## Facts

- Broadcast Music, Inc. (BMI) is a performing rights organization that licenses public performance rights in musical compositions for its affiliates.
- Weigel Broadcasting Co. operated two local commercial television stations: WCIU-TV (Chicago) and WDJT-TV (Milwaukee).
- The parties failed to agree on renewal terms for BMI blanket licenses after BMI sought increased fees.
- Weigel continued publicly performing BMI-repertory music while disputing BMI’s proposed rates.
- Under Article XIV of the BMI antitrust consent decree, BMI petitioned the Southern District of New York to set reasonable license terms and fees.
- BMI sought court-set fees for April 1, 1999–December 31, 2004, and interim fees beginning January 1, 2005 until agreement or further order.

## Issues

1. What license terms and fees are “reasonable” under Article XIV of the BMI Consent Decree for BMI blanket licenses covering Weigel’s two stations for April 1, 1999–December 31, 2004, and on an interim basis thereafter?
2. To what extent should the court rely on BMI’s existing license agreements with comparable local commercial stations as benchmarks, and what adjustments are required for Weigel’s stations?
3. Whether Weigel’s asserted financial and competitive conditions justify materially lower rates than benchmark-based fees.

## Decision

- The court granted BMI’s petition in substantial part and set specific blanket-license terms and fees for Weigel’s stations for 1999–2004.
- The court adopted a benchmark approach grounded in BMI licenses with similarly situated local commercial stations, with adjustments for station characteristics such as revenue and market profile.
- The court rejected Weigel’s request for a substantially lower rate structure based chiefly on station-specific hardship arguments.
- The court ordered interim fees effective January 1, 2005, to govern until the parties reached agreement or the court issued a further order.

## Legal Principles

- In a BMI consent-decree rate-court proceeding, the court sets “reasonable” fees by approximating the outcome of arm’s-length bargaining, rather than imposing punitive or preferential terms.
- The most probative evidence of reasonableness is often negotiated benchmark licenses with comparable users, adjusted to reflect relevant differences in station size, revenues, and market conditions.
- A licensee’s claimed financial hardship does not, by itself, control the rate; reasonableness is primarily an objective, comparative inquiry.
- The breadth and administrative efficiency of a blanket license are legitimate components of its value and may support fees consistent with prevailing industry practice.
- The rate court may impose interim fees to maintain ongoing access to the repertory pending final agreement or further judicial determination.

## Conclusion

The court, acting under the BMI Consent Decree, set benchmark-based blanket-license fees and terms for Weigel’s two local television stations and imposed interim fees going forward, emphasizing an objective, market-comparables method over licensee-specific hardship claims.


Broadcast Music, Inc. v. Weigel Broad. Co., 488 F. Supp. 2d 411 (S.D.N.Y. 2007)