Antitrust Law Daily Wrap Up, ANTITRUST NEWS—BMI asks Supreme Court to intervene in concert royalty rate dispute, (Aug 27, 2026)

By Matthew Hersh, J.D.

A federal appellate court failed to give proper deference to the trial court’s findings, the royalty organization asserts.

The U.S. Court of Appeals for the Second Circuit departed from "an otherwise unanimous and appropriate approach” by applying de novo review to a district court’s determination of the royalty rates that concert promoters must pay to songwriters and music publishers, a new Supreme Court petition asserts. The petition, filed by performing rights organization Broadcast Music Inc., claims that the case presents “a clean vehicle” to resolve a circuit split and “presents a question of exceptional importance to millions of songwriters, composers, and publishers, as well as other parties litigating rate disputes” (Broadcast Music, Inc. v. North American Concert Promoters Association, No. 26-238 (U.S. Aug. 26, 2026)).

The rate dispute arises between two music performance heavyweights. On the one side is BMI. Anybody who wants to perform music publicly, whether live or recorded, must obtain a license from the owner of the underlying musical composition. Four organizations control the market for those licenses: BMI, ASCAP, the Society of European Stage Authors and Composers (SESAC), and Global Music Rights (GMR). Importantly, because BMI and ASCAP each control nearly half the market, the two entities have been operating under antitrust consent decrees since the 1940s. Those decrees are administered by a specialized “rate court” in the Southern District of New York.

On the other side of the dispute is the North American Concert Promoters Association, an association of large-scale concert promoters. Two companies, Live Nation Entertainment and AEG Presents, own or control approximately 75 percent of NACPA’s members and pay the lion’s share of NACPA’s license fees. The business of Live Nation and AEG includes not only concert promotion but also ticket servicing and venue ownership. Indeed, Live Nation and AEG own the ticket servicing companies Ticketmaster and AXS, respectively. Ticketmaster and AXS charge service fees on most concert tickets sold; the fees typically amount to about 20 percent of the face value of the ticket.

NACPA and the four professional rights organizations, including BMI, have traditionally worked collectively to negotiate licenses for live concert performances. (Because concert promoters can never be sure in advance exactly what songs will be played and who owns the rights to that song, NACPA and other concert promoters prefer to obtain licenses from all four rights organizations.) From 1998 through 2013, that license required NACPA to pay 0.30% of gross ticket revenues for large venues and 0.15% for smaller venues. But since then, the parties have not been able to agree on a rate—leaving it up to the rate court to determine how much NACPA should have to pay for performances in the years since.

District court proceedings. The rate court, after a five-week trial, imposed two different sets of rates for two different time periods. For the years 2014-2018, the court imposed a sliding scale of rates between 0.15% and 0.80% depending on the size of the venue. For the period 2018-2022, the court simply a flat rate of 0.50% of NACPA’s gross revenues during that time period. In reaching its determination, the rate court considered a wide range of benchmark agreements, including licenses between BMI and other performing rights organizations (ASCAP, SESAC, and GMR) and promoters or their representatives. Those benchmarks had rates ranging from 0.21% to 0.54%, with the ASCAP and older BMI agreements on the low end and the more recent SESAC and GMR agreements on the high end. Relying also on those benchmarks, the district court also expanded the prior definition of “gross revenues” to include not only the face value of concert tickets but also revenues from ticket fees, VIP packages and box suites, sponsorships, and certain secondary-market ticket sales.

Second Circuit. The court of appeals reversed and remanded. Critically, in reaching that conclusion, the court of appeals found that it was not obligated to give deference to all aspects of the district court’s determination of rates. To the extent that the district court made run-of-the-mill factual determinations such as the existence and content of other potential benchmark agreements and the like, those determinations would be reviewed for clear error. But to the extent that the rate court made decisions such as “the selection of benchmarks, the weighing of benchmarks, and the [definition of the] revenue base,” the court of appeals noted, those determinations were “questions of law” to be “reviewed de novo” on appeal.

Applying this de novo standard of review, the court of appeals found that the district court erred in several aspects. For one, the court of appeals concluded, the district court wrongly expanded the revenue base. Prior agreements between BMI and NACPA, the court of appeals noted, applied the royalty rate only to the face value of tickets sold. Moreover, the court of appeals emphasized, none of the domestic benchmark agreements the parties identified used anything other than the face value of tickets sold to measure the revenue base. “If the industry has settled on a particular definition of gross revenue,” the court of appeals noted, “the role of the district court will presumptively be confined to determining whether the percentage rate quoted by the PRO is reasonable, holding the revenue base definition and other license terms fixed.”

The court of appeals also found that the district court erred in applying the benchmark analysis that led it to adopt a rate of 0.5 percent. For one thing, the court of appeals noted, although the district court identified seven different ostensibly comparable rates reflected in the twelve benchmarks it considered, it chose a higher figure than it would have reached by simply averaging those rates. To arrive at a rate of 0.5 percent based on the benchmarks, the court of appeals noted, the district court “must have implicitly assigned greater weight to the benchmarks with higher implied rates.” If so, the court noted, “that was unreasonable.” The district court additionally erred, the court of appeals found, by treating agreements with independent promoters unaffiliated with NACPA as comparable benchmarks, even though NACPA had “more leverage than other promoters” in negotiations with rights organizations.

The petition. The Second Circuit erred by applying de novo review to the district court’s selection of benchmarks, BMI’s petition asserts. In so doing, the petition asserts, the Second Circuit “departed from an otherwise unanimous and appropriate approach” over whether fair-market-value determinations and their component parts are reviewed deferentially or under a stringent de novo standard. Three circuits, the D.C., Fourth, and Ninth, the petition asserts, hold that the benchmarks a district court uses in making a valuation determination “should be reviewed deferentially.” Six other circuits, the petition claims, have held that the final valuation decision in a fair-market value determination “is inherently factual, reviewed under the deferential clear-error standard.” But the Second Circuit “effectively split with those courts too,” the petition claims, “transforming almost every facet of its review of the district court’s ratesetting into a legal issue subject to plenary appellate scrutiny.”

The question presented “impacts the livelihood of millions of musical copyright holders and could affect litigants in numerous other types of rate disputes,” the petition claims, because the court of appeals’ standard of review “now controls all future review of royalty-rate decisions for BMI and ASCAP with respect to live concerts, television, radio, streaming platforms, and more.” That standard also creates “massive judicial inefficiencies by increasing the number of potential remands,” the petition emphasizes, and also could “infect the standard of review in a range of other contexts involving fair-market valuations.” Additionally, because the application of de novo review was “outcome-determinative,” the petition asserts, this case presents “a clean vehicle for resolving the question presented.”

Finally, the Second Circuit’s ruling was also “manifestly wrong” on the merits, the petition claims. The district court’s gross revenue-base determination, the petition asserts, “turned on testimony about changes in the music industry and practices already being undertaken by NACPA’s members.” Moreover, the district court’s benchmarking analysis “turned on dueling expert testimony and the careful examination of over a dozen licensing agreements and the context in which each was negotiated.” Rather than engage with this record, the petition contends, the Second Circuit instead “wielded a 2003 journal article on contracting principles and the concept of ‘surplus’” that had been cited by neither party in their briefs and was never introduced into the record.

The question presented in the petition is: Whether a district court’s fair-market-value determination and its component parts, such as the selection of benchmark agreements, should be reviewed de novo or for clear error.

The Case is No. 26-238.

Judge: NA.

Attorneys: Lisa S. Blatt (Williams & Connolly LLP) for Broadcast Music, Inc. Andrew Michael Gass (Latham & Watkins LLP) for North American Concert Promoters Association.

Companies: Broadcast Music, Inc.; North American Concert Promoters Association

News: Antitrust NewYorkNews