Congress Urges Radio Royalty Negotiations

Smashing Pumpkins lead vocalist Billy Corgan was clearly the rock star who stole the show during the House Judiciary Committee's three-and-a-half hour hearing on performance royalties. Within the shadow of the U.S. Capitol dome, Corgan's own smooth dome rocked and rolled atop his shoulders as he made an emphatic case for pending legislation that could force new fees on broadcasters based on "fairness" for providing intellectual property that has particularly benefited radio broadcasters.But he was also careful, even skillful, not to bite the hand that he acknowledged, fed him. "I was able to find an audience, in no small measure, because of the long support of my music by terrestrial radio," Corgan told the Committee that clearly favors performers getting rewarded for their efforts. "I am a big fan of radio, and am very interested in its continued health and well being. Terrestrial radio has helped me to discover many of the artists that became influential to my life and artistic pursuits. I by no means see them as the bad guy," he testified. Corgan's mission was clear: He was there to persuade broadcasters, Congress, record labels and any other body that would listen, that it was time to "redress an outmoded, unfair practice that factors one participant's needs over another's. This legislation [the Performance Royalties Act, H.R. 848] is simply a form of restoration to artists long overdue." Broadcasters, represented by Commonwealth's Steve Newberry and Larry Patrick, a broadcast broker who also operates 14 Wyoming radio stations under the banner of Legend Communications, argued that radio's airtime given to performers and their recordings is equal in promotion to any royalty fees that could be determined by the Library of Congress' Copyright Office if the controversial legislation is made law. "The real problem, which this bill does not address, is between the artists and these mega-record labels. Artists, often find themselves in such difficult financial straits because of the one-sided, unfair contracts they signed with their record label," Newberry told the Committee. "Toni Braxton, for example, received less than 35 cents per album of the $188 million in CDs she sold. If these artists had fair contracts with their labels that included fair royalty clauses, they would have benefited from the promotional value of free radio airplay that they should have enjoyed." Newberry continued, "Free radio airplay is the best friend of artists and record labels. Herbie Hancock said it best two weeks ago during his visit to Capitol Hill --'Just as radio promotes music, music promotes radio.' And I couldn't agree more. That's why the system has worked to the benefit of all parties for the last 80 years." But the Committee members, some of whom heard similar testimony from Newberry last June when the 110th Congress weighed the legislation in one of its many incarnations, but lost out to a combination of legislative scheduling and NAB lobbying against it, seemed focused on making certain that performers and artists would be compensated for their efforts. However, they also made a strong case for the affected parties negotiating a settlement and not forcing Congress to make them happy. Jim Sensenbrenner, a Wisconsin Republican who, in his 30th year in Congress said he wanted "to make my message sharp," looked directly at Newberry and ordered him to "get all the players at the table. Broadcasters haven't wanted to come to the table. I'm going to aim my cannon right between you eyes, Mr. Newberry. And get to the table right away and if you don't want to get to the table, can you tell me why?" While no other representatives were as threatening, most were as clear. The broadcasters said that with the economy busted, radio groups cutting their payrolls and costs in record numbers and ways, this was not the time to press a troubled industry with new "taxes, as they like to describe them." Newberry and Patrick also offered heartbreaking stories of moms and pops and large groups alike, struggling to keep from going bust, that were clearly taken under advisement by the House members. But enough was enough. Brad Sherman, a California Democrat representing the San Fernando Valley, who noted early in the hearing that "intellectual property is what keeps Los Angeles humming" and said he was pressing the importance of performers getting paid, was worn out by broadcasters' poverty stories as the event approached its third hour. He flipped the scenario on the broadcasters, asking what they'd think if a band "crashed a restaurant" ate all the food, then refused to pay, saying that their "business model was not to pay," or "what if they said they are a struggling band and can't afford to pay, or that they are a band that provides a public service, or that by eating there it is a good promotion for the restaurant." It was an uncomfortable moment for radio. Several Committee members asked the broadcasters whether they paid for Rush Limbaugh to be on their airwaves and were told that his appearances were made possible through a combination of cash payments and bartered time. Rep. Anthony Weiner, a New York Democrat who represents South Brooklyn, pressed Newberry about whether Glen Beck "has a right to charge for his program being aired on one of Newberry's 23 radio stations. Newberry responded that he had the choice not to air Beck but after a Congressional rope-a-dope of sorts, Newberry acknowledged that Beck, like Limbaugh, has the right to negotiate the value and terms of the deal. In the end, Sherman leaned toward Newberry and RIAA chairman/CEO Mitch Bainwol, who sat immediately to Newberry's left throughout the hearing, and asked if they would negotiate a fee structure. "No sir, this legislation will not benefit our industry," Newberry responded gently. Sherman sat back in his seat, then with a sigh, said, "Well, if you are going to slit your throat, please don't do it here," making a flip reference to a remark made by NAB president/CEO David Rehr. Last June at the Conclave, Rehr said he would rather slit his own throat than negotiate over performance fees.

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Congress Urges Radio Royalty Negotiations

Jeffrey Yorke

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Jeffrey Yorke

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