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HR861 (American Music Fairness Act) is in early legislative stages — referred to committee since January 2025. It would impose a new performance royalty on terrestrial radio (creating costs for iHeartMedia) while creating a new revenue stream for record labels like Warner Music Group. The bill faces strong industry opposition and has 13 cosponsors, indicating low near-term passage probability.
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The direct market implication of HR861 is limited to the radio broadcasting and recorded music sectors. iHeartMedia ($IHRT at $5.83) faces a structural cost headwind if the bill advances, though its recent 30-day rally of +99.66% appears unrelated to legislative fundamentals. Warner Music ($WMG at $27.86) would gain a new royalty stream, but the stock has declined 7.9% over the past 13 days from $30.25, suggesting the market is not pricing in this bill's passage. Sony Group ($SONY at $19.72) has the same structural tailwind through its Sony Music division but the stock's 30-day decline (-4.73%) and proximity to its 52-week low indicate investor focus on other factors (electronics, gaming, FX). Investors should not expect material stock moves from this bill until it shows clear committee advancement or bipartisan sponsorship growth.
WHAT HAPPENED: On January 31, 2025, Rep. Issa introduced HR861, the American Music Fairness Act of 2025. The bill would amend Title 17 to eliminate the century-old exemption that allows terrestrial AM/FM radio stations to play sound recordings without paying the copyright holder (record labels and artists). Currently, only digital audio transmissions (SiriusXM, Spotify) pay these royalties. The bill is in the House Judiciary Committee with 13 cosponsors. A companion bill (S326) exists in the Senate.
MONEY TRAIL: This bill does NOT authorize or appropriate any funding — it imposes a regulatory mandate. The mechanism is a statutory license: terrestrial broadcasters would need to obtain a license and pay rates set by the Copyright Royalty Board (CRB) to publicly perform sound recordings. The CRB would determine rates based on market factors, including the promotional value of radio airplay. The bill includes a special provision for small broadcasters (revenue under $1.5M) to pay reduced rates or a flat $500/year fee.
STRUCTURAL WINNERS AND LOSERS: Losers — Terrestrial radio broadcasters, led by iHeartMedia ($IHRT). iHeart is the largest station owner (~850 stations) and derives essentially 100% of its revenue from advertising on terrestrial radio. New royalty costs directly hit EBITDA. Winners — Record labels: Warner Music Group ($WMG), Sony Music ($SONY), and Universal Music (privately held). These labels currently receive $0 for terrestrial radio plays; a CRB-determined royalty could add $1-2B industry-wide annually. SiriusXM ($SIRI) already pays performance royalties for its satellite service and would see competitive parity with terrestrial radio — neutral to slightly positive.
REAL MARKET DATA ANALYSIS: iHeartMedia ($IHRT) has rallied sharply from $4.01 on April 23 to $5.83 on April 30 (+45% in one week) and +99.66% over 30 days. This move is inconsistent with the bill stalling in committee — likely driven by other factors (earnings, debt restructuring, or retail momentum). Warner Music ($WMG) has declined from $30.25 on April 17 to $27.86 (-7.9% in 13 days), a 30-day gain of +9.08% largely due to earlier-month strength. Sony ($SONY) shows a 30-day decline of -4.73% and sits at $19.72 near its 52-week low of $19.63. The data shows no correlation between HR861 activity and stock performance — the bill has not moved since January.
TIMELINE: This is early-stage legislation. It needs to pass the House Judiciary Committee, then the full House, then the Senate (with companion bill S326), then be signed by the President. The 119th Congress runs through 2027. The current 13 cosponsors (all from January 2025) indicate limited new momentum. Opposition from the National Association of Broadcasters is strong. Passage probability in the current Congress is low to moderate — likely less than 30%.
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