Hispanic B'casters Speak Out Against Performance Act

Appearing Tuesday morning (May 5) before a Congressional staff briefing in a meeting room in the Rayburn Building, Plascenica is one of 10 men and a woman all running Spanish language stations, talking about how the Performance Royalty Act (H.R. 848, S. 379) would affect their businesses if it were passed and they had to pay for the recorded works they broadcast over the airwaves. Already this year, he has been forced to lay off 30 percent of his staff. “Royalty fees would force me out of business,” he said. “Some of our stations would have to go off the air,” he said with concern.

The economic downfall in the United States has been a hardship on all businesses, observed Francisco Montero, but “Hispanic radio stations have been especially hard hit. The loss of anyone of these stations is crippling to its community,” said Montero, a co-managing partner with the law firm of Fletcher, Heald & Hildreth in Washington.

“To assess a tax on them would push them off the cliff. This is clearly the wrong bill at the wrong time,” observed Amador Bustos. “Over the past year we have reduced our staff about 30 percent. The notes and covenants from the bank are being watched in a very close way right now,” reported the chairman and CEO of Bustos Media, a privately held Sacramento-based group, founded in 2003 and which now owns and operates 22 radio and three television stations in California, Colorado, Idaho, Oregon, Utah, Washington and Wisconsin. “The performance tax would add the final nail in the coffin for Hispanic broadcasters,” stressed Bustos.  

Maria De Leon agreed that having to pay performance fees “would defiantly affect my business.” She is the owner and GM of KXTD-AM in Tulsa, Okla. and has been running the operation for a dozen years. Three years ago she bought out her partner and it’s a solo effort for her now. “I am only one AM station.” De Leon recognized her struggle with a single, AM station but also the achievement of coming to Washington to talk to members of Congress about the impact of the pending legislation. “I am very proud to here with…” her voice trailed off for a minutes, a smile crossed her face as she looked up and down the panel, and continued, “a bunch of men.” It was clear that while she was enjoying the expected struggle of running an AM standalone, she wasn’t looking forward to seeing any new bills in the mail box.

Frank Flores, VP/GM for the Miami-based Spanish Broadcasting System, a longtime family run, publicly owned group of radio stations that, in the last five years has successfully expanded into television and syndication, said he was more confused about performance fees the more he learned about it. Why would labels and artists want radio to pay fees after it already interviewed the artists, talked about their concerts and played their music, generating record sales?, he asked. He likened the process to “a bunch of friends getting together to have a big party for one friend and then, after the party is over, that friend turns to his hosts and demands an appearance fee!”
Tony Calatayud, the national director of Salem Communications’ Spanish language radio division called the pending measure in Congress “destructive” and said its passage would be “catastrophic. And it would increase the possibility of many stations going dark. We are already cutting salaries by 10 percent to 15 percent. To even be discussing this is almost shameful.”

After the briefing, the broadcasters, which included Univision Radio’s top morning show star, Eddie “Piolin” Sotelo, fanned out across Capitol Hill to Senate and House offices of members in high-density Hispanic districts to encourage them to back the “Local Radio Act,” an NAB-backed resolution aimed at repelling H.R. 838 and its companion measure in the Senate that, if passed, would initiate fees on broadcasters.

Meanwhile, musicFirst, the lobbying group representing artists and performers pushing for passage of the performance fee measure, had its on Cinco de Mayo response, pointing out that the National Hispanic Conference of State Legislators (NHCSL) recently approved a resolution that calls upon Congress to enact the Performance Rights Act.

The NHCSL resolution points out that broadcasters enjoy a “unique government-created exemption from having to compensate creators,” and that AM and FM radio stations are the only “radio platform that does not compensate creators,” among other planks, and notes “in recognition of the significant achievements and offerings of our State’s musicians, singers, producers, recording owners and others; and to correct a longstanding inequity in our federal law resulting in significant loss to our economy and its citizens, the NHCSL calls upon policy makers at all levels of government, including but not limited to Congress and the US Senate, to support efforts to adopt legislation or take any actions in support of The Performance Rights Act.”

“This is a matter of fairness,” said Indiana State Representative Mara Candelaria Reardon who sponsored the resolution. “It is certainly important to understand the role that radio plays in this debate. However, the importance of music in our lives needs to be underscored, and we need to protect the rights of artists and producers. Latin music is an integral part of the lives of many Hispanics in the U.S., and having a full performance right will ensure that the musicians and artists will be fairly compensated for their creation.”

musicFirst executive director Jennifer Bendall added,  “We’re pleased that grassroots Hispanic policymakers are strong supporters of closing this outrageous corporate loophole and will work with their members of Congress to advance this critical bill. Their voice is an essential part of this debate. As numerous Hispanic musicians recently attested to at a conference in Miami, the Performance Rights Act is essential to maintaining a strong and vibrant Latin music scene.”