American Music Fairness Act of 2025

This bill amends Title 17 of the U.S. Code, specifically Section 106, to grant copyright holders of sound recordings the exclusive right to perform their work publicly via any audio transmission, including terrestrial radio. Currently, terrestrial radio stations are exempt from paying performance royalties for sound recordings, a historical anomaly. This legislation eliminates that exemption, requiring all nonsubscription broadcast transmissions to obtain a license and pay royalties, with rates determined by the Copyright Royalty Board. This change directly reallocates revenue from radio broadcasters to music copyright holders. The money trail is clear: revenue previously retained by terrestrial radio stations will now flow to record labels and artists. The Copyright Royalty Board will establish the royalty rates, which will then be collected and distributed. Major record labels, such as Universal Music Group (UMG), Warner Music Group (WMG), and Sony Music Entertainment (owned by $SONY), stand to gain substantial new revenue streams from these performance royalties. Conversely, large terrestrial radio broadcasters like iHeartMedia ($IHRT) and Sirius XM Holdings ($SIRI), which operates satellite radio but also has significant terrestrial radio interests through its subsidiary Pandora, will incur new, potentially significant, operating costs. Historically, attempts to impose performance royalties on terrestrial radio have faced strong opposition from broadcasters. The 'Fair Play Fair Pay Act' in 2015, which aimed for similar changes, did not pass. While there isn't a direct historical precedent for a bill of this nature passing and its immediate market impact, the introduction of new, significant operating costs for an industry typically results in downward pressure on stock valuations for affected companies. Conversely, new revenue streams for copyright holders generally lead to positive market sentiment for those entities. The current bill has bipartisan sponsorship, including Rep. Darrell Issa (R-CA), a senior member, indicating some legislative momentum. Specific winners include Universal Music Group, Warner Music Group ($WMG), and Sony ($SONY) through its music division, as they will receive new royalty income. Specific losers are terrestrial radio broadcasters, most notably iHeartMedia ($IHRT), which will face increased operating expenses. Sirius XM Holdings ($SIRI) may also see an impact due to its exposure to the broader audio broadcasting market and potential competitive pressures from terrestrial radio's increased costs. What happens next is the bill's progression through the House Committee on the Judiciary. If it passes committee, it moves to a full House vote. If successful there, it proceeds to the Senate. The timeline for such legislation can span months to years, but the initial referral to committee marks the formal start of the legislative process.