The MLC: This Time We Are missing Payment On Over 170 million Streams For One Of Our Clients…

And We Had To Audit The MLC To Find The Lack Of Payment.

Below is an email from Eric Goldberg, our VP Business Affairs at Word Collections, to The MLC putting them on notice of breach of the regulations of the MMA and its own published “Dispute” policy by not paying earned mechanicals from yet more works and recordings. This time we are missing payment on over 170 million streams (around $100,000) earned by one of our clients for their songs.

Post us submiting the works to The MLC, The MLC sent back an acknowledgment file stating everything was ingested and registered to us. This was a false statement and The MLC withheld the true information that it had not connected all of the recordings of our clients songs to her musical work.

We only discovered The MLC’s lack of proper “registration” after auditing their April 2024 statement.

Note that under the Music Modernization Act (negotiated and written by the National Music Publishing Association (NMPA) ) there are no penalties or repercussion to The MLC for its breach and lack of payment. In addition, this is nothing we can do to “cure” or compel The MLC to abide by the law. The MLC can do whatever it likes and suffer no consequences.

And for any money it does not pay out it becomes eligible to be taken forever from those that earned it and handed disproportionately to Universal, Sony and Warner who sit on the board of directors of the MLC.

See the details below:

Begin forwarded message:

From: “Eric Goldberg” Subject: Word Collections /xxxxxxxx / MLC Nonpayment of Royalties Date: April 30, 2024 at 12:30:57 AM EDT To: “Kris Ahrend” , “Kristen Johns” Cc: “Jeff Price”

Hi Kris and Kristen,

I write concerning our frustration with The MLC’s non-payment of accrued mechanical royalties owed to our client, xxxx xxxx xxxx.

It appears the MLC is in breach of its statutory obligations under the Music Modernization Act (MMA) as well as its own published Dispute Policy.

The MLC’s Dispute Policy defines “conflict” to mean “[a] situation of conflict between two or more Claims with respect to Ownership, including Work overclaims or Share counterclaims.” The MLC’s own system and partial royalty payments confirm that no “conflict” exists concerning the xxxxx xxxxx works currently registered by The MLC to Word Collections.

Using just one of the works Word Collections administers on behalf of xxxxx xxxxx as an example of the larger issues (see attached screen shot), The MLC system shows Word Collections as the sole and exclusive claimant of the work entitled “xxxxxxx” authored by xxxxx xxxxx and embodied in the sound recording associated with ISRC QZDxxxxxxxxx. In addition, in the April 2024 MLC distribution, The MLC paid Word Collections a portion of the mechanical royalties xxxxx xxxxx earned from streams of sound recordings embodying her work “xxxxxxx” (and other works) registered to Word Collections by The MLC. However, The MLC paid Word Collections for the use of “xxxxxx” for only some of the recordings and inexplicably failed to pay Word Collections for the more than 150M streams of “xxxxxx” embodied in the recording identified as ISRC QZDxxxxxxxxx that Word Collections submitted to The MLC in the same CWR file together with the other recordings for which The MLC did remit payment.

If a genuine MLC defined Ownership “conflict” existed with respect to either Work overclaims or Share counterclaims, then The MLC would not have paid anything to Word Collections for the use of any recording embodying “xxxxxxx” or any other of xxxxx xxxxx’s musical works. The fact that The MLC paid anything at all to Word Collections for the use of xxxxx xxxxx’s works embodied in some but not all recordings and ISRCs means that no genuine Ownership dispute impacting xxxxx xxxxx’s works exists. Indeed, as of April 29, 2024 (if not sooner), the musical work entitled “xxxxxxx” authored by xxxxx xxxxx (MLC Song Code RCxxxx) is claimed 100% in the Word Collections account and associated with ISRC QZDxxxxxxxxx.

As such, the right to receive royalties from the use of the works authored by xxxxx xxxxx solely belongs to Word Collections on xxxxx xxxxx’s behalf. There can be no “conflict” when no one else has come forward claiming the right or entitlement to royalties from the use of the work entitled “xxxxxxx”. Xxxxx xxxxx authored and embodied in the sound recording with ISRC QZDxxxxxxxxx.

Further, the MMA provides in relevant part as follows:

• Section 115(d)(3)(E) Musical Works Database. —

(i) Establishment and maintenance of database. — The mechanical licensing collective shall establish and maintain a database containing information relating to musical works (and shares of such works) and, to the extent known, the identity and location of the copyright owners of such works (and shares thereof) and the sound recordings in which the musical works are embodied. In furtherance of maintaining such database, the mechanical licensing collective shall engage in efforts to identify the musical works embodied in particular sound recordings, as well as to identify and locate the copyright owners of such works (and shares thereof), and update such data as appropriate.

• Section 115(d)(3)(I): Musical works claiming process. — When a copyright owner of an unmatched work (or share of a work) has been identified and located in accordance with the procedures of the mechanical licensing collective, the collective shall —

(i) update the musical works database and the other records of the collective accordingly; and

(ii) provided that accrued royalties for the musical work (or share thereof) have not yet been included in a distribution pursuant to subparagraph (J)(i), pay such accrued royalties and a proportionate amount of accrued interest associated with that work (or share thereof) to the copyright owner, accompanied by a cumulative statement of account reflecting usage of such work and accrued royalties based on information provided by digital music providers to the mechanical licensing collective.

Based on the history as outlined in our previous emails, and the fact that xxxxx xxxxx’s works are not in conflict and there are no “duplicate” works in The MLC system, The MLC violated its clear statutory mandate under § 115(d)(3)(E)(i) and § 115(d)(3)(I)(i) to update the musical works database and other records to associate the work entitled “xxxxxxx” and written by xxxxx xxxxx with each of the Word Collections’ supplied thirty-one (31) sound recordings that embody xxxxx xxxxx’s work including the recordings with the ISRC QZDxxxxxxxxx, which has over 150M streams.

The MLC further violated its equally clear statutory mandate under § 115(d)(3)(I)(ii) to pay Word Collections, as xxxxx xxxxx’s administrator of record, such accrued royalties and a proportionate amount of accrued interest associated with the use of sound recordings embodying xxxxx xxxxx’s works. Incredibly, of the thirty-one (31) recordings embodying “xxxxxx” that Word Collections provided via CWR that the MLC confirmed successful ingestion of the provided metadata via its ACK 2 report, The MLC remitted payment to Word Collections for most of the recordings/ISRCs EXCEPT for the recording with ISRC QZDxxxxxxxxx, which has over 150M streams eligible to have been paid in the April 2024 distribution.

There is simply no factual basis for The MLC to withhold payment (or place the payment in suspense) on the grounds of any purported conflict or duplication of claim on the works. Word Collections, along with xxxxx xxxxxxxxxx xxxxx’s attorney and manager, confirmed that xxxxx xxxxx was previously self-published, and further confirmed that fraudulent claims to xxxxx xxxxx’s works had been submitted to The MLC with the wrong songwriter name without xxxxx xxxxx’s knowledge or consent. Word Collections identified itself as xxxxx xxxxx’s exclusive, authorized administrator; and Word Collections successfully submitted all required metadata via CWR as confirmed by the MLC’s ACK 2 report.

Accordingly, absent any good faith basis for The MLC to invoke its Dispute Policy or place the withheld royalties in suspense, we demand the immediate release to Word Collections of all accrued and unpaid mechanical royalties due and owing to our client, xxxxx xxxxx.

Thank you.

- Eric

Eric Goldberg VP of Business Affairs