February 27, 2025

The Pitch - February 2025

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The Pitch newsletter is a monthly update of legal issues and news affecting or related to the music, film and television, fine arts, media, professional athletics, eSports, and gaming industries. The Pitch features a diverse cross-section of published articles, compelling news and stories, and original content curated and/or created by Arnall Golden Gregory LLP’s Entertainment & Sports industry team.

“Art enables us to find ourselves and lose ourselves at the same time.” – Thomas Merton

AGG News

Hollywood Accounting: Why Every Creator Needs an Audit Clause

The term “Hollywood accounting” describes the stigmatized financial practices employed not only by film studios but also other powerful entities that pay creators, whether they are streaming platforms, recording labels, or publishing companies. The sometimes-complex accounting calculations, which can obscure how profits are calculated and distributed, frequently leave creators feeling shortchanged — or worse, walking away empty-handed despite others profiting off their work. A couple notorious examples that may have involved some “Hollywood accounting” include the Lord of the Rings lawsuits, involving Peter Jackson and J.R.R. Tolkien’s estate, and the Beatles’ decades of royalty battles with EMI. Such accounting practices have pushed many writers, like fantasy author Brandon Sanderson, to create their own publishing companies (an option that may not be realistic for most start-up and mid-level authors).

(Source: Arnall Golden Gregory LLP, February 19, 2025)

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Industry News

Georgia, Alabama NIL Bills Could Face Legal Challenges

Bills in Georgia and Alabama to exempt college athlete NIL income from state taxes could save athletes a healthy amount of money, but could also face legal challenges by other college students whose income would remain subject to state taxes. Georgia’s SB71 and Alabama’s HB240 straightforwardly call for compensation earned by college athletes to not be subject to state income taxes. Georgia imposes a flat 5.39% income tax rate while Alabama’s income tax ranges from 2% to 5%, with income over $3,000 ($6,000 for married couples) facing the highest rate.

(Source: Sportico, February 16, 2025)

The four-year battle for ownership of the Minnesota Timberwolves and Minnesota Lynx may finally be reaching a conclusion. But what exactly does Monday’s ruling mean? What happens next? Why is Tom Brady relevant here? And will the NBA ever do this again? Here are six takeaways from the latest development in one of the longer and stranger franchise sales in modern sports history.

(Source: Sportico, February 12, 2025)

Copyright law bars a former competitor of Thomson Reuters from using the company’s content to create an artificial intelligence-based legal platform, a court has ruled in a decision that could lay the foundation for similar rulings over the legality of using copyrighted works to train AI systems. U.S. District Judge Stephanos Bibas on Feb 11 rejected arguments from Ross Intelligence that it’s protected by the “fair use” exception to copyright protections. The court’s ruling on the novel issue will likely be cited by creators suing tech companies across Hollywood, though the case doesn’t involve the creation of new content created by AI systems.

(Source: The Hollywood Reporter, February 11, 2025)

Music streamer Spotify and Warner Music Group (WMG) unveiled a new, multiyear agreement on Thursday that covers both recorded music and music publishing. Through the deal, which follows a similar agreement between Spotify and Universal Music Group, the companies said they would “strengthen their joint commitment to artists, songwriters and fans, as well as the growth of the music ecosystem through innovative collaboration.”

(Source: The Hollywood Reporter, February 6, 2025)

Netflix will not release Ezra Edelman’s Prince documentary following a new deal with the late singer’s estate, the two parties announced Thursday. “The Prince Estate and Netflix have come to a mutual agreement that will allow the estate to develop and produce a new documentary featuring exclusive content from Prince’s archive,” a statement from both parties’ social media read. “As a result, the Netflix documentary will not be released.” A New York Times report last September alleged that Edelman’s project would accuse Prince of physical and emotional abuse. The documentary was reportedly nine hours, and featured interviews with dozens of Prince’s former business partners, lovers, friends and associates. Edelman is best known for O.J.: Made in America.

(Source: The Hollywood Reporter, February 6, 2025)

In an unexpected show of SEC rivals working together, a Georgia bill put forward by an LSU grad, at the advice of former Alabama coach Nick Saban, seeks to make college NIL money exempt from the state’s income tax. The bill’s main author, Georgia state Sen. Brandon Beach, said in a phone call the idea spawned from a dinner he had with Saban and spouses two weeks before the start of this past college football season, at the home of a mutual friend in Lake Burton, Ga.

(Source: Sportico, February 5, 2025)

The estate of legendary rapper Notorious B.I.G. is suing Target, Home Depot and others over allegations that they sold unauthorized canvas prints of the famed “King of New York” photo that was snapped just days before his death. In a lawsuit filed Feb 11 in federal court, Notorious BIG LLC claims the retailers sold prints illegally created by iCanvas – a small firm that the estate says showed a “complete disregard for celebrities’ personality rights, lack of respect for artists’ efforts, and disdain for intellectual property law.”

(Source: Billboard, February 5, 2025) [Subscription required]

The National Music Publishers’ Association (NMPA) announced on Tuesday (Feb. 4) that it would issue takedown notices to Spotify for 2,500 podcast episodes on the platform that allegedly contain “unlicensed musical works” from 19 NMPA member publishers. “Spotify has thousands of unlicensed songs in its podcasts, which it has done nothing to remedy. This takedown action comes as no surprise, we have warned of this issue for some time,” says NMPA president and CEO David Israelite of the takedown notices. According to the NMPA, this is just the start of the takedown requests, and the demands will continue to roll out. “This is a weak reaction to the judge dismissing the MLC’s lawsuit. Last summer, the NMPA claimed that there were unlicensed works in podcasts on Spotify,” a representative for Spotify says in a statement to Billboard. “The fact that the NMPA waited months, despite multiple written requests by Spotify for details, which they never bothered to answer, to report these episodes only further emphasizes that this is a press stunt. Platforms like Spotify, which are home to millions of pieces of UGC content, regularly receive takedown requests, and, as always, we will act promptly and, where appropriate, remove the episodes in question.”

(Source: Billboard, February 4, 2025) [Subscription required]

Nicholas Celozzi, a co-writer and producer on the Barry Levinson JFK flick Assassination, has filed a lawsuit against the film’s financier and production outfit 308 US. Originally filed by Celozzi in a Los Angeles County court in November, the suit will go before a judge in April who will decide whether the legal action can proceed. Celozzi, an LA-based producer, accuses 308 of multiple contractual breaches. The company contests those claims and has filed a motion to dismiss and has provided a comment below.

(Source: Deadline Hollywood, February 4, 2025)

The “Fix The Tix” coalition, a collective of over 30 live music and event industry organizations united to advocate for comprehensive ticketing reforms in the United States, has issued a new call to key congressional leadership, urging support for changes to the Transparency In Charges for Key Events Ticketing (TICKET) Act.

(Source: Celebrity Access, February 4, 2025)

Sony is ramping up its dispute with CBS over the syndicated game shows Jeopardy! and Wheel of Fortune. In a letter sent to CBS on Feb 3, Sony Pictures Television says it will take over distribution of the two shows beginning Feb. 10 — which would mark an end to a more than 40-year agreement between the two companies that has seen CBS’ syndication arm handle distribution. Sony is also seeking to file an amended complaint in its October 2024 lawsuit against CBS that alleges the latter has breached its contract in the United States and entered into unauthorized syndication deals for Jeopardy! and Wheel of Fortune in other countries.

(Source: The Hollywood Reporter, February 3, 2025)

The choice between New York and Toronto provides the Blue Jays with an unusual tax advantage: Alonso would save on taxes by choosing to sign in Canada with the Blue Jays rather than remaining in the Big Apple. The Mets and the New York Yankees, along with other pro teams in New York, are usually among the most taxing options for a free agent. New York’s highest level of income tax is 10.9%, the third highest in the country after California (13.3%) and Hawaii (11%). New York City only taxes residents. Those taxes are in addition to federal income taxes, where the highest rate is 37% but is set to climb to 39.6% beginning in 2026 unless President Donald Trump and Congress extend provisions of the Tax Cuts and Jobs Act of 2017 or pass another tax law.

(Source: Sportico, February 1, 2025)

Bruno Mars fans have been hit hard by ticket scalpers, with resale prices soaring to thousands of dollars. Now the state of Hawaii bans ticket scalping via new legislation that bans re-sale markups, stop bots and protect consumers.

(Source: Hybebot, January 31, 2025)

Louisiana federal judge has finalized an unusual legal decision that says American copyright termination rules apply not just stateside but also across the globe, unswayed by warnings that it will cause “destabilization of long-settled business practices” in the music industry. Ruling on a dispute over the 1963 rock classic “Double Shot (Of My Baby’s Love),” Judge Shelly Dick said Thursday that songwriter Cyril Vetter could win back full copyright ownership to the track from publisher Resnik Music Group via termination — an important federal provision that allows artists to take back their rights decades after they sold them away.

(Source: Billboard, January 31, 2025) [Subscription required]

Near the height of animosity in the writers’ strike in 2023, the Alliance of Motion Picture and Television Producers outlined an offer that captured its members’ anxieties in the adoption of AI tools in the production pipeline. In what it hoped would be perceived as a concession, it proposed that scribes’ compensation and rights wouldn’t be undercut if any part of a script is based on AI-generated material. The Writers Guild of America balked at the offer. It knew it had some leverage as far as negotiating points involving AI. That’s because works solely created by the tech aren’t copyrightable. To be granted protection, a human needs to rewrite any AI-produced script. And by keeping AI on the table, the guild figured that the studios were looking to capitalize on the intellectual property rights around works created by the tools. “If a human touches material created by generative AI, then the typical copyright protections will kick in,” a source close to the AMPTP told The Hollywood Reporter at the time.

(Source: The Hollywood Reporter, January 31, 2025)

It was a key win of Hollywood’s 2023 double strikes: a bonus that promised to allow workers to share in some of the spoils of successful streaming series and movies. After a grueling cumulative six-month work stoppage and talking points about entertainment workers falling behind, the Writers Guild and SAG-AFTRA — as well as, retroactively, the Directors Guild — wrote additional residuals beyond existing payments into their deals with media companies for top-rated projects. For WGA members, the new bonus structure, which took effect on Jan. 1, can range from $9,000 to $16,400 for a TV episode or $40,500 for a feature with a budget of more than $30 million, according to Hollywood payroll services firm Wrapbook. “We opened a new revenue stream,” said Fran Drescher of her union’s provision in November 2023. “What mattered was that we got into another pocket.”

(Source: The Hollywood Reporter, January 30, 2025)

Spotify won a ruling Wednesday dismissing a lawsuit from the Mechanical Licensing Collective that accused the streamer of unfairly slashing royalty rates, with a federal judge ruling that Spotify’s move was supported by “unambiguous” regulations. The MLC sued last year, claiming Spotify had “unilaterally and unlawfully” chosen to cut its music royalty payments nearly in half through bookmaking trickery – namely, by claiming that the addition of audiobooks to the platform entitled the company to pay a lower “bundled” rate. But in her decision on Jan. 29, Judge Analisa Torres said that federal royalty rate rules clearly allowed Spotify to legally claim the lower rate, rejecting MLC’s argument that the company was not actually offering a “bundle” of services.

(Source: Billboard, January 29, 2025) [Subscription required]

The fact is not a lot has been going on lately publicly in the legal duels between CAA and the agency’s ex-staffers over at Range Media Partners over equity, competition and the shifting line of what may or may not constitute being an agent, until Monday – when all Hell broke loose. First of all, with a March arbitration hearing on the books, the Bryan Lourd-run CAA scored a big victory at an early morning session in Santa Monica on January 27 with LA Superior Court Judge Mark A. Young denying the David Bugliari, Peter Micelli and Jack Whigham created Range’s request to stay the litigation and slip out of giving testimony and producing documentation in the ongoing behind closed doors mediation.

(Source: Deadline Hollywood, January 29, 2025)

As part of the new deal, Prime Video will secure an exclusive window after Starz’s earlier first-run window. The agreement will kick off with Lionsgate’s 2026 theatrical release slate, a package of films from the studio’s 2025 slate and a commitment to Prime Video for licensing library movies and TV. The major streamer will combine the Lionsgate movie and TV titles with those from Amazon MGM Studios and its other Hollywood partners. As part of the deal unveiled Wednesday, Prime Video will land Lionsgate movie titles like the third installment of the Now You See Me franchise and the next installment of the Hunger Games franchise, The Hunger Games: Sunrise on the Reaping.

(Source: The Hollywood Reporter, January 29, 2025)

Spotify and Universal Music Group announced a new multiyear deal on Sunday, establishing a direct license between the streamer and music label in the U.S. and several other countries. The agreement will be focused on “growth, innovation and the advancement of artists’ and songwriters’ success,” a press release said. The release also noted that artists, songwriters and listeners will benefit from “new and evolving” offers to come from the deal, including “new paid subscription tiers, bundling of music and non-music content and a richer audio and visual content catalog.”

(Source: The Hollywood Reporter, January 26, 2025)

One factor in whether U.S. District Judge Claudia Wilken grants final approval to the NCAA’s proposed settlement to resolve the House, Carter and Hubbard antitrust litigations is the extent to which athletes impacted by the settlement raise persuasive objections. On Jan. 24, Wilken received objections from Stanford University football player David Kasemervisz and Temple University gymnast Emma Reathaford, respectively. Both offered detailed rebukes, and both wish to raise their arguments when Wilken holds a fairness hearing on April 7. During that hearing, Wilken will assess whether to grant final approval. She’ll apply Federal Rule of Civil Procedure 23 to and assess if the settlement is “fair, reasonable and adequate” to class members.

(Source: Sportico, January 26, 2025)

One of YouTube TV’s most underrated features for sports fans has seen “a big surge” in popularity during this year’s NFL playoffs. Fans are increasingly turning on the service’s “decreased” broadcast delay option, YouTube VP of product management Christian Oestlien explained during a video interview. The setting remains opt-in for TV viewers, but posts on X highlighting the offering have received millions of views on each weekend of the 2025 NFL postseason so far.

(Source: Sportico, January 26, 2025)

The Internal Revenue Service may know a lot more about your side hustle this tax season. And the agency is cracking down on those who fail to report the added income. Anyone who earned more than $5,000 in 2024 selling tickets, musical instruments or other goods and services online should expect to get a 1099-K tax form this month. Online platforms such as StubHub, Etsy and eBay previously only had to send these forms to users who earned more than $20,000 in most cases.

(Source: The Wall Street Journal, January 21, 2025) [Subscription required]

At least half a dozen distributors and record labels are frustrated with the streaming service Napster due to late royalty payments, executives tell Billboard. In some cases, rights holders say Napster is a few months behind schedule; in others, the lag on payments is well over a year. Napster, despite its history as a pirate-disruptor to the recorded music business around the turn of the century, has long operated as a licensed streaming service, albeit a small one. But “for years, they have cited fundraising struggles as an excuse for delayed royalty payments,” according to one executive at a distributor who spoke on the condition of anonymity.

(Source: Billboard, January 21, 2025) [Subscription required]

The New York Jets and the National Football League on January 21 settled a federal copyright infringement suit brought by a former Jets employee over a logo he said he designed decades ago but was used without his permission or compensation. Jim Pons, the Jets' former film and video director, sued the Jets and the NFL twice last year, first in July, then in November after dropping the original suit. Pons claimed that the Jets used his design on game helmets and other material from 1978 to 1997 and that the team and the NFL registered the trademark on the design in 2022 to resume using it, again without his permission or payment. The dismissal order by U.S. District Judge Jessica G.L. Clarke said that Pons' claims have been "settled in principle" and the suit dismissed, pending submission of the official settlement in 30 days.

(Source: Law360, January 21, 2025) [Subscription required]

Warner Bros. Discovery‘s Chris Brown: A History of Violence has sparked a defamation lawsuit from the singer, who says the documentary features false sexual assault allegations against him. In a lawsuit filed on January 21 in Los Angeles Superior Court, Brown alleges the documentary’s producers knowingly included discredited claims of sexual assault and evidence tampering from an unreliable accuser. He seeks at least $500 million, a portion of which he says will be donated to survivors of sexual abuse.

(Source: The Hollywood Reporter, January 21, 2025)

As is the case with most Netflix earnings reports, the question for the company on Tuesday isn’t whether the number of subscribers will rise – it’s about just how high the number can go. Most Wall Street analysts expect a marked surge in the fourth quarter, which ended Dec. 31, driven by the Jake Paul-Mike Tyson fight, two NFL games and series premieres like Squid Game‘s second season. The report by Netflix, coming on the first full day of President Donald Trump’s second term, will kick off a five-week period of fresh media and tech financial results. The numbers and executive comments, a burst after the annual holiday lull, will offer the first signals about the trajectory of 2025.

(Source: Deadline Hollywood, January 20, 2025)

The Department of Education’s Office for Civil Rights (OCR) has issued guidance regarding college athlete name, image and likeness, putting the onus on schools to ensure their male and female athletes receive proportionate NIL opportunities and resources—regardless of whether the funding comes from external sources. In a nine-page “fact sheet” released Thursday, OCR clarified that, under Title IX, NIL money paid to college athletes should be held to the same gender-equity standards as athletic scholarships. Specifically, it stated that the amounts paid to athletes through NIL deals should be considered part of a school’s athletic financial assistance, just as grants-in-aid and cost-of-attendance funds are.

(Source: Sportico, January 16, 2025)

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