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
Stage Bound: A Guide to U.S. Visas for Artists and Musicians
The United States offers arguably the best opportunities in the world for artists and musicians from every country to express their talents, including on stage, on screen, and in recorded performances. However, the U.S. also has some of the toughest immigration laws in the world and many artists struggle with securing the right visa — a temporary authorization to enter the country — to engage in their art on U.S. soil.
Why is a visa even required? Entering the U.S. without proper authorization (such as illegally crossing the border) or without the correct authorization (such as obtaining the wrong visa) or overstaying the length of time authorized by a visa can have severe consequences. Fines, imprisonment, deportation, and indefinite entry bans are all possible penalties for failure to abide by U.S. visa requirements.
(Source: Arnall Golden Gregory, September 20, 2023)
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Industry News
SEC Files Charges Against NFT Project ‘Stoner Cats’ Starring Ashton Kutcher, Mila Kunis and More
The federal government’s crypto crackdown is hitting Hollywood again — this time targeting a starry animated Web3 series featuring the voices of Ashton Kutcher, Mila Kunis, Chris Rock, Jane Fonda, Seth MacFarlane and more. The Securities and Exchange Commission on Wednesday charged the creators of the NFT cartoon series Stoner Cats for an unregistered offering of NFTs. Kunis and Kutcher not only lent their voices to the cast but also went on a media tour to tout the project. Stoner Cats 2 LLC agreed to pay a $1 million civil penalty and use it to establish a fund to return money to the buyers of the NFTs, the SEC said in a statement. It did not admit or deny any wrongdoing.
(Source: The Hollywood Reporter, September 13, 2023)
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Tech Company Sues Dallas Cowboys
The Dallas Cowboys were hit with a patent infringement lawsuit on Sept. 13 in Texas Northern District Court. The suit, brought by Ramey LLP and Quilling Selander Lownds Winslett & Moser on behalf of Front Row Technologies, alleges that wireless network technology at AT&T Stadium which allows patrons to obtain location-based services on a mobile app, including seat-tracking and guidance towards concession stands, infringes the plaintiff’s patent. Counsel have not yet appeared for the defendant.
(Source: Law.com, September 13, 2023)
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Travis Scott Sold ‘Utopia’ Vinyl for $5 (and Likely at a Loss) — Could the Strategy Catch On?
Many in the industry believe the rapper was not making a profit. One manager who spoke on the condition of anonymity says he was recently quoted around $7 a unit to manufacture an order of double vinyl. In a senior executive’s experience, “it costs $4 to make a single LP if it’s super bare-bones and you’re making a high quantity,” and more for a double LP. Throw in mechanical royalties, typically paid out on records at a rate of 12 cents per song, and it’s hard to imagine that a $5 double-record could make any money. Even if Scott were selling some records at a loss, he’s not losing money overall: The rapper is famous for moving mountains of merch, some of which goes for a good deal more than $50. But the ability to offer up some records at $5 — $4.99 is the lowest price an album can be sold at and still count towards the Billboard 200 — shows the extent to which stars with fervent fan bases and formidable merch operations operate in a different world than most artists. And since an album’s streaming numbers usually dip as listener enthusiasm begins to wane after debut week, it’s possible that more artists might start to mark down records to help bolster demand and chart placement.
(Source: Billboard, September 12, 2023) [Subscription may be required]
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Authors Sue Meta, OpenAI in Lawsuits Alleging Infringement of Hundreds of Thousands of Novels
Authors are escalating efforts to block artificial intelligence companies from using their copyrighted works to train artificial intelligence systems, this time taking aim at Meta and OpenAI in proposed class action lawsuits. Michael Chabon and other decorated writers of books and screenplays sued Meta in California federal court in a lawsuit accusing the company of copyright infringement for harvesting mass quantities of books across the web, which were then used to produce infringing works that allegedly violate their copyrights. OpenAI was sued on Sept. 8 in an identical class action alleging the firms “benefit commercially and profit handsomely from their unauthorized and illegal” collection of the authors’ books. They seek a court order that would require the companies to destroy AI systems that were trained on copyright-protected works.
(Source: The Hollywood Reporter, September 12, 2023)
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Jared Leto Pulls Plug on Lifestyle Brand Twentynine Palms; Oscar Winner Terminates Deal With Owner and Alleges Breach of Contract and Mismanagement
Many months ago, Leto terminated his relationship with the parent company Maapilim Ltd due to what he believes was a breach of contract and mismanagement by the brand operator," Leto's rep tells THR.
(Source: The Hollywood Reporter, September 11, 2023)
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Exceleration Music Moves Into Distribution With Redeye Acquisition
Exceleration Music, the independent music company that has invested in and acquired numerous indie labels over the past several years, has acquired global digital and physical distribution and music services company Redeye, it was announced Friday (Sept. 8). The deal not only marks Exceleration’s biggest acquisition to date but an expansion into distribution and services, effectively creating an entirely new division at the company — albeit one that will continue to operate under the Redeye name. Under the agreement, Redeye founders Glenn Dicker and Tor Hansen will continue to lead the company, retaining its existing staff and infrastructure while taking advantage of the resources and expertise offered by the Exceleration partners and team.
(Source: Billboard, September 8, 2023) [Subscription may be required]
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Wall Street’s M&A Sharks Are Getting Ready for a Feeding Frenzy of Hollywood Deals
For decades, competition enforcers essentially rubber-stamped many so-called vertical mergers — the combination of firms in different parts of a supply chain, rather than direct competitors — under the theory that they lower production costs and ultimately lead to lower prices for consumers. This changed under the Biden administration’s Federal Trade Commission and Department of Justice, both of which have been seeking to rein in consolidation of major industries by a handful of companies.
(Source: The Hollywood Reporter, September 6, 2023)
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Kanye West Files Lawsuit Over Leaked Music on Instagram
Ye, the rapper formerly known as Kanye West, has filed a new lawsuit over leaked music on Instagram. Ye is suing for misappropriation of trade secrets and breach of contract in court documents obtained by The Blast. Ye is the owner of several musical copyrights that have been leaked to Twitter and Instagram.
(Source: Yahoo!, September 6, 2023)
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Amazon Sues Alleged Counterfeiters in ‘Hidden Links’ Scheme
Amazon has accused a pair of social media influencers of promoting counterfeit goods. In a lawsuit filed on Sept. 6, the eCommerce giant accuses Kamryn Russell, Ashley Hawat and unnamed co-conspirators of intentionally trying to get around Amazon’s brand protection systems to sell fake versions of luxury handbags, jewelry and accessories. “In this case, both Russell and Hawat attempted to use a ‘hidden links’ scheme in which they posted links on their social media pages that directed their followers to seemingly generic product listing pages in the Amazon store,” Amazon said in a news release.
(Source: PYMNTS, September 6, 2023)
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Universal Music Group Lands New Royalty Model That Boosts Popular Artists
Universal Music Group (UMG) announced a new streaming deal with French music service Deezer that aims to direct more listener payouts toward professional artists. The changes will essentially count a single listen as two listens on popular tracks, giving them more revenue than smaller ones. Currently, platforms like Apple Music and Spotify (and Deezer) generally divide payments based on total listens, regardless of what the track is or who made it.
(Source: The Verge, September 6, 2023)
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As Success-Based Residuals Dominate U.S. Labor Strife, Could Netflix’s European Payout Structure Be the Blueprint to Solve Strikes?
Since the outbreak of the dual Hollywood labor strikes, the issue of residuals has risen to the fore as a key battleground dividing the industry’s creative cluster and the studios, networks and streamers. Both the WGA and SAG-AFTRA have proposed changes to the current, fixed residual system. The WGA has suggested a viewership-based residual model, in addition to fixed residuals, while SAG-AFTRA is asking for actors to receive a 2% share of the revenue generated from streaming content.
(Source: Deadline Hollywood, September 5, 2023)
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Sean ‘Diddy’ Combs Reassigns His Bad Boy Publishing Rights Back to Artists, Songwriters
Sean “Diddy” Combs has reassigned his publishing rights back to all the artists and songwriters who helped build the label he founded, Bad Boy Entertainment. Ma$e, Faith Evans, The LOX, 112 and the Estate of the Notorious B.I.G. are among the creatives who have already signed agreements to regain those rights, Billboard has learned.
(Source: Billboard, September 4, 2023) [Subscription may be required]
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Disney Tells Charter Subscribers to Consider Hulu With Live TV Option
The battle between Charter Communications and Walt Disney, spurred due to cord-cutting, is now getting very tangled. Charter suggested that it might be ready to cut Disney networks from its programming lineup after the two companies reached an impasse in talks to extend their carriage contract Now Disney is hinting to Charter subscribers that they might want to cut their connection with the large cable distributor.
(Source: Variety, September 4, 2023)
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Gervon Dexter Sues to Nullify NIL Deal at Florida
Bears rookie defensive tackle Gervon Dexter has filed a lawsuit against Big League Advance Fund to void a contract he signed that gives 15% of his pre-tax NFL earnings to the speculative investment capital company. Big League Advance provides funding for athletes in college and baseball’s minor leagues in exchange for a return of future earnings. Dexter signed the contract at Florida last year. According to the lawsuit, Dexter received $436,485 from Big League Advance in exchange for 15% of his pre-tax NFL earnings for 25 years. Dexter, a second-round draft pick (No. 53 overall), signed a four-year, $6.7-million dollar rookie contract with the Bears, including a $1.9 million signing bonus and $3.7 million guaranteed overall.
(Source: Chicago Sun-Times, September 2, 2023)
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Cardi B & Megan Thee Stallion Beat Copyright Lawsuit
Cardi B and Megan Thee Stallion have won a court ruling tossing out a lawsuit that accused them of stealing lyrics.
(Source: Billboard, September 1, 2023) [Subscription may be required]
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Memer Beware: Owners of the ‘Space Jam’ Song Are Suing Those Who Used It
A company that owns the rights to the “Space Jam” theme is suing a minor-league baseball club for using it – the latest in an increasingly active legal campaign to demand payment for a song that has been heavily used in internet memes and mashups for the past twenty years. Watson Music Group, which bought the rights to “Space Jam” in 2019 from its original songwriters, has filed three federal lawsuits in the last three months, accusing companies of infringing its copyrights by using the song on the internet without permission. It’s also sent legal threats to an unknown number of others, arguing that unauthorized users must pay a “retroactive license” to avoid legal liability.
(Source: Billboard, August 30, 2023) [Subscription may be required]
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Earth, Wind & Fire Tribute Band Hits Back at Trademark Lawsuit: You Abandoned Your Name
A tribute band that was sued by Earth, Wind & Fire for trademark infringement is firing back with a bold counterargument: That the famed R&B act has actually abandoned any intellectual property rights to its name. In a court filing on Aug. 30, the smaller band — which calls itself Earth Wind & Fire Legacy Reunion — argued that the original group had allowed so many tribute bands to use its name without repercussion that it can no longer claim exclusive rights to it.
(Source: Billboard, August 30, 2023) [Subscription may be required]
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The SEC Brings Its First NFT Enforcement Action
The Securities and Exchange Commission on August 28 sued Los Angeles-based podcasting firm Impact Theory for allegedly offering securities in the form of non-fungible tokens (NFTs), raising more than $30 million through sales in late 2021.
(Source: Axios, August 28, 2023)
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Late-Night Comedy Writers Score Safeguards in Streaming Amid WGA/AMPTP Negotiations
As Hollywood waits for movement between the WGA and AMPTP, a ray of sunlight emerged for comedy/variety writers in the latest back-and-forth. Late-night writers, and writers who work on variety shows such as Netflix’s Tim Robinson series I Think You Should Leave, have been fighting for safeguards in streaming.
(Source: Deadline Hollywood, August 26, 2023)
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The Minnesota Twins Will Change the Name of Their ‘Summer Fest’ Since, You Know, Summerfest Belongs to Milwaukee
The Twins will no longer be using the name "TC Summer Fest" for its two-day music extravaganza at Target Field in Minneapolis, and Summerfest organizers have agreed to withdraw their lawsuit citing trademark infringement. In July, Imagine Dragons and The Killers headlined the event in Minnesota, not long after Imagine Dragons played the final day of Milwaukee's Summerfest at the American Family Insurance Amphitheater. In the lawsuit, Milwaukee World Festival Inc. cited the close regional and calendar proximity, the tangible evidence of concertgoers confusing the two events and even the fact that both events featured one of the same bands.
(Source: Milwaukee Journal Sentinel, August 24, 2023)
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Isley Brothers Headed for Long Court Battle Over Legal Rights to Band Name
There won’t be a quick end to a nasty lawsuit pitting members of the Isley Brothers against each other over the trademark rights to the band’s name. In a ruling, U.S. District Judge Thomas M. Durkin refused to dismiss Rudolph Isley’s lawsuit, which accuses brother Ronald Isley of improperly attempting to secure a federal trademark registration on the “The Isley Brothers” – a name Rudolph claims is supposed to be jointly owned.
(Source: Billboard, August 24, 2023) [Subscription may be required]
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Why Streaming Services Are Pushing Subscribers to Ad Tiers
On Disney’s last quarterly earnings call Aug. 9, CEO Bob Iger waited until the end of his opening remarks to drop the hammer: His company’s streaming business was introducing price increases. Big ones. The monthly cost of the Disney+ and Hulu ad-free tiers would be rising by nearly 30 percent, or $3. For a company desperately trying to turn its money-losing streaming business into a moneymaker, the pivot marked a critical strategic shift in its path to profitability. However, Iger added that “maintaining access to our content for as broad an audience as possible is top of mind for us, which is why pricing for our stand-alone ad-supported Disney+ and Hulu offerings will remain unchanged.”
(Source: The Hollywood Reporter, August 23, 2023)
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BMI May Sell to Private Equity Firm for $1.7B, Sources Say
BMI is considering an offer to sell to New Mountain Capital, a private equity firm that has been quietly looking at music assets over the last few years, according to sources. The deal has yet to be signed, as New Mountain Capital has entered an exclusive window to scrutinize the deal.
(Source: Billboard, August 23, 2023) [Subscription may be required]
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Vermont Law School Can Conceal Murals Deemed Racially Offensive, Against the Artist’s Wishes, a Circuit Court Ruled
A pair of offensive murals about slavery can be covered up by Vermont Law School against the artist’s wishes, a second circuit court ruled on Friday, according to Courthouse News. The judge upheld a previous verdict made by a district court in 2021 that concealing the artwork would not violate a federal law that protects artists from having their work destroyed or modified.
(Source: Artnet News, August 21, 2023)
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The 40(ish) Most Important People in Podcasting in 2023
It is the best of times and the worst of times for podcasting. In 2023, the industry put the brakes on a period of lavish spending and nine-digit megadeals and — much as its streaming counterparts did last year — followed largesse with austerity. Facing challenges surrounding the advertising model, macroeconomic concerns and a post-pandemic slowdown, some of the biggest players, including Spotify, Vox Media and NPR, announced mass layoffs. Many others — like SiriusXM and Amazon — cut their podcast budgets significantly. And yet, unlike in other struggling segments of the entertainment business, audiences are continuing to grow with no ceiling in sight. According to an analysis by Edison Research, “Podcasting is ‘back,’ reaching the highest numbers ever, with 90 million listeners each week.” Another study, by iHeart Media, suggests that expansion has chipped away time spent on streaming and social media. And with upward of 3 million podcasts on offer, more people are listening to more content than at any time since the heyday of radio. (Even as much of it is increasingly released in video form, as well.) The power players listed here are those best poised to take advantage of this paradoxical moment.
(Source: The Hollywood Reporter, August 21, 2023)
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Knicks Sue Former Employee, Raptors, Cite Disclosure of ‘Proprietary Information’
The New York Knicks on August 21 sued the Toronto Raptors, members of the Raptors organization and a former Knicks employee whom they alleged "illegally procured and then disclosed proprietary information" to their Atlantic Division rival. According to a copy of the lawsuit, which was filed in the U.S. District Court in Manhattan and was obtained by ESPN, the Knicks state that Ikechukwu Azotam, who worked for the Knicks from 2020 to 2023, sent the Raptors thousands of confidential files -- including play frequency reports, a prep book for the 2022-23 season, video scouting files, opposition research and more -- after the team began recruiting him to join their organization in summer 2023.
(Source: ESPN, August 21, 2023)
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Ninth Circuit Court Looks Likely to Revive Copyright Lawsuit Over Fortnite Emote
A lawsuit over a Fortnite emote could be revived, after judges in the US Ninth Circuit Appeals Court considered arguments put forward by choreographer Kyle Hanagami in his copyright infringement litigation against the video game’s maker Epic Games. Hanagami sued Epic last year, claiming that a dance sequence he created for Charlie Puth’s ‘How Long’ video had been ripped off for an emote in Fortnite called It’s Complicated. However, a lower court judge decided that the moves shared by the Puth sequence and It’s Complicated were too generic to enjoy copyright protection. But on August 16 – when considering an appeal filed by the choreographer – judges in the Ninth Circuit seemed persuaded by arguments that, when it comes to copyright and choreography, things are probably not as straight forward as the lower court assumed. Indeed, they might conclude, when it comes to copyright and choreography, “it’s complicated”.
(Source: The Complete Music Update, August 17, 2023)
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Songwriters & Publishers Have a $250M Payday Coming After Streaming Royalty Determination
Publishers should get ready to welcome a royalty windfall now that the Copyright Royalty Board has printed its Phonorecord III final determination in the Federal Register — the last step to make the new rate structure official, concluding a more-than-four-year royalty row between publishers and streaming services. While various industry estimates are all over the place with some even reaching another $400 million, by Billboard estimates, the just announced determined rates — finalized eight months after the 2017-2022 term expired — could yield up to another $250 million in underpaid mechanical royalties flowing from digital services to publishers and songwriters. Now, digital services like Spotify, Amazon Music, YouTube and Pandora have six months to review and adjust past payments made for U.S. mechanicals to the new rates. Doing that will take a complicated assessment of past payments and applying them under the new finalized structure.
(Source: Billboard, August 17, 2023) [Subscription may be required]
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‘The Nun’ Actress Sues Warner Bros. in Breach of Contract Lawsuit Over Merchandise Revenue
Warner Bros. Discovery has been accused of shorting Bonnie Aarons her share of merchandising revenue for playing the demon nun in the Conjuring universe. The complaint names Warners, New Line Cinemas and Scope Productions, which allegedly entered into an agreement with Aarons to play the nun in the franchise. She was paid $71,500 for her role in The Nun, which grossed over $365 million against a budget of $22 million, according to the complaint. Her contract included a $175,000 bonus tied to box office performance on top of a share of profits from merchandise exploiting her character.
(Source: The Hollywood Reporter, August 17, 2023)
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Coldplay Hit by Lawsuit From Former Manager Dave Holmes
A representative for the band confirmed to Variety that Holmes parted ways with the quartet a year ago, ending a 22-year collaboration that had been in place for almost the entirety of the band’s entire professional career. Coldplay is now managed by Phil Harvey, Mandi Frost and Arlene Moon – who were present and have been a part of Coldplay’s journey alongside Holmes for a number of years.
(Source: CelebrityAccess, August 17, 2023)
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Twitter/X Wants Music Publishers’ Copyright Lawsuit Tossed Out
Twitter has filed its first formal response to a lawsuit from music publishers alleging widespread copyright infringement on the platform, arguing that it cannot be held liable for the actions of its users. The filing came two months after dozens of music publishers sued the Elon Musk-owned site, claiming its users had infringed over 1,700 different songs from writers like Taylor Swift and Beyoncé — a claim that, if proven, could put the social media giant on the hook for $255 million in damages.
(Source: Billboard, August 15, 2023) [Subscription may be required]
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‘Wholesale Theft’: Labels Sue Internet Group for Copyright Infringement Over Digitized Vinyl Records
Universal Music, Sony Music and Concord are suing the Internet Archive over a project to digitize old vinyl records from Frank Sinatra, Ella Fitzgerald, Bing Crosby and other iconic artists, calling it “blatant” copyright infringement under a “smokescreen” of preservation. In a complaint filed in Manhattan federal court, the labels took aim at the Internet Archive’s “Great 78 Project,” in which thousands of physical records have been digitized and made available to users for free. They called the project “wholesale theft of generations of music.”
(Source: Billboard, August 14, 2023) [Subscription may be required]
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If you could say it with words, there would be no reason to paint.
—
Edward Hopper
