Electronically Filed Public Version Docket: 14-CRB-0011-SD (2010-2013) Filing Date: 03/22/2019 08:23:18 PM EDT Before the COPYRIGHT ROYALTY JUDGES The Library of Congress ) In re ) DISTRIBUTION OF SATELLITE ) CONSOLIDATED PROCEEDING ROYALTY FUNDS ) NO. 14-CRB-0011-SD (2010-13) ) ) ) WRITTEN DIRECT STATEMENT OF THE SETTLING DEVOTIONAL CLAIMANTS VOLUME I Arnold P. Lutzker, Esq. (D.C. Bar No. 101806) [email protected] Benjamin Sternberg (D.C. Bar No. 1016576) [email protected] LUTZKER & LUTZKER LLP 1233 20th Street, NW, Suite 703 Washington, D.C. 20036 Telephone: 202-408-7600 Fax: 202-408-7677 Matthew J. MacLean (D.C. Bar No. 479257) [email protected] Michael A. Warley (D.C. Bar 1028686) [email protected] Jessica T. Nyman (D.C. Bar No. 1030613) [email protected] PILLSBURY WINTHROP SHAW PITTMAN LLP 1200 Seventeenth Street, NW Washington, D.C. 20036 Telephone: 202-663-8525 Fax: 202-663-8007 Counsel for Settling Devotional Claimants Public Version Before the COPYRIGHT ROYALTY JUDGES The Library of Congress ) In re ) DISTRIBUTION OF SATELLITE ) CONSOLIDATED PROCEEDING ROYALTY FUNDS ) NO. 14-CRB-0011-SD (2010-13) ) ) ) WRITTEN DIRECT STATEMENT OF THE SETTLING DEVOTIONAL CLAIMANTS Pursuant to 17 U.S.C. § 803(b)(6), Section 351.4 of the rules of the Copyright Royalty Judges (“Judges”), 37 C.F.R. § 351.4, and the Judges’ November 2, 2018 Order Adopting Satellite Allocation Phase Procedural Schedule, the Settling Devotional Claimants (“SDC”) submit the attached testimony in connection with the above-referenced proceeding to allocate shares of the 2010-2013 satellite royalty funds (“2010-2013 Satellite Funds”) among the four parties participating in this proceeding. The purpose of this memorandum is to summarize the written testimony of the SDC, to designate prior testimony, and to state the SDC’s claim for the Devotional claimant category. I. SUMMARY OF TESTIMONY A. Testimony of Dr. William J. Brown Dr. William J. Brown is a Professor and Research Fellow at the School of Communication and the Arts at Regent University in Virginia Beach, Virginia, and a former Dean of the School. He is also a partner in Brown Fraser & Associates, a consulting firm in Chesapeake, Virginia. Dr. Brown has studied the content and viewership of many different kinds of religious television programs, and over the past 25 years has conducted more than 300 studies on religious television Public Version viewing in more than 40 nations. Dr. Brown will discuss his extensive research regarding the evolution of devotional programming, as well as methodologies used to study and value television programming (particularly quantitative, qualitative and historical-critical approaches). He will also address the factors for assessing the relative marketplace value of Devotional claimants’ programming and identify the most appropriate measure for allocating the 2010-2013 Satellite Funds among the four claimant categories. B. Testimony of John Sanders John Sanders is a principal in Bond & Pecaro, Inc., a Washington, D.C.-based firm that specializes in the appraisal of communications and media assets. Mr. Sanders has actively participated in the appraisal of more than 3,000 communications and media businesses. Much of his work has focused on the television and cable industries and the appraisal of intangible assets, such as syndicated and feature film television programming, customer and subscriber- based assets, advertiser relationships, and customer lists. Mr. Sanders will discuss the value of Devotional programming in the context of allocation of the 2010-2013 Satellite Funds and offer his professional opinions regarding the appropriate methodology for awarding the 2010-2013 Satellite Funds and the shares that should be accorded the Devotional claimant category for each of the years in contest. C. Testimony of Toby Berlin Toby Berlin is the President and Founder of the School of Toby, Inc., a media consulting business. At School of Toby, Ms. Berlin provides consulting expertise in the cable, satellite, and over-the-top industries. Since 2014, Ms. Berlin has served as a special consultant to Sony Interactive Entertainment to assist its development of an Internet multichannel video distribution platform. Prior to founding School of Toby in 2013, Ms. Berlin was an executive at DIRECTV 2 SDC WRITTEN DIRECT STATEMENT – 14-CRB-0011-SD (2010-13) Public Version and served as Vice President of Programming Acquisitions and, among other responsibilities, managed DIRECTV’s sourcing and negotiations for programming acquisitions across numerous program categories. Ms. Berlin will offer her professional opinions regarding the MVPD industry (including the nature of competition between cable systems and satellite carriers), the value satellite carriers placed on categories of programming relevant to the 2010-2013 period, and factors to consider in the allocation of shares in this proceeding. D. Testimony of Erkan Erdem, Ph.D. Dr. Erdem is a Managing Director at KPMG LLP in the Economic and Valuation Services (“EVS”) practice and teaches graduate-level econometrics at the University of Maryland as an adjunct professor in the Masters in Applied Economics program. He received a Bachelor of Science in Mathematics and Bachelor of Arts in Economics from Koç University in Istanbul, Turkey, and subsequently earned a Ph.D. in Economics from The Pennsylvania State University. Prior to joining KPMG, he worked as an antitrust economist for the economic consulting firm Bates White, LLC and as an economist for IMPAQ International, a research and consulting firm. Dr. Erdem has an impressive background providing expert analyses on economic and statistical matters. Dr. Erdem will provide analyses demonstrating the most appropriate methodology for measuring the relative market value of a program and allocating 2010-2013 Satellite Funds between the four claimant categories at issue in this proceeding. E. Testimony of Professor Daniel L. Rubinfeld Professor Rubinfeld is the Robert L. Bridges Professor of Law and Professor of Economics Emeritus at the University of California, Berkeley and Professor of Law at New York University. He received an A.B. degree in mathematics from Princeton and a Ph.D. from MIT in economics. Professor Rubinfeld previously taught at the University of Michigan in the economics department, 3 SDC WRITTEN DIRECT STATEMENT – 14-CRB-0011-SD (2010-13) Public Version the Public Policy School, and the law school, and served from June 1997 through December 1998 as chief economist and Deputy Assistant Attorney General for Antitrust in the U.S. Department of Justice. In addition to authoring a variety of articles relating to antitrust and competition policy, law and economics, public economics, and quantitative methods, as well as two textbooks (Microeconomics and Econometric Models and Economic Forecasts), Professor Rubinfeld has consulted for private parties and public agencies, including the Federal Trade Commission, the Antitrust Division of the Department of Justice, and various State Attorneys General. Professor Rubinfeld will provide an in-depth evaluation of the pros and cons of using regression methods generally and will examine the implications of his analysis with respect to the allocation of satellite royalty funds to Devotional claimants relative to other programming categories. II. DESIGNATED TESTIMONY The SDC designate the 2010-2013 Cable Royalty Fund allocation proceeding testimony (Docket No. 14-CRB-0010-CD (2010-13)) of the following witnesses. Copies of each witness’s prior written and oral testimony are attached hereto as Volumes II, III, and IV. Volume II: A. Gregory S. Crawford, Ph.D. B. Howard Horowitz Volume III: C. Joel Steckel, Ph.D. D. James M. Trautman Volume IV: E. Daniel M. Hartman F. Allan Singer G. Nancy A. Mathiowetz, Ph.D. III. SDC’S CLAIM FOR THE DEVOTIONAL CLAIMANT CATEGORY Based on the testimony of their witnesses, the results of the Horowitz study and the Bortz study submitted in connection with the 2010-2013 Cable Royalty Fund allocation proceeding, the Judges Final Determination issued in the 2010-2013 Cable Royalty Fund allocation proceeding, 4 SDC WRITTEN DIRECT STATEMENT – 14-CRB-0011-SD (2010-13) Public Version and other testimony they anticipate will be presented in this case, the SDC are seeking the following percentage shares of the 2010-2013 Satellite Royalty Funds: 2010 2011 2012 2013 4.42% 7.90% 7.65% 5.40% Pursuant to 37 C.F.R. § 351.4(b)(3), the SDC reserve the right to amend the requested award based on evidence in this proceeding. Date: March 22, 2019 Respectfully submitted, SETTLING DEVOTIONAL CLAIMANTS /s/ Matthew J. MacLean Arnold P. Lutzker, Esq. (D.C. Bar No. 101806) [email protected] Benjamin Sternberg (D.C. Bar No. 1016576) [email protected] LUTZKER & LUTZKER LLP 1233 20th Street, NW, Suite 703 Washington, D.C. 20036 Telephone: 202-408-7600 Fax: 202-408-7677 Matthew J. MacLean (D.C. Bar No. 479257) [email protected] Michael A. Warley (D.C. Bar 1028686) [email protected] Jessica T. Nyman (D.C. Bar No. 1030613) [email protected] PILLSBURY WINTHROP SHAW PITTMAN LLP 1200 Seventeenth Street, NW Washington, D.C. 20036 Telephone: 202-663-8525 Fax: 202-663-8007 Counsel for Settling Devotional Claimants 5 SDC WRITTEN DIRECT STATEMENT – 14-CRB-0011-SD (2010-13) Public Version CERTIFICATE OF SERVICE I, Matthew J. MacLean, hereby certify that on March 22, 2019, a copy of this Written Direct Statement of the Settling Devotional Claimants was electronically filed in eCRB and served on the following participants: MULTIGROUP CLAIMANTS MPAA-REPRESENTED PROGRAM SPANISH LANGUAGE PRODUCERS SUPPLIERS Brian D. Boydston Gregory O. Olaniran Pick & Boydston, LLP Lucy Holmes Plovnick 10786 Le Conte Avenue Alesha M. Dominique Los Angeles, CA 90024 MITCHELL, SILBERBERG & KNUPP LLP [email protected] 1818 N Street, NW, 7th Floor Washington, DC 20036 202-355-7917 202-355-7887 [email protected] [email protected] [email protected] BROADCASTER CLAIMANTS GROUP NATIONAL PUBLIC RADIO John I. Stewart, Jr. Gregory A. Lewis Ann Mace NATIONAL PUBLIC RADIO, INC.