalties
BMI will recognize an assignment of your royalties to a third party in certain circumstances, including to a lending institution or other person or entity who makes a bona fide loan of a specific sum of money to you which is intended to be repaid, in whole or in part, from your BMI royalties. A special loan assignment form, executed by both you and the lender and acknowledged by BMI, must be completed and signed before BMI will pay your royalties to the lender. The form can be obtained from your local Writer/Publisher Relations office. The fee schedule for updating BMI’s records to reflect temporary loan assignments can be found on the form.
BMI also will accept certain irrevocable permanent assignments of royalties to a third party who purchases your royalty income stream. BMI requires the completion of and your signature before a Notary Public on the BMI Royalty Assignment Form (RAF) and an IRS Form W-9 from the purchaser. The current fee for handling these kinds of assignments is $1,000 for each payee account that must be established to redirect your royalties and will be deducted from the first monies due the purchaser. There is no fee if the assignment is made to your solely-owned corporation, LLC or trust. The RAF can be downloaded from the forms page on bmi.com. Please note that BMI’s acceptance of permanent assignments is subject to specific limitations and conditions.
Royalties Withheld Due to Litigation
If BMI is named as a party to a lawsuit, BMI may withhold royalties relating to that dispute. Further, BMI will withhold royalties earned by any works that are the subject of litigation, upon receipt of a copy of the complaint as filed with the court and a written directive to BMI from the court requiring such withholding.
In addition, upon the written request of any affiliate whose royalties are being withheld, when accumulated royalties exceed $1,000, the royalties will be transferred to an interest-bearing bank account, at money-market rates. All such principal and interest is remitted to the writer(s) and/or publisher(s) who are determined by final, unappealable decision, or by settlement between the litigants, to be entitled to the funds, upon submission to BMI of a copy of the final court order or settlement documents.
In lieu of the withholding of royalties during litigation, BMI will accept a letter of direction, signed by all parties to the lawsuit, to pay the royalties to a third party escrow agent as they become payable. In such case, the royalties will not generate interest through BMI.
Legal Process Administration Charges
Due to BMI’s increased costs in handling legal process that is received against certain affiliates, it has become necessary to institute an administration fee for such matters. If BMI is served with a state or federal tax levy, restraining notice, order to withhold, judgment, child support order, or the like against you which requires BMI to hold or pay your royalties to another party who has a legal entitlement to them, you will be assessed a handling fee of $100 (or such lesser amount as may be required by the authority issuing the process). The $100 fee will be deducted from the next royalty distribution of each affected account following adjustment of BMI’s records to reflect the process. The handling fee will be assessed for each new process received, except that you will not be charged an additional fee if BMI receives updated process while previous process for the same obligation is still in force according to BMI’s records.
If you are obtaining a divorce and you request BMI to separately account to you and your ex-spouse with respect to works for which royalties are divided between you (or if BMI is provided with a copy of your signed divorce decree that contemplates such separate accountings), a fee of $250 will be charged to update your account if you have 500 or less registrations (feature works and cues) to be divided. If there are more than 500 registrations to be divided, the charge is $250 for the first 500, then $1 per registration thereafter.
Stop Payments And Re-Issuance Of Royalty Checks
The fee for this request is predicated on the amount of the check and will be deducted from the reissued payment: $30 deducted from checks $100 and up and $10 deducted from checks under $100. Stop payment orders cannot be accepted for royalties which have been directly deposited into the payee’s bank account; however, a fee will be deducted for direct deposits returned by the payee’s financial institution. The same fee structure as indicated above applies.
BMI shall have the right, in its sole discretion, to suspend future royalty distributions and/or terminate any affiliation agreement on notice by registered or certified mail, FedEx or similar courier service with receipted delivery and/or any other method of delivery permitted under the affiliate’s agreement with BMI, if an affiliate, an affiliate’s agents, employees or representatives, directly or indirectly (a) makes false or misleading statements to BMI including but not limited to submitting false documentation (e.g., works registrations or cue sheets) or otherwise causing or contributing in any way to inaccurate reporting of the ownership and/or use of any affiliate’s work(s); (b) threatens the safety or security of, or otherwise engages in harassment of, BMI and/or its employees; or (c) takes frivolous actions that cause BMI undue expense.