The Pitch - August 2022

Arnall Golden Gregory LLP
Contact

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

All That You Can’t Leave Behind: Creative Control From Beyond the Grave
Respected creators understand that the key to artistic integrity is maintaining creative control. We celebrate artists like Prince who were steadfast in their creative vision, and musicians are often warned about the pitfalls of giving up the rights to their works. So, what happens when the artist is no longer around to provide direction as to how their work is to be presented, monetized, or consumed?
(Source: Arnall Golden Gregory LLP, August 17, 2022)

Industry News

TikTok Curators Are Helping Songs Go Viral — and Labels Are Writing Checks
TikTokers used to find music primarily through dance trends. Now they're gravitating to creators who recommend new songs.
(Source: Billboard, August 12, 2022) [Subscription may be required]
Disney’s Easy Escape From Evel Knievel Suit Probed by 9th Cir.
The speed with which Walt Disney Studios dispatched a trademark and right-of-publicity suit over “Toy Story 4" by the heirs of late stuntman Evel Knievel received scrutiny from the Ninth Circuit at oral arguments on August 10.
(Source: Bloomberg Law, August 11, 2022)
Netflix Must Pay Writers Residuals of $42 Million
The Writers Guild has scored a $42 million arbitration award against Netflix for unpaid residuals. The arbitration involved the Sandra Bullock feature Bird Box. The picture was released for a brief theatrical run before moving to the streaming service. The Guild asserted that this triggered theatrical residuals under the WGA Agreement. Under this formula, the writer gets paid 1.2% of the producer’s gross receipts from licensing the picture to another medium, including a streaming service.
(Source: Fox Rothschild, August 10, 2022)
“The Oprah Effect”: Harpo Sues Oprahdemics Podcast for Using Her Famous Name Without a License
Harpo Inc., which owns her trademarks, carefully vets any licensing opportunity. Now it’s taking a podcasting duo to court over what it says is an unauthorized attempt to capitalize on “The Oprah Effect.” Harpo Inc. is suing Kellie Carter Jackson and Leah Wright Rigueur over their Oprahdemics podcast.
(Source: The Hollywood Reporter, August 10, 2022)
‘Hamilton’ Team Protests After Church Production Adds Christian Themes
Lawyers for the creators of “Hamilton,” the record-setting musical that remains a worldwide draw seven years after its Broadway debut, protested after a Texas church put on an unauthorized production Church performers changed some lyrics and introduced Christian themes that were not part of the original. A pastor at The Door McAllen, a nondenominational Christian church in McAllen, Texas, near the Mexican border, claimed on Sunday that “the ‘Hamilton’ team” had given the church a license to perform its version of the musical . But after the church posted footage of the production online, they “were immediately contacted by a lawyer from ‘Hamilton,’” who asked them to remove it, the pastor said.
(Source: The New York Times, August 9, 2022)
Roberto Clemente’s Family Sues Puerto Rico Gov’t for $45M
The family of Puerto Rico’s baseball legend Roberto Clemente has filed a lawsuit in the local US District Court against several commonwealth government officials claiming $45 million in copyright infringement damages.
(Source: NimB, August 8, 2022)
SAG-AFTRA Board Approves Tentative Netflix Agreement
The SAG-AFTRA National Board voted “overwhelmingly” to approve a new agreement with Netflix, the guild announced following a special meeting on Monday. The tentative contract, which covers scripted, dramatic episode and feature productions made by the streaming service, will now be sent to union members for a ratification vote.
(Source: The Hollywood Reporter, August 8, 2022)
The Changing World Of: Music Distribution
In a sense, the job of a distributor used to be simple: deliver an album or a single from the record label to the retailer so that fans could find a copy when they went to their local record store. But as digital platforms and the data gleaned from streaming and social media have given artists more autonomy, opening different pathways to a successful career, many distribution companies have evolved from cogs in the retail machine to support systems for those looking to cut through an increasingly-crowded music market. And as venture capital money and a surge of competition pour into the space, with newcomers undercutting market norms with lower rates and new services, the established players are adapting to meet the new landscape. Here, six top executives from some of the leading distribution companies in the industry explain how the world of distribution has changed, and will continue to evolve moving forward, as technology and the influx of new competitors ramp up the pressure.
(Source: Billboard, August 5, 2022) [Subscription may be required]
CBD Company Order to Pay Clint Eastwood $2 Million
A California-based CBD company was ordered by a judge to pay actor Clint Eastwood $2,029,245.07 on August 2, 2022 . The company Garrapata, LLC filed a Complaint against Norok Innovation, Inc. and Eric Popowicz and others alleging trademark infringement. Garrapata holds all trademarks related to Mr. Eastwood and Mr. Eastwood’s name and persona rights apart from those he grants in connection with the promotion and exploitation of the films he makes. The article noted that Eastwood brought the infringement claims against Norok and Popowicz in a January 2021 suit, which was his second suit in less than a year against the pair.
(Source: Green Market Report, August 4, 2022)
Live Nation Sets Records in Second Quarter as Fans Flock to Concerts
Live Nation executives were not overpromising when they described intense supply and demand for concerts following the return of the touring business. In the second quarter, the concert promoter set records for adjusted operating income, fee-bearing gross transaction value for ticket sales and quarterly attendance, the company announced Thursday (Aug. 4).
(Source: Billboard, August 4, 2022) [Subscription may be required]
Kevin Spacey Must Pay $31M in ‘House of Cards’ Dispute, Judge Affirms
Kevin Spacey has lost his bid to overturn a $31 million arbitration award he was ordered to pay House of Cards producer MRC for sexual misconduct involving young crewmembers behind the scenes of the Netflix series. Spacey was dropped from the Netflix series during its sixth season after allegations surfaced that he preyed on young men. The dispute was sent to arbitration, where an arbitrator found that the actor breached his contract by violating anti-harassment policies and failing to provide services “in a professional manner.” The arbitrator also found that Spacey wasn’t entitled to be paid for the remainder of his contract, even though it contained a pay-or-play provision, and that his breaches caused the show’s sixth season to be shortened and rewritten and cost MRC eight figures in costs and lost revenue.
(Source: The Hollywood Reporter, August 4, 2022)
What Music Midtown Means for Guns at Georgia Concerts and Festivals
The Atlanta event's cancellation has brought added attention to the heated issue of guns on publicly-held land in the Peach State.
(Source: Billboard, August 3, 2022) [Subscription may be required]
California Readies $1.65B Film/TV Tax Credit to Draw Productions From Anti-Abortion States
Gov. Gavin Newsom is backing legislation that will extend California’s film and television tax program for an additional five years through 2030. The announcement on Wednesday came in an intensifying bid to draw productions from states, like Georgia and Oklahoma, that have passed laws restricting abortion rights after the Supreme Court overturned Roe v. Wade. The bill, if passed, will provide $1.65 billion or $330 million annually in tax credits to film, TV and other media productions beyond 2025, when the program was set to expire. Last year, Newsom signed off on adding $180 million in incentives over the next two years, which temporarily increased the annual amount in incentives to $420 million, thanks to a budget surplus. The expansion of the program included $150 million in tax credits to encourage soundstage construction.
(Source: The Hollywood Reporter, August 3, 2022)
Podcast Guests Are Paying Up to $50,000 to Appear on Popular Shows
Welcome to the golden era of pay-for-play podcasting, when guests pay handsomely to be interviewed for an entire episode. In exchange, the host gets some revenue, fills out the programming calendar, and might bag a future advertiser.
(Source: Bloomberg, August 3, 2022)
Phil Mickelson, 10 Other LIV Golfers File Antitrust Lawsuit Against PGA Tour
Six-time major champion Phil Mickelson and 10 other golfers on the Saudi-backed LIV Golf Invitational Series filed an antitrust lawsuit Wednesday to challenge their suspensions by the PGA Tour.
(Source: CNN, August 3, 2022)
Stephen King Testifies That Merger Between Publishing Giants Would Hurt Writers
The best-selling author Stephen King testified on Tuesday in a suit filed by the Justice Department to block Penguin Random House from buying Simon & Schuster, saying the merger of two of the country’s largest publishers would make it harder for writers to earn a living. Mr. King testified as a witness for the government, which has filed a lawsuit in U.S. District Court for the District of Columbia aiming to stop the $2.18 billion acquisition.
(Source: The New York Times, August 2, 2022)
AMC's 'Better Call Saul' Is Sued Over Tax Trademark
Liberty Tax Service, one of the largest U.S. tax preparers, has sued the companies behind AMC's hit crime drama "Better Call Saul" for what it says was a rip-off of its trademarks and Statue of Liberty logo in depicting the fictional "Sweet Liberty Tax Services" in a recent episode. In a complaint filed in Manhattan federal court, Liberty Tax accused AMC Networks Inc and Sony Pictures Television Inc of sowing confusion and causing harm by leading viewers to believe Sweet Liberty was one of Liberty Tax's more than 2,500 offices.
(Source: Reuters, August 2, 2022)
Georgia’s Film Industry Brought $4.4 Billion Into the State This Year, Governor’s Office Says
Gov. Brian Kemp announced another chart-topping year for the film and television industry. In a news release Monday, the governor’s office said productions spent $4.4 billion in Georgia during the fiscal year for 2022.
(Source: WSB-TV, August 1, 2022)
Netflix Sues Co-Creators of ‘The Unofficial Bridgerton Musical’ Over “For-Profit” Performances
Abigail Barlow and Emily Bear are being sued by Netflix for staging “for-profit” performances of their Grammy-winning Unofficial Bridgerton Musical. In a lawsuit filed in D.C. District Court, the streamer alleges that the duo and their company Barlow & Bear have profited off of “valuable intellectual property from the Netflix original series Bridgerton” through a July 26 performance — a “for-profit stage show entitled ‘The Unofficial Bridgerton Musical Album Live in Concert'”— at the Kennedy Center and a future performance set for the Royal Albert Hall in London, as well as “their own line of Bridgerton-themed merchandise.”
(Source: The Hollywood Reporter, July 30, 2022)
Paramount Settles Suit Against ‘Mission: Impossible’ Insurer Over COVID-19 Production Delays
Death-defying stunts and an endless stream of unforeseen expenses caused by the COVID-19 pandemic is forcing Paramount Pictures and its financial partners to shoulder a massive $290 million budget for Mission: Impossible — Dead Reckoning Part One. It’s tens of millions more than they expected to spend on the Tom Cruise-led project. Paramount will get some of that back in a deal with Federal Insurance Company resolving a suit accusing the Chubb unit of refusing to live up to the terms of its insurance policy. According to a court document filed on Wednesday, the two sides reached a tentative agreement to settle claims over COVID-19 production delays and costs. Terms of the resolution weren’t disclosed.
(Source: The Hollywood Reporter, July 28, 2022)
Unique IP Concerns When Celebrities and Athletes Are Involved in NFT Projects
Given the recent rise in the popularity and profitability of non-fungible tokens (NFTs), celebrities have entered the market not only by purchasing NFTs, but also by minting their own. However, because NFTs often involve the intersection of multiple layers of intellectual property rights, celebrity NFT projects present a variety of potential pitfalls. In particular, these NFT projects often implicate trademark, copyright, and name, image, and likeness (NIL) rights.
(Source: JD Supra, July 28, 2022)
Can Snap Bounce Back — and Change Live Music’s Future?
Technology showing things on a screen that aren’t there in real life is augmented reality, an area of innovation that Snapchat and its parent company, Snap Inc., have quietly dominated for years. Since 2013, when Snapchat debuted Lenses — which let users apply AR filters over photos and videos — the company has developed AR technology for both utility and entertainment. Live music could benefit from both Now, as startups and tech ­giants alike are increasingly using AR, Snap wants to position itself as the company best suited to bring it to concerts. Its new, multiyear partnership with concert giant Live Nation, the parent company of Lollapalooza promoter C3 Presents, will surely help.
(Source: Billboard, July 28, 2022) [Subscription may be required]
Licensing, Lawsuits and Revenue Sharing: Meta’s Evolving Relationship With the Music Industry
On 20 July, Swedish music company Epidemic Sound filed a suit against Meta (parent company of Facebook and Instagram) in San Francisco, alleging mass violations of its copyrights. Epidemic Sound claims that Meta had stored hundreds of its tracks in the music libraries of Instagram and Facebook and allowed users to download them, stream them and incorporate them in their UGC videos – and all without permission. “This action seeks to stop the theft of music created by hundreds of musicians, songwriters, producers and vocalists, theft occurring knowingly, intentionally and brazenly by Meta on its Facebook and Instagram social media platforms on a daily basis,” said Epidemic Sound in its filing. “Defendant Meta is not merely aware of this infringement. It has actively infringed, as well as participated in, encouraged and enabled such infringement.” The scale of the damage, according to Epidemic Sound, is enormous, running into billions of plays of unlicensed music across millions of videos on the two social media platforms in question. Epidemic Sound estimated that a staggering 94% of content that uses its music on Meta’s platforms “is unlicensed and thus infringing”.
(Source: Synchtank, July 28, 2022)
‘Baseball Players Don’t Dance’? The Savannah Bananas Beg to Differ
TikTok choreography, dancing umpires, a ballet-trained first-base coach: This collegiate summer league team has amassed a following by leaning into entertainment.
(Source: The New York Times, May 31, 2022)
Rap on Capitol Hill: Proposed Federal Law Would Ban Lyrics From Criminal Cases
A proposed law introduced in Congress on July 27 would heavily restrict when federal prosecutors can cite rap lyrics as evidence during a criminal case, mirroring recent efforts in California and New York to limit the increasingly controversial practice. Introduced by U.S. Reps. Hank Johnson (D-Ga.) and Jamaal Bowman (D-NY), the Restoring Artistic Protection Act (RAP Act) would sharply limit when any form of creative or artistic expression could be used as evidence against the person who created it.
(Source: Billboard, July 27, 2022) [Subscription may be required]
So You Want to Sample a Beyoncé Song. Now What?
Obviously, clearing a sample takes more than just asking politely, especially from one of the biggest singers in history. Nikki Marshall, a sync manager who previously ran publishing companies for songwriter-producer Dallas Austin, says you have to consider more than how much a sample costs. “For every song you hear on any digital service provider or radio, there are two parts,” she tells Vulture. “There’s the master recording, which typically a label has ownership or administration rights for. Then there’s the underlying composition, which is the song or lyrics. That is typically controlled by a publisher on behalf of the songwriter.” Marshall notes, in addition to charging an “advance” to utilize the sample, the label will typically ask for a percentage of the new song’s master, and the original songwriters will want a percentage of ownership of the new composition. Stakeholders will then listen to the new song and review its intended use before submitting a quote. During this process, they’ll consider how much of the sample is used in the new song, as well as the sampled song’s market value. Marshall says she tends to see up-front costs for utilizing a sample that are “at least four figures,” while the process itself takes, on average, a couple of weeks.
(Source: Vulture, July 27, 2022)
Stan Lee’s Estate Settles Elder Abuse Suit Against Ex-Business Manager
The four-year legal saga, sparked by The Hollywood Reporter‘s investigation detailing accusations of elder abuse, revolves around an ugly battle over Lee’s estate that includes his daughter, J.C., and people who allegedly manipulated her in efforts to exploit her famous father. Lee accused J.C., his only child and heir to his estate, of verbally abusing him. THR reported that J.C.’s outbursts turned physical at some points in conflicts over money.
(Source: The Hollywood Reporter, July 27, 2022)
FTC Sues to Block Meta’s Bid to Buy Virtual Reality Firm
In a lawsuit filed on July 27, the Federal Trade Commission sued to block Meta, formerly known as Facebook, from buying game developer Within in a bid to limit the company’s reach in the virtual reality market. The complaint advances relatively untested theories arguing that antitrust laws account for actions taken by a firm that isn’t yet a monopolist but is positioned to become one. The legal action potentially indicates a pivot from the agency toward limiting acquisitions by dominant firms in markets for growing technologies.
(Source: The Hollywood Reporter, July 27, 2022)
Managers of Bad Bunny, The Killers Join $3 Million Fundraising for ‘the Legalzoom for the Music Business’
With Creative Intell, artists and related parties will be able to negotiate contracts on a “seamless, secure, real-time environment” platform, the startup said. The platform also streamlines work for lawyers working with top acts, allowing them to free up time for higher-value client issues. Additionally, the platform also provides end-to-end legal solutions for millions of under-represented or under-resourced artists. The services include drafting, negotiating, and signing, as well as data mining and reporting. Creative Intell seeks to help artists avoid typical industry pitfalls and provide educational resources on how they could protect their revenues, it added.
(Source: Music Business Worldwide, July 26, 2022)
Will Streaming Save Sports or Kill It?
Sports and TV have thrived together. Our entertainment future will be shaped by whether streaming and sports can repeat that mostly happy partnership. My colleagues reported recently that Amazon, Apple and Google’s YouTube may be willing to pay billions of dollars for popular sports like the National Football League and the National Basketball Association to move their games from TV to tech streaming services.
(Source: The New York Times, July 26, 2022)
NFL+ Enters Sports Streaming Wars as League Launches New Service
In a launch that NFL commissioner Roger Goodell is calling “an important day in the history of the National Football League,” the TV juggernaut is launching a streaming offering called NFL+ on Monday, hoping to entice fans to subscribe with features built around smartphones and tablets. The first game available on NFL+ will be the Hall of Fame Game on August 4, featuring the Jacksonville Jaguars and Las Vegas Raiders. NFL+ will have two subscription tiers, a base tier for $4.99 per month ($39.99 per year) that includes live local and national primetime games on mobile devices, and out-of-market pre-season games on all devices. The service will also include home, away and national game live audio for every game of the season, and some NFL library programming.
(Source: The Hollywood Reporter, July 25, 2022)
Facebook Will Now Directly Share a Proportion of Ad Revenue With Music Rightsholders for UGC Videos. Your Move, Tiktok…
Here’s how the new system works: Meta has confirmed to MBW that video creators who choose to use licensed music in videos over 60 seconds long on Facebook will receive a 20% share of any advertising revenue generated by their creation. The remaining 80% of that advertising revenue will then be split between the appropriate music rightsholders and Meta itself.
(Source: Music Business Worldwide, July 25, 2022)
Kobalt Is Pulling Its 700,000 Songs off Facebook and Instagram. Is the Music Biz Headed for a Historic Bust-Up With Meta?
According to a memo sent to Kobalt writers and partners, Kobalt’s existing US licensing deal with Meta (parent company of Facebook and Insta) has expired – and the two parties have failed to reach a new agreement.
(Source: Music Business Worldwide, July 24, 2022)
6ix9ine Accused Of Ripping Off Rapper’s ‘SIX9’ Trademark
Rapper 6ix9ine is facing more legal troubles, this time over allegations that his name infringes the trademark rights of another artist who’s used the name “SIX9” since 2007. In a complaint filed July 20, in Manhattan federal court, a South Carolina man named Warren Hamilton claimed that 6ix9ine (real name Daniel Hernandez) “injured and stifled” his career by adopting the similar name in 2017.
(Source: Billboard, July 21, 2022) [Subscription may be required]
SoundCloud, Warner Music Group Strike Deal on Fan-Powered Royalties
Legendary producer T Bone Burnett takes his new Ionic Original discs—a format, he says, that offers the greatest fidelity and durability ever on an analog record.
(Source: Billboard, July 20, 2022) [Subscription may be required]
Bruce Springsteen Fans Furious at Ticket Prices Going as High as $4-5K, Due to Ticketmaster’s ‘Dynamic Pricing’
Bruce Springsteen fans like to think of him as tougher than the rest, not pricier than the rest. So there were inevitable eruptions of anger when fans logged on for the first day of sales for the opening shows on his 2023 arena tour and found tickets going for as as $4,000-5,000 for mid-range floor seats, and into the four-figures for other, less desirable tickets that remained. If these were being offered on the secondary market, offers that exorbitant might be expected… but what gave fans sticker shock was that these were face value tickets, with no middleman jacking up the price.
(Source: Variety, July 20, 2022)
Netflix Loses 970K Subscribers, but Forecasts 1M Gain in Next Quarter
Netflix lost 970,000 subscribers during the second quarter, performing better than its expectations of a 2 million loss, the company disclosed Tuesday. During the first quarter, when Netflix lost 200,000 subscribers and spurred Wall Street and Hollywood to reevaluate the economics of the streaming business, the company warned that it expected to lose an additional 2 million subscribers during Q2. Though the quarter still ended with a net loss in subscribers, the streaming giant is projecting it will add 1 million subscribers in Q3. Netflix now has a total of 220.67 million subscribers, a decrease from the 221.64 million reported at the end of Q1. Revenue hit $7.97 billion for the second quarter, representing a roughly 8 percent year-over-year growth in part due to a “stronger U.S. dollar,” according to Netflix’s letter to shareholders, while net income landed at $1.44 billion.
(Source: The Hollywood Reporter, July 19, 2022)
Netflix Has Agreed to Acquire Animal Logic, the Animation Studio Behind ‘the Lego Movie’
Netflix and Animal Logic are excited to announce today that Netflix plans to acquire the Australian animation studio.* This acquisition will support Netflix’s ambitious animated film slate, building on films like Academy Award-nominated Over the Moon, Academy Award-nominated Klaus and the recently released The Sea Beast.
(Source: The Animal Logic Entertainment, July 19, 2022)
Billboard Explains: Why Concert Tickets Are So Expensive
Actor Sacha Baron Cohen has dropped his lawsuit against a Massachusetts cannabis dispensary that used an image of his character Borat on a billboard without his permission.
(Source: Billboard, July 15, 2022) [Subscription may be required]
Is the Music Catalog Sales Boom Over?
Over the last decade, many big-name artists (Justin Timberlake, Neil Young, Shakira) have sold off parts, if not all, of their recording and publishing rights for headline-grabbing sums of money. Back in 2020, I traced the early origins of this trend to banks financing large-scale music publishing acquisitions since the 80s, and narratives coming out of firms like the Hipgnosis Songs Fund about the potential of the song asset class. However, over the last few months, the foundation of this sales explosion is starting to shake. Persistent rising inflation from the aftermath of the Covid-19 pandemic led the United States Federal Reserve to raise interest rates, both of which represent a marked shift in monetary policy and economic winds that made music catalogs such an appealing opportunity for capital investment.
(Source: Penny Fractions, July 13, 2022)
"A work of art which did not begin in emotion is not art."
Paul Cezanne

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Arnall Golden Gregory LLP | Attorney Advertising

Written by:

Arnall Golden Gregory LLP
Contact
more
less

PUBLISH YOUR CONTENT ON JD SUPRA NOW

  • Increased visibility
  • Actionable analytics
  • Ongoing guidance

Arnall Golden Gregory LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide