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
When Copyright Law Limits Your Testamentary Freedom: Statutory Heirs Hate This One Trick . . .
Under the laws of the United States, we enjoy what is known as “testamentary freedom.” Although there are exceptions to the general rule — such as minimum amounts that automatically pass to, or can be claimed by, a surviving spouse — we are generally empowered in life to decide who will benefit from our property upon death. We can leave our valuables, including copyright, to any individual or institution we choose. The same cannot be said of copyright termination.
(Source: Arnall Golden Gregory, March 15, 2023)
Industry News
No Lawyers, No Liquor Sales?: NY State Authority Warns Madison Square Garden Owners
New York regulators have begun administrative proceedings that could lead to the suspension or revocation of all licenses held by the entity, which includes Madison Square Garden, Radio City Music Hall, and the Beacon Theater.
(Source: Law.com, March 13, 2023)
Signature Bank Collapse Sends Shockwaves Through the Broadway Industry
The news of Signature Bank’s failure sent alarm bells throughout the Broadway industry, as general managers, producers and accountants worked to make sure that shows could make their weekly payroll. State regulators seized the Signature, a New York-based bank, in the wake of the Silicon Valley Bank collapse . The Silicon Valley Bank failure spooked clients at Signature Bank and led to a run on deposits . Signature Bank, one of few banks to accept crypto deposits, was also still reeling from its outsized exposure to the sector after it imploded last year. It’s also one of the two main banks that works with Broadway productions, and so its closure was cause for alarm in the industry.
(Source: The Hollywood Reporter, March 13, 2023)
Marvel Demands Reddit Expose Redditors Behind Ant-Man and the Wasp: Quantumania Script Leak
Marvel’s latest entry to its superhero empire, Ant-Man and the Wasp: Quantumania, opened last month to mixed reviews from both critics and diehard MCU fans alike. But a polarizing reception is the least of Marvel’s worries surrounding the film as the studio tries to pin down the scoundrels that leaked the movie’s script on Reddit. As detailed by TorrentFreak, Marvel is not happy about the leaked script, which was posted in January—a month before the film’s release—on the subreddit r/MarvelStudiosSpoilers. Marvel’s finance affiliate MVL Film Finance submitted a DMCA subpoena application in United States District for the Northern District of California that demands Reddit unmask the leakers.
(Source: Gizmodo, March 13, 2023)
Music Piracy Is Rising — and the U.S. Is a Trouble Spot
Global music piracy crept up in 2022, marking the second straight year it has increased after a period of steady decline, according to a report from MUSO, a U.K. technology company. MUSO, which tracks consumption across websites around the world to “to understand the true picture of digital piracy,” logged more than 15 billion visits to music piracy sites in 2022. Piracy has been a thorn in the music industry’s side for more than two decades. In recent years, however, the widespread adoption of streaming has led to a steep drop in the types of peer-to-peer and file-sharing behavior that once threatened to bring the music business to its knees. In a world driven by streaming, rather than downloads or CD sales, the industry is increasingly focused on a different set of issues.
(Source: Billboard, March 9, 2023) [Subscription may be required]
Ticketmaster’s Post-Swift Strategy: Take On Ticket Fees
After weeks of strategizing how to salvage Ticketmaster’s reputation in the wake of last November’s Taylor Swift presale debacle and Live Nation president/CFO Joe Berchtold’s January grilling by the Senate Judiciary Committee, the ticketing giant’s parent company has settled on an approach that will ramp up lobbying to hit back at scalpers while educating consumers about ticketing fees.
(Source: Billboard, March 9, 2023) [Subscription may be required]
U.S. Judge and Soundgarden Fan Encourages Settlement in Ongoing Dispute Between Band and Chris Cornell’s Widow
A judge in Seattle overseeing a legal battle between Soundgarden and the widow of their late frontman Chris Cornell urged both parties to seek a settlement . Mainly because he’s a fan of the band and is worried that the dispute is tarnishing their legacy, as well as delaying the release of new material featuring vocals recorded by Cornell before his death. At the heart of this legal battle are various recordings Cornell made prior to his death in 2017, and a dispute over who owns said recordings and how they might be released. Though in a lawsuit filed in 2019, Vicky Cornell also accused the other members of Soundgarden of withholding royalties due to her late husband’s estate and making false statements in a bid to force her hand over the recordings.
(Source: Complete Music Update, March 8, 2023)
Lucasfilm Sued by Former Producer on ‘Star Wars’ Series ‘The Acolyte’ for Breach of Contract
Lucasfilm has dealt with plenty of shakeups over “Star Wars” recently, but now the studio is facing a full-fledged lawsuit over their beloved franchise. Lawyers for producer Karyn McCarthy have filed a lawsuit against Lucasfilm over her axing from the upcoming Disney+ “Star Wars” show “The Acolyte,” Deadline is reporting. According to filings obtained by Deadline and submitted to the LA Superior Court , McCarthy — whose former producing credits include “Ballers,” “Insecure,” and “House of Cards” — is suing for breach of contract over her dismissal from “The Acolyte,” an upcoming “Star Wars” show created by “Russian Doll’s” Leslye Headland. The specific monetary damages asked for are unclear, but the lawsuit claims that McCarthy lost out on “millions of dollars” as a result of Lucasfilm’s alleged “bad faith and wrongful termination.”
(Source: Indie Wire, March 8, 2023)
Apple’s Money and Snoop Dogg’s Songs Back This $1 Billion Music Startup
Larry Jackson learned the record business from two of the most influential music moguls ever, Clive Davis and Jimmy Iovine. Now, the 42-year-old former Apple Inc. executive is starting a music company of his own called Gamma. Jackson has about $1 billion in available capital, including equity and debt, according to people familiar with his finances. His biggest backer is Todd Boehly’s Eldridge, whose investments include the Los Angeles Dodgers, Bruce Springsteen’s music catalog and the film studio A24. Apple, where Jackson worked for the past eight years, has also invested, as has A24.
(Source: Bloomberg, March 8, 2023)
Directors Guild Contract Negotiations Set to Begin May 10
The Directors Guild of America set a date with studios and streamers for its latest contract negotiations. The union, which represents directors, assistant directors, unit production managers and others, will enter into talks with the Alliance of Motion Picture and Television Producers on May 10, the AMPTP and the DGA jointly announced. The DGA’s current basic agreement expires on June 30.
(Source: The Hollywood Reporter, March 6, 2023)
Tyler Perry, Byron Allen Eye BET Majority Stake As Paramount Explores Sale
Paramount is exploring a potential sale of a majority stake in its BET business, which includes BET, VH1 and the BET+ streaming service, a source familiar with the matter tells The Hollywood Reporter. A second source tells THR that Tyler Perry, a longtime partner of BET, is engaged in conversations to buy the stake. Perry’s deal with Paramount, which began in 2017, is said to be coming up, and the BET purchase, if it happens, would give him ownership of the brand that airs many of his shows.
(Source: The Hollywood Reporter, March 6, 2023)
Proposed Fee Hikes on U.S. Visas Will Hurt Independent Music and Inhibit Tours From Abroad
Now that COVID shutdowns are receding into memory, being a live-music lover is once again like being a kid in Candyland. But the concert industry could be significantly harmed by a proposed rules change from the United States Citizenship and Immigration Services (USCIS). If the change goes into effect, it would jack up fees for a huge range of applicants—and the cost of visas for international musicians would increase by up to 260 percent. Visas for musicians fall into two categories: O visas, typically used by solo artists (and granted to exceptional individuals in a range of fields), and P visas, which are exclusively for entertainers and athletes. Under the proposed rules, filing fees for P petitions would jump from $460 to $1,615, while fees for O petitions would climb from $460 to $1,655. In both cases, those increases would include a $600 surcharge to fund asylum processing (an unrelated but vital USCIS function).
(Source: Chicago Reader, March 6, 2023)
It’s Time to Legalize Sampling
Hip-hop is 50 years old, but the genius idea at its core remains unprotected. Here’s how we can change that.
(Source: Slate, March 3, 2023)
Warner Music, Rock Band Jesus and Mary Chain End U.S. Copyright Lawsuit
Warner Music Group Corp (WMG.O) and Scottish rock band The Jesus and Mary Chain have agreed to end a lawsuit over the band's attempt to terminate the music label's rights in its music, according court papers. The influential alternative rock band filed its lawsuit in 2021. Its founding members Jim and William Reid accused Warner Music of refusing to acknowledge their notice to the label that they were reclaiming their copyrights in their landmark 1985 debut album "Psychocandy" and other recordings.
(Source: Reuters, March 2, 2023)
AI Is Creeping Into the ‘Functional’ Music Market — What Happens Next?
Alex Mitchell, founder/CEO of Boomy, a company that offers aspiring musicians the chance to make songs in seconds with help from artificial-intelligence (AI) tools, describes a scenario in which crafting a tune for friends could be as quick and easy as snapping a cellphone shot and posting it on Instagram, and he speaks about his company’s future in blocks of 100 million tracks. “We see a huge market with many billions of original unique songs, similar to photos,” Mitchell says.
(Source: Billboard, March 1, 2023) [Subscription may be required]
A-Rod Co-Founded Ticketing Startup Jump Raises $20 Million to Take On Ticketmaster After Taylor Swift Fiasco
Baseball legend Alex Rodriguez and his business partner Marc Lore have raised a $20 million funding round for a new ticketing and fan experience business that they hope will outperform the industry’s troubled incumbents. Jump plans to offer services across ticketing, e-commerce, content and event experiences, including dynamic ticketing, which would allow fans to pay to move to a better open seat in the middle of a match.
(Source: Fortune, March 1, 2023)
When Songs Sound Similar, Courts Look for Musical DNA
The chord progressions in Ed Sheeran’s “Thinking Out Loud” and Marvin Gaye’s “Let’s Get It On” are part of a debate about just how much of a piece of music can be protected by law.
(Source: The New York Times, March 1, 2023) [Subscription may be required]
TIDAL Will Cut ‘Direct Artist Payout’ Program to Invest More in Emerging Artists
The Block-owned music streaming service TIDAL is shifting the way it pays artists after an experimental program failed to generate results. Unlike Spotify and other market leaders, which pay musicians small fractions (…of fractions) of pennies for each play, TIDAL has taken a more imaginative approach to artists payouts. The platform, which targets consumers who seek a higher-quality audio experience, introduced a novel direct artist payouts (DAP) program last year. For customers on the $19.99/month HiFi Plus tier, each individual subscriber’s most-listened artist would get 10% of their subscription fee. As it turns out, that plan didn’t work. In April, TIDAL will end the DAP program.
(Source: TechCrunch, February 28, 2023)
11th Circ. Rules IP Damages Not Limited to 3 Years
A Florida musician is not barred from seeking additional damages in a copyright infringement lawsuit against music publisher Warner Chappell, an Eleventh Circuit panel ruled in a published opinion Monday, making it the latest circuit court to determine how far back copyright holders can recover damages.
(Source: Standford Library, February 27, 2023)
Woman Who Turned in Lady Gaga’s Stolen Dogs — and Got Arrested — Sues for $500,000 Reward
A woman who was convicted after turning in two of Lady Gaga’s French bulldogs stolen in a violent robbery is suing the pop star, arguing she was never paid a $500,000 reward promised for the dogs’ return. Two months after pleading no contest to receiving stolen property, Jennifer McBride, 52, filed suit in a Los Angeles court, alleging that Lady Gaga went back on an offer to pay the reward with “no questions asked.” McBride’s connection to the robbery was unclear when she walked into a Los Angeles police station with the dogs, asking about the money Lady Gaga had offered on social media.
(Source: Los Angeles Times, February 27, 2023)
‘South Park’ Lawsuit: Warner Bros. Discovery Sues Paramount Global Over Licensing Dispute
HBO Max’s parent company has filed a lawsuit that accuses Paramount Global of reneging on parts of the $500 million licensing deal set in 2019 for the streaming rights to episodes of “South Park.” The suit, filed in New York state Supreme Court, asserts that Paramount breached the contract by steering “South Park” specials and other content to its own Paramount+ platform. The suit alleges that Paramount “blatantly intended to prop up Paramount+ at the expense of Warner/HBO,” and that Paramount engaged in “multiple and flagrant duplicitous contortions of fact and breaches of contract.”
(Source: Variety, February 24, 2023)
In NIL-Era First, NCAA Gives Miami Probation for Violation
Miami was placed on probation for one year after the school and the NCAA said women’s basketball coaches inadvertently helped arrange impermissible contact between a booster and two players who signed with the Hurricanes. It’s first time the NCAA has announced a penalty related to an investigation into name, image and likeness deals — NIL, as they are called. The NCAA probed the actions of booster John Ruiz, who has signed several Miami athletes to NIL deals. Among them are women’s basketball players Haley and Hanna Cavinder, who transferred to Miami after meeting with Ruiz — though the Cavinders told the NCAA the meeting had nothing to do with their decision to play for the Hurricanes.
(Source: AP News, February 24, 2023)
If Michael Jackson’s Estate Earns $75M a Year, What’s It Worth?
In today’s red-hot market for music assets, what is Michael Jackson‘s estate worth? That’s the $2 billion question swirling around the business, amid reports by outlets led by Variety, which broke the news, that Sony Music Group is in negotiations to buy 50% of Jackson’s estate. Billboard couldn’t confirm those talks are happening, but we crunched the numbers and estimate that the estate may carry an even higher valuation than the $1.6 billion to $1.8 billion speculated in Variety‘s story. Billboard estimates that the Michael Jackson recorded master catalog averaged nearly $44 million in annual revenue over the last three years. Since Jackson owned his masters (he likely got them back in the 1980s or early 1990s, when a bunch of Sony megastar artists individually negotiated to eventually reclaim ownership of their masters in exchange for re-signing recording contracts with the major record company), he would receive the bulk of that revenue. After subtracting an estimated 20% for distribution and producer royalties, that would leave the Jackson catalog with about $35 million annually.
(Source: Billboard, February, 21, 2023) [Subscription may be required]
Eminem Wants to Block Two ‘Real Housewives’ From Securing ‘Reasonably Shady’ Trademark
Eminem has picked a legal fight with two “Real Housewives” over their efforts to register the name of their Reasonably Shady podcast as a trademark. Citing his Slim Shady nickname, lawyers for the superstar (real name Marshall B. Mathers) quietly launched a case aimed at blocking Gizelle Bryant and Robyn Dixon (stars of the Real Housewives of Potomac) from securing a federal trademark registration on their podcast’s name. In a petition filed on Dec. 14 at the U.S. trademark office, Eminem’s attorneys said American consumers view the term “Shady” as a “unique and distinctive” term that’s linked to the rapper – meaning they would likely think that “Reasonably Shady” was somehow connected to Eminem.
(Source: Billboard, February, 21, 2023) [Subscription may be required]
SEC Fines Former NBA Star Paul Pierce $1.4M Over Cryptocurrency Promotion
The Securities and Exchange Commission (SEC) fined former NBA star Paul Pierce $1.4 million for unlawfully making misleading statements in promoting a cryptocurrency exchange. The SEC said that Pierce agreed to settle charges against him and pay $1.409 million in penalties, remedies and interest. The release states that Pierce promoted EMAX tokens, which are cryptocurrency asset securities that are sold by EthereumMax, on social media without disclosing that he received payment for doing so and made false and misleading statements about the asset.
(Source: The Hill, February 18, 2023)
Former Tourism Officials Get Prison Time in Cedar Rapids Music Festival Bank Fraud
Leaders of Cedar Rapid's local tourism board will serve federal prison time after pleading guilty to defrauding a bank to support the doomed Newbo Evolve music festival. Former Go Cedar Rapids CEO Aaron McCreight and CFO Doug Hargrave were indicted last year for misleading Des Moines-based Bankers Trust about ticket pre-sales for the 2018 festival, which advertised headliners Maroon 5 and Kelly Clarkson. According to court filings, the two men knew ticket sales were lagging far behind projections and that the event was headed toward heavy losses, but presented rosier numbers to the bank to unlock additional loans in order to pay Clarkson and cover other event expenses. The event went on to post a $2.3 million loss. McCreight and the lead event planner were fired, the bank recovered less than $800,000 of the $2.2 million it loaned for the event, and numerous other vendors also went unpaid. Within months, deeply in debt, Go Cedar Rapids was forced to shut down.
(Source: Des Moines Register, February 18, 2023)
WGA Signals TV Writing Staff Sizes, Higher Income May Be Prioritized in Coming Negotiations
The Writers Guild’s key priorities for its upcoming contract talks are beginning to come into focus. As speculation about a potential strike — which, if it took place, would be the first since the union picketed for 100 days in 2007-2008 — runs rampant across the industry, this week Guild leaders began informing members of their initial ideas for a bargaining agenda in meetings that took place on Saturday at the Writers Guild Theater and Wednesday at the Hollywood Palladium. Some top, big-picture items on the agenda: setting minimum television writing staff sizes and strategies for gaining higher compensation for members.
(Source: The Hollywood Reporter, February 17, 2023)
Barstool Sports Fully Acquired by Penn Entertainment, Which Paid $388 Million for Remaining Stake
Barstool Sports is now fully owned by casino operator and entertainment company Penn Entertainment, which Friday completed its previously announced acquisition of the property. Penn said it paid $388 million for the 64% stake in Barstool did not already own. In January 2020, Penn Entertainment, then known as Penn National Gaming, paid $163 million for a 36% stake in Barstool Sports, with previous owner the Chernin Group left with the same percentage stake. Barstool founder Dave Portnoy had sold majority control of Barstool to Peter Chernin’s Chernin Group in 2016. That initial agreement included a path for Penn to establish full control and ownership of Barstool Sports.
(Source: The Variety, February 17, 2023)
Breaking Down the NFT License Agreement for the Pre-Super Bowl Rihanna Song NFT That Entitles Owners to a Percentage of Future Digital Streaming Royalties
Ahead of Rihanna's Super Bowl LVII Halftime performance, someone put NFTs of her hit song, "B**** Better Have My Money," up for sale. What implications does the novel drop have for future NFTs in the music industry?
(Source: Law.com, February 16, 2023)
Drake & 21 Savage Settle With Condé Nast Over Fake Vogue Cover
Condé Nast has reached a settlement to end a lawsuit against Drake and 21 Savage over their use of a fake Vogue magazine cover to promote their album Her Loss, Billboard has confirmed. The agreement, first reported by the news site Semafor, includes a permanent injunction barring any further use of Condé Nast’s Vogue trademarks, as well as an undisclosed monetary payment from Drake and 21.
(Source: Billboard, February 16, 2023) [Subscription may be required]
Pharrell Williams Confirmed as New Louis Vuitton Menswear Creative Director
It’s official: Pharrell Williams is taking over the role of menswear creative director at Louis Vuitton. The house as well as Williams’ PR rep have just confirmed news reports that he had been in talks to take the job, which was last filled by the late designer Virgil Abloh. Williams’ first collection for Louis Vuitton will be shown to the world in June during men’s fashion week in Paris. Long hailed as a trend-setting style icon on red carpets, Williams, 49, has maintained a close relationship with Chanel, where his role as a brand ambassador was extended last October. The record producer has also done fashion collaborations with such brands as Moncler, Adidas for its Stan Smith line and even two with Louis Vuitton (including a line of aviator sunglasses). He also founded the streetwear lines Billionaire Boys Club and IceCream, as well as the skin-care line Humanrace.
(Source: The Hollywood Reporter, February 12, 2023)
Getty Images Sues AI Company Over Hideous Frankenphotos
Getty Images has filed a new lawsuit in the U.S. against the company behind Stable Diffusion, an immensely popular AI image creator. And while the photos included in the lawsuit are all about dissecting a notoriously dry subject like copyright infringement, they’re actually really funny. Getty alleges in the lawsuit that Stability AI has engaged in “brazen infringement of Getty Images’ intellectual property on a staggering scale,” and claims the AI company is effectively trying to start a competing business. “Stability AI has copied more than 12 million photographs from Getty Images’ collection, along with the associated captions and metadata, without permission from or compensation to Getty Images,” the lawsuit reads.
(Source: Forbes, February 6, 2023)
How Much Humanity Will AI-Generated Songs Need to Be Copyrightable?
Music “as we know it” has been prematurely pronounced dead several times over. The cassette tape, MIDI digital synthesizers, Napster, Auto-Tune and streaming were all received with apocalyptic hysteria. The current existential threat is artificial intelligence (AI), a software leviathan with a voracious appetite for copyrighted works, and a prolific capacity for human-free creative processes. Whether AI will kill the humanity of music remains debatable. What is not up for debate is that AI raises many legal issues. While courts have yet to weigh in, the U.S. Copyright Office has issued instructive decisions and made AI-related copyright issues a 2023 priority.
(Source: Billboard, January 27, 2023) [Subscription may be required]
Success is a worn down pencil.
