MLC Reaches $62 Million Funding Agreement

The Mechanical Licensing Collective (MLC), tasked with tracking, collecting, and distributing mechanical licenses from streaming services in the U.S., has just been granted a $62 million starting budget.

The amount includes $33.5 million in pre-launch startup capital and an additional $28.5 million for first-year operations, which would cover operations during the first year starting in 2021.

All costs will be divided up among licensees, with the largest services paying a greater share.

Interim financing will be provided for the MLC before formal assessment collections begin in 2021.

Established by Music Modernization Act signed into law by President Trump, the MLC is a nonprofit entity designated by the United States Copyright Office to develop and administer a mechanical licensing system that will launch on January 1, 2021.

The MLC will be responsible for collecting and distributing royalties payable to songwriters and copyright owners by digital music services, and for the creation of a first-of-its-kind, public database that will contain critical copyright information on all musical works.

The MLC has also agreed to provide public disclosures, including as to royalty collection and distribution, executive compensation, significant expenses, and projected annual budgets.

A new budgeting advisory committee will also be created, comprised of equal numbers of representatives of the MLC and the DLC that will enhance collaboration in evaluating operating costs.

The committee will provide input on future budgets and modifications to the annual assessment going forward.

It has also been agreed that a streamlined budget adjustments and assessment dispute process will limit the need to turn to the Copyright Royalty Board.

Edited from Billboard