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
NIL Compensation or Salary? Depends on the Contract
As name, image, and likeness (“NIL”) deals dominate high school and collegiate sports, it is increasingly important to have an airtight contract for high school and college athletes to preserve NCAA eligibility. Just ask Matt and Ryan Bewley, twin brothers and former five-star basketball recruits from Fort Lauderdale, Florida. The NCAA deemed the brothers ineligible to play college basketball at Chicago State University, an NCAA member, for the ’23-’24 season based on a few words in the contracts they signed in 2021.
(Source: Arnall Golden Gregory LLP, March 20, 2024)
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Taxing Digital Audio-Visual Products: The Evolution of Sales Taxation in the Digital Economy
As the digital economy continues to expand, the rise of digital content also transforms the traditional models of how artists and consumers sell and purchase art. Instead of renting a VHS at your local film shop, a family can stream it instantly without leaving their home. Small businesses can utilize accounting software directly from the cloud, without ever needing to purchase a CD. These small, but monumental, changes have not only impacted how we consume software, media, and art, but they have also altered how states and localities seek to tax these goods.
(Source: Arnall Golden Gregory LLP, March 20, 2024)
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A Trio of Decisions on the Copyrightability of AI-Drawn Art Should Prompt Artists to Stress Human Involvement If They Hope to Generate a Copyright
AGG Litigation & Dispute Resolution attorney Chase Ogletree authored an article titled “A Trio of Decisions on the Copyrightability of AI-Drawn Art Should Prompt Artists to Stress Human Involvement If They Hope to Generate a Copyright” for the May-June 2024 issue of The Journal of Robotics, Artificial Intelligence & Law.
(Source: The Journal of Robotics, Artificial Intelligence & Law, March 4, 2024)
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Industry News
Clemson vs. ACC Exit Fees Lawsuit Explained
Clemson became the second school to sue the ACC in state court in an effort to extricate itself from onerous exit fees and a grant of rights that runs for another 12 years. The lawsuit, filed in Pickens County, South Carolina, on March 19, follows a similar blueprint to the one filed by Florida State in Tallahassee in December. Both aim to challenge the veracity of the league's grant of rights, while the ACC's countersuit in North Carolina looks to uphold the agreement.
(Source: ESPN, March 19, 2024)
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Kobalt’s New Credit Facility, Securitization Give It Over $1 Billion For Dealmaking
Kobalt Music Group, the publishing home to such names as Paul McCartney and Karol G, has landed a new $450 million revolving credit facility (RCF), the independent music publisher announced March 19. Coupled with the previously announced joint venture with Morgan Stanley and $266.5 million asset-backed securitization (ABS) transaction, these financial maneuvers provide Kobalt with over $1 billion in funding for acquisitions and investments.
(Source: Billboard, March 19, 2024) [Subscription may be required]
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European Union Passes ‘World First’ AI Legislation That Would Safeguard Copyrighted Music
Sweeping new laws regulating the use of artificial intelligence (AI) in Europe, including controls around the use of copyrighted music, have been approved by the European Parliament, following fierce lobbying from both the tech and music communities. Members of the European Parliament (MEPs) voted in favor of the EU’s Artificial Intelligence Act by a clear majority of 523 votes for, 46 against and 49 abstentions. The “world first” legislation, which was first proposed in April 2021 and covers a wide range of AI applications including biometric surveillance and predictive policing, was provisionally approved in December, but Wednesday’s vote formally establishes its passage into law.
(Source: Billboard, March 13, 2024) [Subscription may be required]
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Billy Preston Documentary Hit With Fraud Lawsuit by Sam & Dave Singer and Others Ahead of SXSW Premiere
“Instead of creating the film that they falsely described to Plaintiffs, Defendants White Horse Pictures, LLC, Homegrown Pictures, Inc. and Oyster Productions, LLC, by and through their principals and representatives Defendants Nigel Sinclair, Jeanne Elfant Festa, Stephanie Allain Bray, Paris C.K. Barclay and Cheo Hodari Coker (collectively, ‘Defendants’), produced a film that is a salacious, posthumous ‘outing’ of Mr. Preston that centers on his sexuality – a deeply personal matter that Mr. Preston kept private until immediately before his untimely death – to the exclusion of many of the late musician’s notable accomplishments,” reads the fraud complaint filed today in Los Angeles Superior Court by Rock and Roll Hall of Famer Sam Moore of Sam & Dave, Preston Music Group, Ken Burke and others.
(Source: Deadline, March 12, 2024)
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Is the Music Business Out of Synch With Game Developers?
When 21-year-old singer ericdoa released the song “>one” last March, he had an unusual collaborator: Valorant. That’s not another artist; it’s a popular shooter game that attracted millions of players in February. Riot Games, the company behind Valorant, used “>one” — which references the game in its lyrics — in a trailer that introduced a playable character named Gekko. The track is now ericdoa’s second-most-popular song on Spotify, with over 36 million streams. “That was a huge spiritual win,” says Maria Egan, global head of music and events for Riot Games. “Can we do that over and over again?” she asks. “How do we unlock our platform and other gaming platforms to be the new place that new artists can find audiences?”
(Source: Billboard, March 12, 2024) [Subscription may be required]
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US Appeals Court Lets Lizzo Keep $5 Million From Festival That Never Happened
A US appeals court has upheld a ruling that allows Lizzo to keep the $5 million she received from the COVID-cancelled LA Virgin Fest, which she was due to headline in 2020. Ellie Goulding and Kali Uchis - repped by the same agents - can also keep the million dollars they were collectively paid, after appeal judges accepted the artists' interpretation of a force majeure clause in their contacts with the festival. A force majeure clause sets out what happens if extraordinary circumstances - such as a global pandemic - impact on the delivery of a contract. When the COVID lockdowns forced festivals to cancel, many artists returned any fees they had already been paid because of those clauses in their contracts. But agents for Lizzo - who had already received her ridiculously high LA Virgin Fest fee in a deposit payment before the event - argued that an amendment made to the force majeure clause in her contract meant she could keep the cash. And the Californian appeals court agrees.
(Source: Complete Music Update, March 11, 2024)
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How Rising Visa Fees Could Stifle New Music Discovery in the U.S.: ‘It’s Grossly Unfair’
Beginning April 1, immigration and visa entry costs for international artists playing festivals, concerts or label events in the U.S. are set to rise even higher. The fees for filing “O” and “P” visa petitions — the former covers “individuals who possess extraordinary ability,” the latter “internationally renowned performing groups” and music ensembles of up to 25 people — will increase from $460 to maximum costs of $1,655 and $1,615, respectively. That price includes a $600 Asylum Program Fee, which the U.S. Citizenship and Immigration Services (USCIS) will use to offset the costs of adjudicating cases of immigrants seeking asylum from persecution and violence — a process unrelated to the music business.
(Source: Billboard, March 11, 2024) [Subscription may be required]
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MusicWatch Reports Results of 2023 Annual Music Study: Record Numbers of Music Streamers and Paid Subscribers
MusicWatch today published its 22nd edition of the US Annual Music Study, the most comprehensive overview of audio and music purchasing and listening in the US. MusicWatch shared a “bakers dozen” of facts and findings from the study.
(Source: MusicWatch, March 11, 2024)
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You Can Now Buy Shares in Music by Beyoncé or Taylor Swift
A startup is offering securities backed by the royalty streams from songs recorded by such artists as Beyoncé, Taylor Swift and the pop-rock band OneRepublic. Its goal is to bring music investing to the masses. JKBX, pronounced “jukebox,” opened its new marketplace after the Securities and Exchange Commission signed off on its first offering last week. Individual investors can visit its website to buy slices of the income generated by dozens of songs—effectively, bonds backed by beats.
(Source: The Wall Street Journal, March 6, 2024)
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Tennessee Nonprofit Files Suit on Behalf of Roberto Clemente Family in Trademark Case
The Beacon Center of Tennessee has filed a lawsuit on behalf of baseball legend Roberto Clemente's family which could have ramifications for Americans nationwide. Roberto Clemente's legacy isn't just as one of baseball's best players in history, he was also a dedicated humanitarian who used his platform to help others. In fact, he died in a plane crash in 1972 delivering aid to Nicaragua. However, Clemente had his name trademarked years earlier in 1955, a trademark which was held by his family after his death. The lawsuit centers around Puerto Rico's decision in 2022 to issue commemorative license plates celebrating the 50th anniversary of Clemente's 3,000th hit which resulted in $15 million in revenue for the U.S. Commonwealth. The family asked Puerto Rico Governor Pierluisi-Urrutia to halt the plan to no avail and the family received nothing as a result of their trademark use.
(Source: Fox 17, March 5, 2024)
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IATSE, Teamsters & Hollywood Basic Crafts Begin Contract Talks With Studios: Here’s What to Expect
From one “hot labor summer” to the next: Below-the-line workers will sit down with the Hollywood studios Monday to begin talks for new film and TV contracts. All eyes, metaphorically speaking, are on the Alliance of Motion Picture and Television Producers‘ Sherman Oaks offices, as IATSE and the Hollywood Basic Crafts link arms to discuss pension and health plans — the first step in a lengthy negotiation process that likely will extend well into the summer.
(Source: Deadline Hollywood, March 4, 2024)
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Apple Hit With Landmark $2 Billion EU Antitrust Fine
The European Union has fined Apple €1.84 billion ($2 billion) for breaking its competition laws. The bloc announced that it was imposing the fine on Apple its first-ever antitrust penalty on the US tech giant for preventing rival music streaming services such as Spotify from telling iPhone users that they could find cheaper ways to subscribe outside of Apple’s app store.
(Source: CNN, March 4, 2024)
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Netflix Fight Night: Mike Tyson to Battle Jake Paul in “Boxing Mega-Event” Streaming Live in July
Netflix is getting into combat sports in a major way, picking up what it is calling a “boxing mega-event” that will see the controversial former heavyweight champion Mike Tyson face off against YouTuber-turned-fighter Jake Paul. Paul’s Most Valuable Promotions is partnering with Netflix on the event, which will stream live on the platform July 20 from AT&T Stadium in Dallas. The match will be included for all Netflix subscribers (many other boxing bouts still use a pay-per-view model), though tickets will be sold to fill the 80,000-seat arena. There will also be a co-main event and undercard bouts.
(Source: The Hollywood Reporter, March 4, 2024)
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Trademark Dispute Over Earth, Wind & Fire Tribute Shows Back in Court
A dispute over tribute concerts that feature musicians who previously performed with Earth, Wind & Fire is back in court. The company that manages the band's brand reckons that the way those shows were billed - initially as the ‘Earth, Wind & Fire Legacy Reunion’ - confused fans and even venues into thinking that they were official concerts, when they were not. In fact, the confusion was "tremendous', a legal rep claimed.
(Source: Complete Music Update, February 29, 2024)
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Kanye West Sued by Donna Summer Estate Over ‘Vultures 1’ Song
The estate of Donna Summer filed a copyright lawsuit against Kanye West on Tuesday (Feb. 27), accusing him of “shamelessly” using her 1977 hit “I Feel Love” without permission in his song “Good (Don’t Die).” In a complaint filed in Los Angeles federal court, Summer’s estate made good on public allegations earlier this month that claimed West had infringed the copyright to her song by interpolating it in “Good,” which he released on his chart-topping Vultures 1 album.
(Source: Billboard, February 27, 2024) [Subscription may be required]
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Amazon Studios Hit With ‘Road House’ Copyright Infringement Lawsuit Involving AI Abuse Claims
A legal fight is brewing over the upcoming Road House remake, with the original film’s screenwriter suing Amazon Studios. R. Lance Hill, in a lawsuit filed Tuesday in California federal court, accuses MGM Studios and its parent, Amazon, of copyright infringement for refusing to license his 1986 screenplay after he allegedly clawed back the rights to his work. He seeks a court order blocking the release of the movie. According to the complaint, Amazon instituted a self-imposed deadline to complete the remake. To meet this deadline, which was threatened by the actors strike, the suit claims Amazon resorted to using generative artificial intelligence to replicate the voices of the movie’s actors in violation of the collective bargaining agreements of SAG-AFTRA and the Director’s Guild of America.
(Source: The Hollywood Reporter, February 27, 2024)
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Musicians, Studios Reach Tentative Deal on Contract With Streaming Residuals, AI Gains
The American Federation of Musicians has reached a tentative agreement with the Alliance of Motion Picture and Television Producers as of Friday. The agreement, which concerns basic theatrical motion picture and basic television motion picture contracts, comes with “historic breakthroughs” on streaming residuals and protections against AI, according to AFM. The agreement is unanimously recommended by the bargaining committee.
(Source: The Hollywood Reporter, February 23, 2024)
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Tyler Perry Puts $800M Studio Expansion on Hold After Seeing OpenAI’s Sora: “Jobs Are Going to Be Lost”
Over the past four years, Tyler Perry had been planning an $800 million expansion of his studio in Atlanta, which would have added 12 soundstages to the 330-acre property. Now, however, those ambitions are on hold — thanks to the rapid developments he’s seeing in the realm of artificial intelligence, including OpenAI’s text-to-video model Sora, which debuted Feb. 15 and stunned observers with its cinematic video outputs. “Being told that it can do all of these things is one thing, but actually seeing the capabilities, it was mind-blowing,” he said in an interview with The Hollywood Reporter on Thursday, noting that his productions might not have to travel to locations or build sets with the assistance of the technology.
(Source: The Hollywood Reporter, February 22, 2024)
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Major Labels’ $1B Piracy Verdict Against Cox Communications Overturned by Appeals Court
A federal appeals court has overturned a massive $1 billion copyright verdict won by the major record labels against internet service provider Cox Communications, sending the case back for a new award to be calculated. In a decision on Feb. 20, the U.S. Court of Appeals for the Fourth Circuit vacated the huge award against Cox over illegal downloading by its subscribers — one of the largest ever in an intellectual property lawsuit — on the grounds that part of the verdict was not supported by the law. The ruling sets the stage for a new trial, but Cox could still be on the hook for heavy damages. That’s because, while the appeals court overturned the jury’s decision that Cox committed so-called vicarious copyright infringement, it affirmed that the internet service provider (ISP) had still committed a different type of infringement.
(Source: Billboard, February 20, 2024) [Subscription may be required]
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Birdie Bill Would Expand Copyright Protections to Golf Courses
A new bill introduced in Congress would amend federal law to extend copyright protection to golf courses. The bill arrives at a time when golf courses and holes can be replicated with limited legal risk and as golf simulators become more able to replicate the look and feel of the real thing. U.S. Reps. Brian Fitzpatrick (R-PA) and Jimmy Panetta (D-CA) are cosponsors of H.R. 7228. Dubbed the “Bolstering Intellectual Rights against Digital Infringement Enhancement Act” or the “BIRDIE Act,” the bill was introduced on Feb. 5.
(Source: Sportico, February 19, 2024)
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Amazon Sued Over Prime Video Ads: Class-Action Complaint Accuses Tech Giant of ‘Immoral, Unethical, Oppressive, Unscrupulous’ Conduct
At least one Amazon Prime member is furious over the ecommerce company’s move to start playing ads in Prime Video programming — unless customers pay an extra monthly fee. A lawsuit seeking class-action status accused Amazon of false advertising and deceptive practices because Prime Video now serves commercials by default.
(Source: Variety, February 14, 2024)
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Art washes away from the soul the dust of everyday life.
—
Pablo Picasso
