TV Stations: The SESAC Check is (Almost) in the Mail

TVMLC settlement with SESAC gets the thumbs up from judge; important forms to be sent to participating stations to get the refund process rolling

If you're a full-power TV operator in the U.S. (or its territories) and you obtained a performance license from SESAC any time after January 1, 2008, make sure you keep an eye out for a form you're likely to receive from the Television Music License Committee (TVMLC) or its attorneys entitled "Settlement Antitrust Class Action Settlement Refund Payments."Fill it out, return it, pass GO, collect much more than $200 and roll again. (Note: Stations own or operated by Univision or Telefutura (now UniMas) or any station that opted out of the settlement don't qualify. We suspect that you know who you are.)

The settlement in question resolves claims made by the TVMLC against SESAC. I've already written in considerable detail about the settlement itself, so if you're at all hazy on the details, take a look at my earlier post. As I reported last November, the TVMLC and SESAC had reached a settlement agreement and submitted it to Judge Paul A. Engelmayer, the federal judge presiding over the case.

The mere fact that the parties had resolved their differences was not the end of the story; the judge had to sign off on the deal, too. So a court-issued Notice was circulated giving any malcontents the right to protest the settlement terms or opt out. This was followed by a hearing held on February 18, 2015 - and one day later Judge Engelmayer sealed the deal in an Opinion and Order. With that, if you're a qualifying station, the money will now start coming your way once TVMLC crunches some numbers.

The bulk of the Opinion and Order is legal mumbo jumbo addressing certain necessary issues, like whether the class was properly certified (it was), whether the settlement was "fair, adequate, and reasonable, and not a product of collusion" (no problem there, either), whether the plan of allocation was also "fair and adequate" (yup), and whether the contemplated attorney's fees and costs make sense (they do).

But really, most affected TV licensees are probably far more interested in another set of questions, like:

Who gets paid? Any full power television station in the United States or its territories who obtained a performance license from SESAC at any time after January 1, 2008, unlessthe station is owned and operated by the Univision or Telefutura (now UniMas) networks or the station opted out of the settlement.

What do they get? Each qualifying party will get its pro rata share of a total pay-out pool of $42.5 million fund. That figure represents "the alleged artificially inflated license fees paid to SESAC since 2008 as a result of the alleged anti-competitive conduct". (To be completely accurate, the $42.5M represents about 73% of the overall damages to be paid by SESAC; the rest is going elsewhere - you know that the lawyers have to get their cut.)

When will they get it? While the settlement has been approved, it's still going to take some months to get the money flowing. The "plan of allocation" requires that the TVMLC determine, first, the total license fees paid by each individual station to SESAC between 2008 and 2013 and paid or payable to SESAC for 2014, and second, each station's pro rata share of the total license fees, paid or payable to SESAC during these period. The TVMLC will then distribute to station owners. If more than 1% of the total settlement fund is left over after the first distribution, lather, rinse and repeat. (On the off-chance that either of the first two distributions leaves funds amounting to 1% or less of the settlement, that residue stays with the TVMLC. )

This process is supposed to start within 60 days. It will kick off with the TVMLC reaching out to stations to gather the preliminary information from which to do the necessary calculations. Again, television stations should keep their eyes out for a document entitled "Settlement Antitrust Class Action Settlement Refund Payments."The form allows participating stations to tell the TVMLC who to write the check to, so it needs to be dealt with " and fast - the completed form is supposed to be returned within 10 days after it's sent out to the stations.