The debate over whether radio should pay royalties for the use of on-air music will air today in Washington during a hearing on the latest legislative proposal. The message from broadcasters in response will be simple: The music industry has walked away from efforts to reach the negotiated deal lawmakers prefer.
“We’ve been sitting at the table for four years ready and willing to have meaningful conversations about this with the music industry. And we don’t have a willing dance partner,” the National’s president said. Association of Broadcasters, Curtis Le Geyt. Indoor Radio.
In an interview, LeGeyt said the music industry and broadcasters have hit a agreement on the Music Modernization Act in 2018, at the request of House Judiciary Committee Chairman Jerrold Nadler (D-NY), NAB agreed to try to reach a settlement on the decades-old fault line regarding performance royalties at the ‘antenna.
“In response, we entered into closed-door discussions with the music industry that spanned over 18 months,” LeGeyt said. “But our attempts were rebuffed. We came back to the table several times, but at no time did the music industry officially come up with a counter-offer to anything we put on the table.
LeGeyt said he doesn’t know why the music industry has walked away from conversations. But the proposed American Music Fairness Act (HR 4130) can be considered a better result than anything NAB was suggesting, he noted. The main target of the bill are the largest radio groups, whose rates would be set by the Copyright Royalty Board. Stations with annual revenues of less than $1.5 million and whose parent companies generate less than $10 million in annual revenues would pay $500 per year in performance royalties. And even the smallest stations – those with less than $100,000 in revenue per year – would pay ten dollars a year.
But LeGeyt said the bill is an unbalanced proposal that would impose a new license fee on radio, giving nothing to local stations in return so they can increase their revenue and benefit both broadcasters and musicians.
The terms of the NAB offers have not been made public, but the trade group said they broadly cover a variety of music uses, including both on-air and streaming. As he takes charge of NAB, LeGeyt said he still believes that’s where the sweet spot is.
“If it’s just a zero-sum game, you’ll never find a middle ground that will benefit local broadcast listeners, as well as creators,” he said. “My hope would be to find a solution that would incentivize broadcasters to grow and innovate in streaming. And that means reducing costs and ensuring that artists benefit from this increased distribution and promotion.
New faces, new opportunity?
The debate over performance royalties dates back to when Frank Sinatra hits exploded onto AM radio. Over the decades, there have been openings for potential transactions. Perhaps this is one of those times, as LeGeyt takes control of NAB and Joe Crowley, who spent two decades on Capitol Hill as a New York Congressman, now leads the musicFirst Coalition, supported by the music industry.
LeGeyt and Crowley met in the fall, but both said Tuesday their face-to-face involved little real negotiation.
“It was just a very brief conversation,” Crowley said. Nonetheless, Crowley said he hopes the management change will make broadcasters realize they will have to pay. “We encourage any possibility of discussion, we think it is healthy. But at the end of the day, we believe legislation will always be needed to correct this injustice,” Crowley said.
LeGeyt was less optimistic. “We haven’t seen any movement from the music industry, in terms of wanting to start conversations again,” he said.
ticking the political clock
With negotiations stalled, one way the back and forth continues to play out is by pressuring members of Congress to sign each side’s respective legislation. Royalty supporters won the support of 31 House members – their bill has yet to make it to the Senate – while the NAB helped get 208 names added to the resolution opposing a royalty radio in the House, with 23 other names on the Senate version.
It is also taking place in a political year, with progress likely to stall on most congressional business by the summer as attention shifts to the November election.
Crowley said he was confident the momentum was heading their way and that today’s hearing is an indication that the issue of radio royalties is getting the attention it needs to move forward in Congress. “This work has been underway for over a year, and we are confident that this legislation will pass this year,” he said.
LeGeyt dismissed the idea that the NAB is simply trying to run out the legislative clock for another session of Congress by pushing to focus more on private negotiations.
“We’re less focused on the legislative calendar, and more focused on whether we have a willing dance partner who might actually want to push the cause forward on something that’s good for broadcasters and good for artists,” did he declare. “And at the moment we don’t see that.”