ASCAP And the Department of Justice Agree On New Consent Decree.

Entertainment & Business Editors

NEW YORK--(ENTERTAINMENT WIRE)--Sept. 5, 2000

ASCAP President and Chairman of the Board Marilyn Bergman announced today that ASCAP and the Department of Justice have agreed on a new consent decree which will streamline the government's role in ASCAP's operations.

The current consent decree governs virtually all aspects of ASCAP's operations. This "Amended Final Judgment" or "AFJ", was entered in 1950 and amended in 1960, in the "1960 Order". After such a long a period of time, ASCAP and the Department of Justice both believed it was time to revisit and modernize the decree. After serious consideration and much discussion, the ASCAP Board of Directors voted unanimously to accept the new decree - the "Second Amended Final Judgment", or "AFJ2".

AFJ2 represents changes in two significant areas: ASCAP's membership and distribution rules, and ASCAP's licensing of music users.

Membership and Distribution

AFJ2 abolishes the 1960 Order, which highly regulates ASCAP's membership and distribution rules. That regulation imposes requirements on ASCAP that are not imposed on any other performing rights organization. That is unfair to ASCAP and its members.

Ms. Bergman emphasized, however, that deregulation will not change ASCAP's basic principles. "Because ASCAP is a membership organization," she said, "with a Board of Directors that answers only to its membership, the Board believes firmly in our core values of treating members fairly." Ms. Bergman said the Board believed firmly in a transparent distribution system, uniform application of distribution rules, and freedom for writers and publishers to choose their affiliation without constraint.

Licensing

Many of the basic principles in the AFJ regarding licensing are carried over into AFJ2. Thus, for example, users are entitled to have reasonable fees determined by the Court if they are unable to agree with ASCAP. But there are also many improvements for all concerned:

-- Many previously undefined terms are now defined, such as the terms referring
to the particular types of licenses offered. This will cut down substantially
on needless litigation.

-- Rate proceedings will be greatly streamlined. ASCAP and users have sometimes
been enmeshed in rate proceedings for over a decade, at a huge cost in legal
fees and other expenses, all of which takes money out of the pockets of both
ASCAP's members and users, and unduly occupies the Court. AFJ2 will require
that rate proceedings be ready for trial within one year, with at most a one
year extension, and will simplify other aspects of the proceedings.

-- The licensing provisions take into account new types of music uses, such as
the Internet.

The text of AFJ2 is available on the ASCAP website, www.ascap.com. After the legal process runs its course, ASCAP and the Department will ask the Court to enter AFJ2.