## Facts

- A class of roughly 750 local television stations sued ASCAP and BMI (and their affiliated composers/publishers) under § 1 of the Sherman Act, challenging blanket licenses for nondramatic public performance rights in musical works.
- ASCAP and BMI, as performing rights organizations, offered blanket licenses that allowed stations to perform any work in each organization’s repertory for a single fee, typically tied to station revenues, and included infringement indemnification.
- The stations used music across syndicated programs, movies, commercials, promotional spots, and local programming, including “inside music” created in production arrangements.
- The stations claimed they had no practical alternative to blanket licenses because per-program licenses imposed ongoing reporting burdens, direct licensing was impractical, and “source licensing” from producers/syndicators or advertisers was effectively unavailable.
- ASCAP and BMI maintained their rights were nonexclusive, that blanket licensing lowered transaction costs, and that per-program, direct, and source licensing were feasible alternatives.
- The district court found the blanket license system, as applied to local stations, an unreasonable restraint of trade and entered judgment for the stations.

## Issues

1. Whether ASCAP/BMI blanket licenses to local television stations constitute a “restraint of trade” under § 1 of the Sherman Act.
2. If so, whether the stations proved the restraint was unreasonable under the rule of reason.

## Decision

- The Second Circuit reversed the judgment for the stations.
- The court held the stations failed to prove the blanket license arrangements restrained trade because they did not show the absence of realistically available alternatives.
- Because a restraint was not proven on this record, the court did not proceed to full rule-of-reason balancing on unreasonableness.

## Legal Principles

- Under § 1 and rule-of-reason analysis, blanket licensing by a performing rights organization is not unlawful absent proof of substantial anticompetitive effects in the relevant market.
- A nonexclusive blanket license is less likely to restrain trade where alternative licensing paths remain available, including per-program licensing, direct licensing from rights holders, and source licensing through program suppliers.
- Plaintiffs must show they are practically compelled to purchase blanket licenses because alternatives are not realistically available; preference for the blanket license’s convenience or efficiency is insufficient.
- Administrative and record-keeping burdens associated with alternative licensing do not, without more, establish that alternatives are illusory.
- Assertions that direct or source licensing is unworkable require concrete evidence (such as documented attempts, market behavior, or reliable cost projections), not speculation.

## Conclusion

The Second Circuit held that local television stations did not carry their burden to show ASCAP and BMI blanket licenses restrained trade, because the record did not establish that per-program, direct, or source licensing were unrealistic alternatives; therefore, the challenged licensing practices were not shown to violate § 1 of the Sherman Act.


Buffalo Broad. Co. v. Am. Soc’y of Composers, Authors & Publishers, 744 F.2d 917 (2d Cir. 1984)