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
That Don’t Make It Junk: The Proposed “Junk Fee” Ban Will Fundamentally Change Concert Ticketing
On October 11, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule to prohibit so-called “junk fees” in connection with the sale of consumer goods and services. According to the FTC, the proposal, known as the Rule on Unfair or Deceptive Fees (the “Rule”), will regulate and/or prohibit “hidden and bogus fees that can harm consumers and undercut honest business.” Specifically, the Rule aims to regulate the omission of mandatory charges and fees from the listing price and the misrepresentation of the nature and purpose of the charges and fees.
(Source: Arnall Golden Gregory LLP, October 30, 2023)
Industry News
What Lies Ahead for Hollywood? Insiders Weigh In
What comes after peak TV? What’s the next labor battle? Whose stories will still be told? THR asked four Hollywood players from different corners of the industry for their predictions on what a post-strike era might look like.
(Source: The Hollywood Reporter, October 18, 2023)
Netflix’s Ted Sarandos: More Streaming Data Transparency Is Coming
After years of keeping viewing data under lock and key, streamers have become a little more open about sharing numbers publicly in the past two years. Netflix‘s Ted Sarandos says he expects that trend to continue — and also defended the earlier practice as a part of a “promise” to the company’s creative partners. Though most viewing data on streaming series and movies is still unavailable, Netflix releases weekly top 10 lists of its best performing series and movies. Nielsen has been putting out U.S. top 10 lists for three years, and Disney+ has recently begun touting some of its successes as well.
(Source: The Hollywood Reporter, October 18, 2023)
Universal Music Files $75M Lawsuit Against Amazon-Backed AI Firm for Ripping Off Rolling Stones, Beyonce Lyrics
A trio of major music publishers are stepping into the legal battle against generative artificial intelligence to stop the use of their copyrighted material to train AI systems, this time in a lawsuit against Anthropic. Universal Music Group, Concord Music Group and ABKCO sued the company in Tennessee federal court , accusing it of “systematic and widespread infringement” by copying and distributing lyrics from at least 500 songs from artists such as Katy Perry, the Rolling Stones and Beyoncé.
(Source: The Hollywood Reporter, October 18, 2023)
NBC Sports Next Launches SportsEngine Play, a Subscription Streaming Outlet Aimed at Booming Youth and Amateur Sector
NBC Sports Next, a subsidiary of NBC Sports focused on golf as well as youth and amateur sports, has launched a new streaming outlet called SportsEngine Play. The service is billed by the company as the first of its kind, providing a range of live and on demand video of youth and amateur sporting events and filling a void in a growing sector of American corporate and social life. While a number of digital players offer various features for youth and amateur team members and families, the market is fragmented and social media giants hosting youth sports video don’t offer bespoke services. SportsEngine Play, which is created on a foundation built by NBC Sports, is aiming to be a centralized hub for organizations, leagues, coaches and parents.
(Source: Deadline Hollywood, October 17, 2023)
Netflix Sets First Live Sports Event – Golf Tournament With ‘Drive to Survive’ & ‘Full Swing’ Athletes Ahead of Las Vegas Grand Prix
Stars of two Netflix sports series will face off in The Netflix Cup, the streamer’s first live sports event, at a match play tournament next month at the Wynn Golf Club in Las Vegas. Drivers and golfers from Formula 1: Drive to Survive and Full Swing will compete on the 18-hole, championship golf course to kick off the week of the inaugural Formula 1 Heineken Silver Las Vegas Grand Prix. The Netflix Cup will stream live on Netflix at 3 p.m. PT Tuesday, November 14.
(Source: CelebrityAccess, October 17, 2023)
U.S. Venue Association Criticizes Live Nation’s Newest Campaign
The US-based National Independent Venue Association (NIVA) has criticized Live Nation’s (LN) new plan to help touring artists financially. LN recently launched its On The Road Again program, which includes ending the reduction in earnings from merchandise sales at all its US venues. The program will also provide financial support to touring artists for fuel and travel expenses in the coming months. However, NIVA expressed concerns, stating that short-term measures that seem helpful to artists could harm independent venues, which are crucial for many struggling artists.
(Source: CelebrityAccess, October 17, 2023)
NCAA President Shifts Focus to Employment Status of College Athletes During Senate Hearing
At a Senate hearing on Oct. 17, NCAA President Charlie Baker shifted the focus of college sports’ needs toward the looming possibility of athletes being deemed employees of their schools and away from federal legislation to regulate how they can be compensated for their fame. Baker, Big Ten Commissioner Tony Petitti and Notre Dame athletic director Jack Swarbrick were among the witnesses appearing in front of the House Judiciary Committee, the 10th hearing on college sports to be held on Capitol Hill since 2020.
(Source: ABC News, October 17, 2023)
SAG-AFTRA Strike Hangs on $480 Million Gap Between Actors and Studios on Streaming Pay
Talks broke down last week between the major studios and SAG-AFTRA, with the studios saying that the gap between the two sides is “too great” to continue productive negotiations. So how big is that gap? About $480 million a year. That’s the difference between what SAG-AFTRA wants in a new streaming residual formula — $500 million — and what the Alliance of Motion Picture and Television Producers is currently willing to pay — $20 million. The two sides are at odds on other issues as well, including artificial intelligence and increases in minimum rates. But it was the vast gap on streaming residuals that prompted the breakdown in talks.
(Source: Variety, October 17, 2023)
UMPG Launches Subscription-Based Music Library for Content Creators
Universal Music Publishing Group’s Universal Production Music division has launched a new subscription-based service, offering a pre-cleared library 50,000 songs and 200,000 sound effects, starting at $5.99 per month. The new library, called Universal Music for Creators, is aimed at servicing influencers and online talent that need royalty-free music for their videos and podcasts at a low price.
(Source: Billboard, October 16, 2023) [Subscription may be required]
How Disney Brought Back Robin Williams’ Genie for the Animated Short ‘Once Upon a Studio’ — Without Using AI
It took a village of creatives at Disney Animation to pull off “Once Upon a Studio,” the animated short that celebrates 100 years of stories and magic. Iconic characters like Snow White and Peter Pan feature alongside Robin Williams’ Genie in a cast of 543 characters from more than 85 feature-length and short films. And it all came together without any artificial intelligence involved.
(Source: Variety, October 15, 2023)
Federal Trade Commission Wants to Ban “Junk Fees” For Concert Tickets and More
The proposed rule would require all businesses to display every fee and the total price of goods or services upfront, allowing the FTC to slap financial penalties on those who do not comply. The rule would also allow the Consumer Financial Protection Bureau (CFPB) to monitor banks to ensure they are providing basic information such as account balances or payoff amounts for loans free of charge.
(Source: CelebrityAccess, October 12, 2023)
After Fake Drake, New Federal Bill Would Ban AI-Generated Deepfake Vocals
bipartisan group of U.S. senators released draft legislation aimed at protecting musical artists and others from artificial intelligence-generated deepfakes and other replicas of their likeness, like this year’s infamous “Fake Drake” song. The draft bill – labelled the “Nurture Originals, Foster Art, and Keep Entertainment Safe Act, or NO FAKES Act — would create a federal right for artists, actors and others to sue those who create “digital replicas” of their image, voice, or visual likeness without permission.
(Source: Billboard, October 12, 2023) [Subscription may be required]
How Movie Theaters Are Embracing Taylor Swift’s ‘Eras Tour’ Extravaganza: Axing No-Cell Phone Rules, Rushing $1.5 Million Renovations and Merch Galore
For the first time , Marcus Theatres president Gregory Marcus is encouraging moviegoers to keep their iPhones in hand and — gasp — even use them for Taylor Swift‘s “Eras Tour” concert film.
(Source: Variety, October 12, 2023)
Now What? The Five Crises Confronting a Post-Strike Hollywood
The new, post-strike Hollywood is going to be a much leaner one. “This business has now gone through a pandemic, a dual strike and an economic downturn, and the companies have sobered up,” says one agency executive. “The business is getting tougher. For the working-class writer, director, producer, you’re going to see a contraction.” Post-strike Hollywood also is likely to transition from what has been a strange era in the entertainment business, one when success was often divorced from compensation, thanks to the streaming formula of big up-front paydays without the prospect of performance-based rewards — or even information about how a show or film did on a platform. It’s a system, many industry sources say, that led to a lot of crap. “Where was the incentive to stay on budget or make something great?” asks an agency source.
(Source: The Hollywood Reporter, October 11, 2023)
The RIAA Wants AI Voice Cloning Sites Added to the Government’s Piracy Watchlist
The RIAA has asked to have AI voice cloning added to the government’s piracy watch list, officially known as the Review of Notorious Markets for Counterfeiting and Piracy. The RIAA typically writes in each year, requesting forms of piracy like torrenting, stream ripping, cyber lockers and free music downloading to be included in the final list. All of these categories of piracy are still present in the RIAA’s letter to the U.S. Trade Representative this year, but this is the first time the trade organization, which represents the interest of record labels, has added a form of generative AI to their recommendations.
(Source: Billboard, October 11, 2023) [Subscription may be required]
SAG-AFTRA Alleges ‘Bully Tactics’ as Studios Suspend Negotiations
The key stumbling block is a union proposal to share in streaming revenue, which the AMPTP says would cost $800 million a year. SAG-AFTRA said that figure was exaggerated by 60%, and that its proposal would cost the streaming platforms 57 cents per subscriber per year.
(Source: Variety, October 11, 2023)
Google Will Drop Claim That YouTube TV Is ‘$600 Less Than Cable’ After Charter Complaint to Advertising Board
Google said it will no longer claim that YouTube TV is “$600 less than cable” in its advertising, after an industry ad-review board found the assertion was potentially misleading.
(Source: Variety, October 11, 2023)
Will the Grateful Dead Live Forever — Through Merch?
Shortly after Michael Cherman founded his apparel company, Market, in 2016, he designed and sold a tie-dyed T-shirt with the Grateful Dead’s dancing bears spiraling toward a center point. Spotting the trademarked image online, the Dead’s official merchandise company, Rhino Entertainment, contacted him and asked: “Would you like to do this more legit instead of bootlegging it?” “Yes,” he responded, and today, the company’s streetwear products include a $200 Grateful Dead screen-printing kit and a $45 trucker hat with the lightning-skull Stealie Rose logo. “This has unlocked the world for me,” says Cherman, whose company sells clothing licensed from the estates of Bob Marley, Jimi Hendrix and others. “People just came to us and said, ‘Hey, how can you do that for us?’”
(Source: Billboard, October 10, 2023) [Subscription may be required]
Coldplay Countersues Former Manager for $17 Million
Coldplay is countersuing the band’s former manager Dave Holmes for $17 million. As Variety exclusively revealed in August, Holmes filed suit against the Chris Martin-fronted band for over £10 million ($12 million) worth of unpaid commission related to their tenth and eleventh (unreleased) studio albums. Holmes, who had managed the band for over 20 years before quietly parting ways last year, filed his claim in London’s High Court.
(Source: Variety, October 10, 2023)
NCAA Moves Toward Implementing New NIL Rules
In a step toward putting rules in place to regulate the way college athletes can be compensated for their fame, the NCAA Division I Council introduced on Tuesday several proposals to bring transparency to the transactions and oversight of those who want to work with students.
(Source: ESPN, October 3, 2023)
DirecTV Cautions Warner Bros. Discovery Over CNN Max; WBD Says Streamer’s Goal Is To “Reach New Audiences”
In another latest salvo amid tensions between video providers and programmers, DirecTV sent a letter to Warner Bros. Discovery warning that offering CNN as part of its streaming package risks violating the contract between the two companies. CNN’s new CNN Max launched last week on WBD’s Max streaming platform. Unlike its previous (and quickly shuttered) iteration CNN+, CNN Max mirrors much of the schedule of CNN’s traditional cable channel, along with some original programming and the CNN Originals library.
(Source: Deadline Hollywood, October 3, 2023)
Flo Rida, Old Lawsuits & ‘Raging Bull’: Supreme Court’s Big Music Copyright Case Explained
The high court’s eventual ruling, which the justices will issue next spring, will apply to all forms of copyrighted works, but the music industry is paying particularly close attention. In a filing earlier this year, record labels and music publishers called the case “exceptionally important” to their business.
(Source: Billboard, October 3, 2023) [Subscription may be required]
Two-Time IndyCar Champion Alex Palou Sued for at Least $23 Million by McLaren Racing
McLaren Racing is suing IndyCar champion Alex Palou for at least $23 million to recoup costs the team says it lost when the driver reneged on the contract he signed to join the team. Palou, 26, guaranteed that he had “no outstanding obligation under any contract or agreement” that would keep him from joining McLaren after the IndyCar season ended, according to the Sept. 29 filing in the High Court of Justice Business and Property Courts of England and Wales Commercial Court.
(Source: NBC Sports, October 3, 2023)
Hip-hop on Trial: When Can Rappers’ Lyrics Be Used as Evidence in a Criminal Case?
Both federal and state courts have established rules that require the use of a balancing test to determine whether to exclude evidence. If prosecutors can show that a rapper’s lyrics establish motive, intent or identity related to an alleged crime, then most judges will allow for the evidence to be used. Judges are expected to balance whether the proof outweighs any prejudicial value–or tendency to unfairly or improperly influence the jury. For example, under this balancing test, a defendant rapper’s lyrics should be excluded if the lyrics will do more to poison the jury against the defendant than to establish their connection to a specific crime.
(Source: Law.com, September 29, 2023)
A Judge Orders the End of the Conservatorship Between Michael Oher and the Tuohys
A Tennessee judge has ordered the end of the conservatorship between former NFL player Michael Oher and the Tuohy family, all of whom were the subject of the Oscar-winning 2009 film The Blind Side. Shelby County Probate Court Judge Kathleen Gomes said she is ending the 2004 conservatorship, but is not dismissing the case Oher brought against the family in August asking them to provide accounting information for his finances over the years, according to the Associated Press.
(Source: NPR, September 29, 2023)
Canadian Company Acquires Atlanta Film Studio Known for ‘Stranger Things’
A Canadian company has bought the Atlanta film studio where much of Netflix’s “Stranger Things” was produced. Toronto-based Cinespace Studios acquired EUE/Screen Gems Studios, located in Southwest Atlanta near Lakewood Amphitheatre. Terms of the deal, which also included another EUE/Screen Gems location in Wilmington, North Carolina, were not disclosed.
(Source: Atlanta Business Chronicle, September 28, 2023)
NIVA Calls Out Live Nation for Its ‘Calculated Attempt’ to Divert Artists From Independent Venues
NIVA (National Association of Independent Venues) is pushing back against Live Nation’s announcement that its clubs will give $1,500 in cash gas and travel stipends to each headliner and support act on top of their performance compensation. Many in the industry applauded the new “On The Road Again” program yesterday, but NIVA points out that it will also hurt independent venues critical to local music scenes and local economies.
(Source: hypebot, September 27, 2023)
Liberty Media Proposes Merger With Radio Broadcaster SiriusXM
Billionaire John Malone’s Liberty Media is looking to combine the business that contains its stake in SiriusXM with the rest of the radio company, in a deal to create a publicly listed firm controlled by the conglomerate. The proposal aims to spin off Liberty SiriusXM Group or LSXM, the group through which it owns a 83% stake in SiriusXM, into a new unit that would merge with the radio company.
(Source: CNBC, September 26, 2023)
Netflix, Max, Disney and More Form Streaming Industry Trade Alliance
Several major streaming services, including Netflix, Max and The Walt Disney Co., have formed a trade alliance to advocate for federal and state policies that benefit the streaming industry. At launch, other members of the Streaming Innovation Alliance include AfroLandTV, America Nu Network, BET+, discovery+, For Us by Us Network, MPA, MotorTrend+, Paramount+, Peacock, PlutoTV, Telemundo, Televisa Univision, Vault TV and Vix. Former Republican Rep. Fred Upton and former Democratic acting FCC chair Mignon Clyburn are the senior advisers for the coalition.Charles Rivkin, chairman and CEO of the Motion Picture Association, helped bring the parties together.
(Source: The Hollywood Reporter, September 26, 2023)
New WGA Contract Explained: AI Is Not a Writer, Solo Scribe Shows Don’t Need Minimum Staff and More
The WGA emerges from the long slog of a strike and difficult contract talks with a deal that is far richer and more comprehensive than most industry observers would have predicted last spring when the fitful negotiations began. In short, the scribe tribe’s sacrifice of mounting a 148-day work stoppage — coupled with the extra pressure heaped on when SAG-AFTRA went out on strike July 14 — gave the WGA the leverage it needed to power through its agenda.
(Source: Variety, September 26, 2023)
Live Nation to Drop Merch Fees for Club-Sized Venues, Offers $1,500 Artist Stipends
Live Nation has announced it will no longer take cuts of merchandise sold by artists playing any of its club-sized venues. What’s more, through the end of the year, the company will offer $1,500 stipends per show to all headlining and support acts. The decision arrives as part of a new developing-artist program the company has launched with country legend, Willie Nelson. The program, dubbed “On the Road Again” in honor of Nelson, is designed to give a helping hand to smaller, developing artists, who have faced increased economic difficulties in recent years. Now, not only have merchandise fees — which have been known to eat up to 15% – 30% of an artist’s merch sales — been removed, but artists will receive an additional $1,500 stipend to cover “gas and travel,” and crews, local promoters, tour reps, and more will all be doled out unspecified bonuses.
(Source: CONSEQUENCE, September 26, 2023)
SAG-AFTRA Members Vote in Favor of Video Game Strike Authorization
SAG-AFTRA members have voted to authorize a strike against the video game industry. The vote was 98.32% in favor of the strike authorization against 10 major video game companies, with 34,687 members casting ballots, representing 27.47% of eligible voters. While the authorization does not guarantee a work stoppage will occur, the vote permits union negotiators to call for a strike for a new Interactive Media Agreement if necessary.
(Source: Variety, September 25, 2023)
Wall Street Plays Ball: Sports Leagues in Demand for Investors
“With the media industry increasingly fragmenting, there is clearly scarcity value for premium IP companies,” wrote Bank of America’s Jessica Reif Ehrlich on Aug. 28. “We believe TKO reflects an opportunity to own a quasi-sports league with robust year-round programming and an attractive financial profile that offers sizable revenue/cost savings.”
(Source: The Hollywood Reporter, September 24, 2023)
‘Is It Good Enough to Fool My Gallerist?’
Of the many young artists David Salle has mentored, none were ever as challenging as his latest student, who cannot hold a paintbrush or a conversation. “The mountain looks too airbrushed,” Salle informed the algorithm that lives inside his iPad. The landscape painting it had produced, based on hundreds of his own artworks, was typically generic, lacking in depth. But the next one succeeded, depicting a valley stream with expressionistic wisps and a sense of volume.
(Source: The New York Times, September 22, 2023)
The IRS Is Going to Know if You Sold Taylor Swift ‘Eras’ Tickets
If you cashed in this summer by reselling tickets to Taylor Swift’s “Eras Tour” or Lionel Messi’s first games in a bubblegum-pink jersey, brace yourself to pay taxes. A new law requires ticketing platforms like Ticketmaster and StubHub to give the Internal Revenue Service information on users who sold more than $600 worth of tickets this year. The new requirements are taking hold amid a banner year for live events in which Swifties, soccer buffs and members of Beyoncé’s BeyHive paid sky-high prices for a chance to see their favorite stars in the flesh. That drove huge markups in the secondary ticket market—and delivered hefty profits to anyone hawking hot tickets.
(Source: The Wall Street Journal, September 22, 2023)
Amazon to Bring Commercials Into Prime Video
Amazon announced that its Prime Video service will feature limited ads beginning in early 2024 (an exact date for the rollout is to be determined). What’s more, the ad tier will be the default option for Prime Video, which is included in an Amazon Prime membership along with free shipping on packages, Amazon Music and other perks. The company says the price of a regular Prime subscription won’t rise next year, but users who want to continue watching Prime Video without commercials will have to pay an extra $2.99 per month. Amazon will alert users a few weeks ahead of the introduction of ads on Prime Video with instructions on how to sign up for ad-free viewing.
(Source: The Hollywood Reporter, September 22, 2023)
Top Authors Join Lawsuit Against OpenAI Over “Mass-Scale Copyright Infringement” of Novels
The leading trade group for authors has entered a legal battle against OpenAI over its human-mimicking chatbot in a case that could decide the legality of using copyrighted works to train AI systems. The Authors Guild — led by prominent fiction authors including George R.R. Martin, Jonathan Franzen and John Grisham — on Tuesday sued OpenAI, accusing the company of engaging “in a systematic course of mass-scale copyright infringement” to “power their lucrative commercial endeavor.” The proposed class action filed in New York federal court builds upon arguments from creators who have already initiated lawsuits against AI firms that generative AI illegally produces infringing works that directly compete with their creations.
(Source: The Hollywood Reporter, September 20, 2023)
Protecting Songwriters in the Age of AI
At ASCAP, we have developed six guiding principles for AI and we need Congress to act to uphold them: (1) Human Creators First, prioritizing rights and compensation for human creativity; (2) Transparency, in identifying AI vs. human-generated works and retaining metadata; (3) Consent, protecting the right for creators to decide whether their work is included in an AI training license; (4) Compensation, making sure creators are paid fairly when their work is used in ANY way by AI, which is best accomplished in a free market, NOT with government-mandated licensing that essentially eliminates consent; (5) Credit, when creators’ works are used in new AI-generated music; and (6) Global Consistency, an even playing field that values intellectual property across the global music and data ecosystem.
(Source: Billboard, September 20, 2023) [Subscription may be required]
Electric Zoo Organizers Facing Class Action Lawsuit After Contentious 2023 Festival
Two plaintiffs have filed a class action lawsuit against the organizers of Electric Zoo 2023, Rolling Stone reports. Following the contentious cancellation of the electronic music festival’s opening day on Randall’s Island due to “global supply chain disruptions,” its third and final day was plagued by capacity concerns. After organizers released a midday statement announcing they were denying entry to the grounds, videos of ticket-holders storming the festival’s gates flooded social media.
(Source: EDM.com, September 14, 2023)
It’s not what you look at that matters, it’s what you see.
—
Henry David Thoreau