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
Top 10 Legal Considerations for Esports Players and Teams
In recent years, the world of esports has transformed from a niche subculture of competitive video game players into a global phenomenon of international tournaments, attracting millions of fans and generating substantial revenue, on par with more traditional, professional sports leagues. As the esports industry continues to grow, so do the legal considerations that players and team organizers must navigate. From player contracts to intellectual property protection, understanding the key legal aspects underpinning this emerging industry is essential for a successful journey into the esports gaming world.
(Source: Arnall Golden Gregory LLP, July 18, 2024)
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Industry News
Pitfalls Around Florida’s Talent Agencies Act
Under Florida law, the term “talent agency” is defined as “any person who, for compensation, engages in the occupation or business of procuring or attempting to procure engagements for an artist.” Generally speaking, anyone who can be classified as a “talent agency” under the foregoing definition is required to obtain a license from the Florida Department of Business and Professional Regulation. Pursuant to Section 468.403(1), Fla. Stat., “a person may not own, operate, solicit business, or otherwise engage in or carry on the occupation of a talent agency in this state unless the person first procures a license for the talent agency from the department.” There are a few exceptions to this licensing requirement, in that “a license is not required for a person who acts as an agent for herself or himself, a family member, or exclusively for one artist.” Despite this, “a person may not advertise or otherwise hold herself or himself out as a ‘talent agency’ or ‘talent agent’ unless the person is licensed under this section as a talent agency.”
(Source: Law.com, July 16, 2024)
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Verizon Hit With $2.6B Anti-Piracy Lawsuit From Major Record Labels
A collection of major record labels have sued Verizon for turning a blind eye to users who illegally download content, a significant effort to curb piracy against one of the leading gatekeepers of the internet. In a lawsuit filed on Friday in New York district court, the three major music conglomerates — Universal, Sony and Warner — joined by a host of other publishers, say they’ve notified Verizon of hundreds of thousands of repeat infringers but that company refuses to expel them. They seek roughly $2.6 billion and a court order that the company willfully infringed upon their copyrights.
(Source: The Hollywood Reporter, July 15, 2024)
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Beastie Boys Sue Chili’s Parent Company for Copyright Infringement
Brinker International tried to ill without license, according to a new lawsuit filed by iconic rap group The Beastie Boys. The Beastie Boys are suing the parent company of Chili's in a case that accuses the chain restaurant of running an advertisement that used the hip-hop trio's smash hit "Sabotage" without permission. In a federal case filed in New York, the acclaimed rap-rock group, who rose to fame in the '80s with the release of their debut album "Licensed to Ill," allege Brinker International created a Chili's ad that used significant portions of "Sabotage" and ripped off the song's music video.
(Source: CBS News, July 12, 2024)
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Live Nation Antitrust Lawsuit Will Do Nothing to Lower Ticket Prices: Guest Post
Breaking up Live Nation Entertainment will do absolutely nothing to lower ticket prices for fans. I say this as a music business educator, analyst and passionate consumer of live music. I do not advise Live Nation, and I receive nothing of value for expressing my opinion in forums like this guest column. Fans love to hate Ticketmaster, but their anger is misplaced. Artists and their teams set ticket prices and venues set fees – not Ticketmaster. The company, to its credit, has for decades quietly absorbed the ire of fans while implementing artists’ and venues’ pricing strategy at scale and speed. It receives an estimated 5 – 7% of the ticket price for its services.
(Source: Variety, July 11 2024)
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‘Neighbouring Rights Are Becoming a Significant and Vital Revenue Stream for Recording Rightsholders.’
Sound recording performance rights, also known as neighbouring rights income, reached $2.7 billion in 2023, representing 9.5% of the global recorded music market. Back at the turn of the century that total was just $0.6 billion, or 2.7%. It’s a strong growth rate, but one with a huge amount of further potential still baked into it.
(Source: Music Business Worldwide, July 10, 2024)
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‘Landmark Victory’: Copyright Office Finalizes Rule Change on Streaming Royalties
The U.S. Copyright Office has finalized a new rule aimed at ensuring that songwriters who invoke termination rights to regain control of their music will actually start getting paid streaming royalties after they do so. The provision, issued on Tuesday, will overturn what the Copyright Office called an “erroneous” earlier policy by the Mechanical Licensing Collective, which critics feared would have kept sending money from streamers like Spotify to former owners in perpetuity, long after a songwriter took back ownership.
(Source: Billboard, July 9, 2024) [Subscription may be required]
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How This Law Is Protecting Child Influencers in Illinois
A law protecting child influencers in Illinois has officially gone into effect. The state passed a bill into law in August 2023, after it was introduced by Democratic Sen. David Koehler. It has now been implemented since July 1, 2024, as a part of Illinois' existing Child Labor Law, stating that children under the age of 16 "perform[ing] in an artistic or creative service" are entitled to compensation from their parent or guardians' digital content.
(Source: Mashable, July 8, 2024)
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Gibson’s Guitar Shape Counterfeiting Win Undone by 5th Cir.
Gibson Inc. will have to retry its trademark claims against the makers of Dean Guitars because a court wrongly excluded pre-1992 evidence “critical” to the defense that the marks are generic, the Fifth Circuit ruled Monday. Precedent required the district court to weigh the relevance of old third-party use like that offered by Armadillo Distribution Enterprises Inc., not categorically exclude it, the US Court of Appeals for the Fifth Circuit said. That error undercut Armadillo’s “primary defense"—that consumers had long perceived the V- and Z-shapes of guitars as generic and not indicative of who made them.
(Source: Bloomberg, July 8, 2024) [Subscription may be required]
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David Ellison Set as Chairman-CEO, Jeff Shell as President of Paramount; Shari Redstone to Sell Family Empire to Skydance Media in $8 Billion Deal
The sides have made it official: David Ellison’s Skydance Media has set a deal with Paramount Global that calls for Ellison to become chairman and CEO of an enhanced Paramount while former NBCUniversal CEO Jeff Shell will take operational reins as president.
(Source: Variety, July 7, 2024)
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German Government Pledges 30 Percent Tax Rebate in 2025 Budget
The German government has pledged to add a plan for a new tax incentive program to its 2025 budget aimed at attracting more international productions to shoot in the country. The deal, announced Friday, would provide a rebate of up to 30 percent on German production costs for films and high-end series, with funding coming from the federal government and the states. Pending approval from the cabinet, parliament and state governments, the new scheme could go into effect as early as Jan. 1, 2025.
(Source: The Hollywood Reporter, July 5, 2024)
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YouTube’s Updated Eraser Tool Removes Copyrighted Music Without Impacting Other Audio
On July 4, YouTube released an updated eraser tool for creators so they can easily remove any copyrighted music from their videos without affecting any other audio such as dialog or sound effects. YouTube chief Neal Mohan posted about the tool on X and said, “Good news, creators: our updated Erase Song tool helps you easily remove copyright-claimed music from your video (while leaving the rest of your audio intact).”
(Source: TechCrunch, July 5, 2024)
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Cardi B Accused of Copyright Infringement Over ‘Enough (Miami)’
Cardi B has been accused of copyright infringement on her US Top 10 hit Enough (Miami). According to the lawsuit, Joshua Fraustro and Miguel Aguilar created their own song, Greasy Frybread in 2021. The track was released by the label Tattoo Muzik Group Studios on November 9, 2021. They claim that “this song has gained significant recognition,” and note that it was used as a promo for the hit FX series “Reservation Dogs.”
(Source: Music Business Worldwide, July 4, 2024)
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Australia Juices Hollywood Blockbuster Movie Incentives
Australia has juiced its tax incentives for foreign, mostly Hollywood movies and TV series that shoot locally. The federal government has passed legislation to boost the 16.5 percent location to 30 percent. The near doubling of the location offset will apply to local Australian movies but with a catch. Producers must have budgets of at least AUS$20 million (US$13.3 million) for production, or AUS$1.5 million (US$1 million) per hour for a TV series.
(Source: The Hollywood Reporter, July 4, 2024)
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Basketball Players Sue NCAA Over NIL Use in March Madness Promos
Sixteen former men's college basketball players, including Kansas stars Mario Chalmers and Sherron Collins, UConn guard Ryan Boatright and Arizona guard Jason Terry, have sued the NCAA and multiple conferences for the unauthorized use of their name, image and likeness in March Madness highlights.
(Source: ESPN, July 2, 2024)
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Inside the IATSE Basic Agreement Deal: New Streaming Residuals, More Safety Officers and AI Guardrails
In a summary of the three-year provisional agreement released over the weekend, the union detailed the wage increases, AI guardrails, safety provisions and health and pension funding mechanisms that it negotiated with the Alliance of Motion Picture and Television Producers. If ratified by the union’s membership, the new deal would affect some 50,000 costume designers, cinematographers, editors, grips and art directors, among many other crew members, who belong to 13 West Coast Locals. The ratification vote will take place between July 14 and 17, with results expected to be released on July 18.
(Source: The Hollywood Reporter, July 1, 2024)
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Six Flags and Knott’s Berry Farm Owner Cedar Fair Complete Merger, Creating Theme Park Behemoth
Six Flags and Cedar Fair have completed their $8 billion merger, creating a live experiences behemoth that owns 27 theme parks, 15 water parks, 9 hotels and resorts, as well as safaris, marinas and other properties across the U.S., Canada and Mexico.
(Source: The Hollywood Reporter, July 1, 2024)
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Record Labels Have Tried to Get a Radio Performance Right for Decades. Is Anything Different This Time?
Another piece of legislation in Washington, D.C., is making its way through Congress that would pay artists and record labels for plays at terrestrial radio. If that sentence sounds familiar, that’s because the issue has long been present on Capitol Hill without managing to win a presidential signature.
(Source: Billboard, June 28, 2024) [Subscription may be required]
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OpenAI Sued by Center for Investigative Reporting as Media Takes Diverging Paths on Tech Giant
OpenAI and Microsoft have been sued by another news organization for using articles to train its artificial intelligence systems, this time by the Center for Investigative Reporting. In a lawsuit filed in New York district court, the nonprofit newsroom, which produces Mother Jones and Reveal, alleges the Sam Altman-led firm “copied, used, abridged, and displayed” the Center for Investigative Reporting’s content without consent or compensation, in violation of copyright laws. It argues that users of AI tools from OpenAI and Microsoft can obtain variants of copyright-protected material, undercutting the market for articles from the organization.
(Source: The Hollywood Reporter, June 27, 2024)
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Experts Diverge on the Strength of RIAA's AI Copyright Infringement Suit
The Recording Industry Association of America (RIAA), which represents UMG, Sony, and Capitol Records, among other record label heavyweights, sued two generative AI startups, Udio and Suno ,on Monday, alleging copyright infringement. These suits not only stoke the fire under copyright litigation that has thrived as a result of the generative AI boom, but also add a new element to the landscape of intellectual property claims that plaintiffs—from artists to newspaper publishers to writers—have brought against AI companies. It’s helpful to contextualize AI copyright suits as centering on two ends of the AI black box. On the left side is the input, and on the right side, the output. While most claims alleging infringement touch on both edges of the equation, there is usually a balancing act between the two.
(Source: Law.com, June 27, 2024)
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SiriusXM Facing Lawsuit Over ‘Deceptive’ Royalty Fee That Allegedly Earned Billions
SiriusXM is facing a class action lawsuit that claims the company has been earning billions in revenue by tacking a deceptive “royalty fee” onto consumers’ bills. In a complaint filed last week in federal court, attorneys for four aggrieved subscribers claim that SiriusXM adds a “U.S. Music Royalty Fee” — allegedly 21.4% of the actual advertised price — onto the normal price that users pay for satellite radio plans. “This action challenges a deceptive pricing scheme whereby SiriusXM falsely advertises its music plans at lower prices than it actually charges,” attorneys for the users write. “SiriusXM intentionally does not disclose the fee to its subscribers. SiriusXM even goes so far as to not mention the words ‘U.S. Music Royalty Fee’ in any of its advertising, including in the fine print.”
(Source: Billboard, June 27, 2024) [Subscription may be required]
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In the Live Nation Antitrust Case, Who Will Win & Who Will Lose?
Given the glacial pace at which federal antitrust litigation moves, the U.S. Department of Justice’s historic lawsuit against Live Nation and its wholly owned subsidiary Ticketmaster is expected to take years to wind its way through the legal system whether it’s fully adjudicated or the live-event Goliath agrees to make changes to its business, which the government often terms “behavioral remedies.” And though it’s clearly too early to predict how the case will play out, legal expert and antitrust attorney Lawrence J. White from New York University’s Stern School of Business says the potential winners and losers have already been largely pre-determined based on hints found in the 128-page complaint that the DOJ filed May 23 in U.S. District Court in the Southern District of New York.
(Source: Billboard, June 26, 2024) [Subscription may be required]
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NBC Brings A.I. Al Michaels to Peacock for Customized Paris Olympics Recaps
NBC is bringing Al Michaels back for the 2024 Paris Olympics. Or rather, NBC is bringing a version of Al Michaels generated by artificial intelligence to this year’s Games. The company says that it is turning to generative AI software to re-create the iconic sportscaster’s voice, which will provide customized Olympic recaps for Peacock subscribers during the Olympics.
(Source: The Hollywood Reporter, June 26, 2024)
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IATSE Reaches Tentative Agreement on Basic Agreement With Studios and Streamers
Leaders of the 13 West Coast Locals, who collectively represent around 50,000 crewmembers, disclosed the news to members on Tuesday night. IATSE and the Alliance of Motion Picture and Television Producers, which represents management in collective bargaining, later jointly announced the news. The deal for a successor contract to the so-called Basic Agreement is still subject to a ratification vote, which has not yet been scheduled, before it can take effect.
(Source: The Hollywood Reporter, June 25, 2024)
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Chicago Cubs Claim Rooftop Views of Wrigley Field Violate Property, Intellectual Rights
Counsel with Kirkland & Ellis filed a lawsuit last week on behalf of the Chicago Cubs Baseball Club, alleging a former licensee continued to sell tickets for rooftop views of its baseball games and other events at Wrigley Field in violation of the Cubs’ property rights and intellectual property rights.
(Source: Law.com, June 25, 2024)
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Former Band Member Entitled to Featured Artist Royalties: First Circuit
On June 18, 2024, in Ithier v. Aponte-Cruz, the US Court of Appeals for the First Circuit held that a former band member was a featured artist under Section 114 of the Copyright Act and entitled to statutory royalties. Carlos Juan Aponte-Cruz was a member of the band El Gran Combo from 1973 to 2004 and was a lead vocalist in over 200 of the band's sound recordings. Rafael Ithier is the founder of the band and the sole owner of EGC Corp., the company that owns the band. Ithier selected and hired the various musicians that performed in the band.
(Source: Thomson Reuters, June 24, 2024)
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As AI Marches on Music Industry, Record Labels Counter With $350M Lawsuits in Assertive Move
In lawsuits filed in federal courts in New York and Massachusetts, the labels — led by Universal Music Group, Sony Music Entertainment and Warner Music — accuse Suno AI and Uncharted Labs Inc., the developer of Udio AI, of illegally powering their AI systems on massive troves of copyrighted recordings. They seek injunctions that could force the companies to cease further infringement, which may include the destruction of models taught on their intellectual property, and damages of nearly $350 million. Suno chief executive Mikey Shulman said in a statement that the company’s technology is “transformative” and is “designed to generate completely new outputs, not to memorize and regurgitate pre-existing content.” He added, “That is why we don’t allow user prompts that reference specific artists. We would have been happy to explain this to the corporate record labels that filed this lawsuit (and in fact, we tried to do so), but instead of entertaining a good faith discussion, they’ve reverted to their old lawyer-led playbook.”
(Source: The Hollywood Reporter, June 24, 2024)
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Attorney General Miyares Announces $1.3 Million Settlement With Washington Commanders for Unreturned Ticket Deposits
Virginia Attorney General Jason Miyares announced an agreement with Pro-Football LLC, the current owner of the Washington Commanders, ensuring the return of hundreds of thousands of dollars to consumers impacted by the team’s failure to return ticket deposits to season ticket holders. On April 25, 2022, the Attorney General opened an investigation into the Washington Commanders’ practice of retaining security deposits. As a result of that investigation, over $600,000 in deposits have been returned to approximately 475 season ticket holders to date. Additionally, the team has agreed to pay $700,000 in penalties and costs to resolve this investigation.
(Source: Attorney General of Virginia, June 18, 2024)
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Be who you are and say what you feel because those who mind don't matter and those who matter don't mind.
—
Dr. Seuss
