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
Bundle or Bungle in the [Streaming] Jungle: The Fight Over Mechanical Royalties
In April 2024, Spotify announced a price increase for its ad-free premium subscription plan. This is the second price increase in 10 months and will go into effect in the United States later this year. According to Spotify, the latest price increase is tied to the addition of audiobook offerings to the premium subscription plan. Although Spotify initially added select audiobooks to the premium service in October 2023 without any additional cost, the impending price increase coupled with the introduction of audiobook-only and music-only plans coincides with the strategic reclassification of the premium subscription plan as a “bundle.” This reclassification is significant because it directly impacts the mechanical royalty fees that Spotify is required to pay to rightsholders. Despite raising prices for subscribers — a perennial desire of songwriters and publishers — royalty payments are projected to plummet.
(Source: Arnall Golden Gregory LLP, June 20, 2024)
Read More >
A Guide to Understanding FTC’s Regulations for Endorsements and Testimonials in Influencer Advertising
Surprise, surprise, it turns out that the Federal Trade Commission (“FTC”) is serious about the misuse of endorsements and testimonials in advertising. In October 2021, the FTC sent out a Notice of Penalty Offenses to approximately 700 companies, warning them that certain acts or practices, based on FTC precedent in past litigated cases, violated the FTC Act and advertisers engaging in those practices could face substantial civil penalties. On June 29, 2023, the FTC updated its 2009 Guidelines on Endorsements and Testimonials. The next day, the FTC proposed a trade regulation rule covering the use of endorsements and testimonials. These actions, along with more than two dozen individual cases brought in the past decade, make clear that policing the use of testimonials is an FTC priority. It is imperative that companies relying on influencers to market their products stay informed and compliant with these regulations.
(Source: Arnall Golden Gregory LLP, June 20, 2024)
Read More >
Industry News
What Went Wrong: Inside Paramount’s Failed Merger Talks and the Battle to Salvage the Company
For Shari Redstone, it was nothing personal. But the longer the negotiations went on, the more Redstone fell out of love with the idea of marrying her family’s legacy to David Ellison’s Skydance Media. So on June 11, as board members of Paramount Global were about to hold a key meeting on the long-gestating deal to merge with Skydance, Redstone was out — even as those around her were still scrambling to get it done.
(Source: Variety, June 19, 2024)
Read More >
Court Says Tracy Anderson Method Is Not Copyrightable in Fitness Lawsuit
A federal court in California has handed Megan Roup a partial win in the latest round of a copyright-centric lawsuit being waged against her by rival fitness guru Tracy Anderson. In a recently-issued order, Judge Philip Gutierrez of the U.S. District Court for the Central District of California granted Roup’s motion for summary judgment on Anderson’s copyright infringement claim, finding that Anderson’s exercise routines amount to a “process, system, and/or methodology” that is “clearly” not protectable by copyright law. The court also sided with Anderson to an extent, allowing the breach of contract claim she filed against Roup to move forward. Focusing first to Tracy Anderson’s copyright infringement claim, Judge Gutierrez stated in his June 12 order that Anderson asserts that Roup and her competing choreography-based dance cardio workout studio, The Sculpt Society, (collectively, “Roup”) have infringed the copyrights that she has in her “TA Works” DVDs, protection that she has argued extend to the Tracy Anderson Method (“TA Method”) routines, which are captured in the footage of the DVDs.
(Source: The Fashion Law, June 18, 2024)
Read More >
House Committee Moves College Athlete Employment Bill Forward
A Congressional committee voted Thursday to move forward with a bill that would prevent college athletes from being deemed employees of their schools, conferences or the NCAA. The vote in the U.S. House Committee on Education and the Workforce represents the first tangible signs of progress the college sports industry has made in its years-long push for a federal law to help reshape college sports. It comes just weeks after the NCAA and its power conferences announced they have agreed to share significantly more revenue with athletes as part of an antitrust lawsuit settlement.
(Source: ESPN, June 13, 2024)
Read More >
Sony Pictures Acquires Alamo Drafthouse Cinema in Landmark Deal That Puts Studios Back in Theater Game
In a groundbreaking moment, Sony Pictures Entertainment has acquired Alamo Drafthouse Cinema in a deal that puts a major Hollywood studio back in the business of owning a movie theater for the first time in more than 75 years with certain exceptions. From 1948 until 2020, the U.S. Department of Justice prohibited film distributors from owning an exhibition company under what was known as the Paramount Consent Decrees, which arose from a 1948 U.S. Supreme Court ruling. The decrees essentially dismantled the old Hollywood studio system by forcing the majors to divest of their theater holdings.
(Source: The Hollywood Reporter, June 12, 2024)
Read More >
Former ESPN Host Sage Steele Suing CAA
Former ESPN anchor Sage Steele is suing CAA, her agents of the past 11 years, "for breach of fiduciary duty over how they handled her contentious standoff with ESPN and its parent company Disney" following "controversial remarks" she made in 2021 about COVID-19 vaccine mandates. In a lawsuit filed this morning in L.A. County Superior Court, Steele claims that agent Matthew Kramer, the agency’s co-head of sports media, "failed to do the bare minimum when she faced backlash" from ESPN. The complaint says Kramer "told his client that he would have the 'head of CAA legal' review her contract" but "instead sent the contract to a junior attorney in CAA’s business affairs department." According to the complaint, the agency "failed to give Steele the legal advice it had agreed to provide her." In an "awkward twist," Steele is "still a CAA client".
(Source: Sports Business Journal, June 11, 2024)
Read More >
How Legal Issues Can Tank a Music Catalog’s Valuation — Even if it Brings in Millions Each Year
Under normal circumstances, Sean “Diddy” Combs and R. Kelly would each own a valuable catalog of music rights, worth tens of millions of dollars apiece in a market of music investors hungry to purchase new prize assets. But because R. Kelly has been convicted of sex trafficking, sexual abuse and child pornography, while Combs is currently facing a reported federal sex trafficking investigation as well as several lawsuits alleging sexual assault, the only value each will likely get these days from those music assets is their annual income from sales and streams.
(Source: Billboard, June 6, 2024) [Subscription may be required]
Read More >
‘Baby Reindeer’s Real-Life Martha Pursues Netflix With $170M Defamation & Negligence Suit
“This is an action by Plaintiff Fiona Harvey (“Harvey”) against Defendants Netflix, Inc. and Netflix Worldwide Entertainment (collectively “Netflix”), for defamation, intentional infliction of emotional distress, negligence, gross negligence, and violations of Harvey’s right of publicity, arising out of the brutal lies Defendants told about her in the television series, Baby Reindeer,” reads the long-promised suit filed today in federal court in Los Angeles. Sold as a “true story,” Baby Reindeer, which launched on the streamer April 11, is the raw account of Gadd’s frustrated comedian character’s experience with an alleged stalker. Jessica Gunning stars as that alleged stalker, Martha, who the world learned last month is Harvey, a Scottish lawyer.
(Source: Deadline Hollywood, June 6, 2024)
Read More >
Inside the Growing War Over Merch Fees at Venues: ‘Bands Are Getting Ripped Off’
“Bands are getting ripped off,” says Barry Drinkwater, executive chairman of Global Merchandising Services, which handles merch for top metal acts such as Iron Maiden and Guns N’ Roses. He adds that the venue’s cut particularly hurts small acts, which tour on slimmer margins and often operate their own merch tables. “They need the money that gets them food, gets them to the next show,” he says. “Then the promoter wants to charge them 20% of the gross.”
(Source: Billboard, June 5, 2024) [Subscription may be required]
Read More >
SAG-AFTRA Debuts New Waiver Covering Personalized, AI-Assisted Audio Ads
As Hollywood continues to adjust to the steady march of AI into the business, SAG-AFTRA has debuted a waiver for performers who are working on personalized audio commercials incorporating the technology. The actors union’s “Dynamic AI Audio Commercials Waiver,” announced to members on Tuesday, seeks to manage how voice performances from union members are used and compensated in AI-assisted ads that change according to the specific listener or the context. (One example the union provided is if a commercial, say on a podcast, changes its greeting from “good morning” to “good afternoon” to “good night,” depending on the time of day.)
(Source: The Hollywood Reporter, June 5, 2024)
Read More >
How Asset-Backed Securities Are Changing the Music Catalog Market
Investments in music royalties keep thriving in the private market — where the Hipgnosis and Round Hill funds continue to do business — but the money is now flowing to asset-backed securities, the same financial vehicle used to create “Bowie bonds” in the 1990s. In the past two years, Concord, Kobalt, HarbourView Equity Partners, Chord Music Partners and others have raised $3.3 billion using securitizations, and music intellectual property investors say money of that magnitude will help keep catalog prices and multiples near record-high levels.
(Source: Billboard, June 5, 2024) [Subscription may be required]
Read More >
Sony Pictures to Use AI to Produce Movies and Shows In “More Efficient Ways”
Sony Pictures is embracing generative artificial intelligence to cut costs. Chief executive Tony Vinciquerra, at an investor conference in Japan, said on Thursday that the company is “very focused on AI” and mobilizing to adopt the technology into the moviemaking process to streamline production. “We’ll be looking at ways to use AI to produce films for theaters and television in more efficient ways, using AI primarily,” Vinciquerra said.
(Source: The Hollywood Reporter, May 30, 2024)
Read More >
NCAA Agrees to End Transfer Rules Permanently; Athletes Who Lost Eligibility Will Have Year Restored
The U.S. Department of Justice reached a settlement with the NCAA that will permanently bar the organization from restricting athletes’ transfer eligibility, it was announced Thursday. The settlement resolves a federal antitrust lawsuit filed by a coalition of states last December challenging the NCAA’s requirement that athletes who transfer more than once must sit out a year of competition. U.S. District Court Judge John Preston Bailey in West Virginia issued a preliminary injunction at the time that banned the NCAA from enforcing its Transfer Eligibility Rule. The DOJ joined the suit in January. A consent decree announced Thursday makes that policy change permanent, allowing athletes to transfer an unlimited number of times without penalty. It also requires the NCAA to restore a year of eligibility for current athletes who missed a year of competition since 2019-20 due to the old policy.
(Source: The Athletic, May 30, 2024)
Read More >
StubHub Slapped With $16.3 Million Jury Verdict in TicketManager Litigation
StubHub has been hit with a $16.3 million jury verdict in California state court, concluding its month-long trial against Spotlight Ticket Management, better known as TicketManager. TicketManager had sued StubHub for breach of contract, tortious interference with contract, and prospective economic advantage. The jury found in TicketManager’s favor on all three counts, awarding the company the full commission amount it was owed.
(Source: Digital Music News, May 30, 2024)
Read More >
Call of Duty Publisher Wins Huge Lawsuit Against Cheat Maker EngineOwning, Set To Receive $14.5 Million in Damages
Call of Duty's publisher has won a legal case against a cheat maker to the tune of $14.5 million in damages. If you've been familiar with Call of Duty cheats over the past several years, you've probably heard of EngineOwning: A cheat manufacturer which provided players with cheats in recent Call of Duty games, including Call of Duty Warzone and Modern Warfare 3.
(Source: GamesRadar+, May 29, 2024)
Read More >
Why Reality TV Is on Life Support
Jobs are scarce, budgets are crunched, workers are considering jumping ship and executives seem terrified to take creative risks on untested concepts. This has come as a surprise to some insiders in the space. There was an initial expectation that the 2023 actors and writers strikes would accelerate activity in reality TV, which boomed during the 2007-08 writers strike, but many say the opposite occurred — even though nonfiction, being relatively cheap to produce and largely nonunion, is a natural stopgap for entertainment companies during work shutdowns.
(Source: The Hollywood Reporter, May 29, 2024)
Read More >
Cher Wins Royalties Lawsuit Against Sonny Bono’s Widow Over Decades-Old Divorce Settlement
Cher has won her lawsuit against Sonny Bono’s widow over royalties to “I Got You Babe” and other hits after a federal judge ruled that Mary Bono must continue paying the superstar her cut under the couple’s decades-old divorce settlement. More than 20 years after Sonny’s death, Mary argued that she no longer needed to pay royalties to Cher thanks to copyright law’s so-called termination right — a provision of federal law that allows songwriters and their heirs to win back control of their intellectual property rights decades after they gave them away. But in a decision issued Wednesday (May 29), Judge John A. Kronstadt ruled that the federal termination rules do not trump Sonny and Cher’s 1978 divorce settlement, which gave the singer a permanent 50% cut of the publishing revenue from songs written before the couple split up. The ruling means that Cher will continue to receive publishing royalties for her catalog of songs created with Sonny, including “The Beat Goes On” and “Baby Don’t Go.” According to Wednesday’s ruling, more than $400,000 in royalties owed to Cher have piled up since the dispute began.
(Source: Billboard, May 29, 2024) [Subscription may be required]
Read More >
Children of Robbie Robertson Take His Widow to Court Over Claims to His Estate
The children of The Band’s Robbie Robertson have filed a lawsuit against the late rocker’s widow, claiming that she abused him financially to inherit part of his estate by coercing him to execute documents that are “oppressive, abusive and contrary to his expressly stated intentions,” according to legal documents filed this week in California. Robertson’s three kids joined the trustees of his estate and trust, Adriane Hibbert and David Jackel, as plaintiffs in the case against Janet Zuccarini, who they say in 2023, while Robertson’s health and mental capacity was in decline, presented him with a plan to purchase David Geffen’s former home in Beverly Hills for $6 million in which, according to the suit, the two would be “equal owners and equal contributors to expenses.” However, he ponied up all of the $1.8 million down payment, according to the complaint.
(Source: The Hollywood Reporter, May 24, 2024)
Read More >
How the House v. NCAA Settlement Could Reshape College Sports: What You Need To Know
Big 12 presidents and chancellors voted to approve proposals of what is expected to be a multi-billion dollar settlement in the House v. NCAA class-action lawsuit Tuesday, a source briefed on the decision confirmed to The Athletic. Their approval is another step toward a resolution in the landmark case likely to reshape the college sports business model.
(Source: The Athletic, May 20, 2024)
Read More >
Fanatics Files Suit Against Cardinals WR Marvin Harrison Jr.
Fanatics filed a lawsuit against Arizona Cardinals rookie Marvin Harrison Jr. in New York Supreme Court for breaching a contract the wide receiver signed with the retailer in May 2023. In the suit, Fanatics said Harrison has refused to fulfill his obligations to the deal while he also "publicly asserted" that the contract does not exist.
(Source: ESPN, May 18, 2024)
Read More >
The job of the artist is always to deepen the mystery
—
Francis Bacon
