Open that Can of ASCAP! Cities Need to Underbid and Compete with the Music Mafia

Now if the city wanted to collect revenue, they could underbid ASCAP and BMI and be a central DFW hub for businesses to start paying their annual music police fees/licenses to. If we took on that role, we wouldn’t have to police these establishments, we’d tie it to their annual property taxes or permits. We’d create jobs locally getting royalty checks to the artists and producers….instead of giving it to a music association who then pays a bunch of lawyers to fight in court those who refuse to be extorted. The music middleman is the mafia and both the venue and the musicians are getting ripped off…would rather see the city get into that business. The city once looked into owning a natural gas plant…so there you go.”

So I contacted one of our council people about the idea that the city should underbid the music associations claiming to be non-profit…”I met with Aldo at Downtown Management Tuesday to discuss busking and ASCAP liabilities with festivals, ArlingtonNights, business owners, and potentially the musicians themselves….he asked me to ask ASCAP if they’d entertain the idea for a downtown business license that covers all downtown businesses to be able to be licensed to provide live or recorded music…but I have yet to hear back from them and can’t see them giving up control and the threat of lucrative lawsuits….I would like to know what ASCAP and BMI pay their employees/attorneys as they claim to be 501C3 but keep almost 12% of musician dues and venue licenses fees. The average annual license is from $356 to $7000/year (they have tiered rates also they take the occupancy size limit times $3.33 but have a minimum annual due of $356/yr)…why give it to a middle man? Why would a private non-profit who has a PAC and is chummie with congressman/woman exist to carry out federal copyright law when the enforcement could be lucrative to local municipalities? THIS is the business Arlington should look into getting into. If you guys underbid ASCAP and BMI, then they lose their customers…all we need is a software system that musicians interact with to get paid. Tarrant County Tax collectors could very well tie the music license fees to their annual taxes…so underbiding is easy when you take out paying the attorneys. Also the 1950’s legislation that is antiquated in the way of deciding what the royalty amount to pay (there is this royalty board that sets the rates from a legal standard)…yeah is finally being challenged to be changed to a system that approximates a willing buyer with a willing seller market rate…keep an eye for the outcome of the 2017 Music Modernization Act. Look at ASCAP’s 2016 annual report to see their revenues and their growth….I feel they (ASCAP and BMI) should stick to collecting international and unincorporated areas’ dues and licensing fees and let the city governments use that extra cash to pay our police and firemen”.

So first let us look at their foundation’s handiwork….

It is in the red from income to expenses for the foundation by $636,800 but they can afford the shortfall as when you look at their 2016 balance sheet the headlines read…

ASCAP Delivers Record-High 2016 Financial Results: Collects $1.059 Billion in Revenue and Distributes More Than $918 Million to Songwriter, Composer and Music Publisher Members

What makes up that revenue?

ASCAP’s US licensing  $759 million + Foreign revenues totaled $300 million.

 

But they also collect member dues… back in 2010 a friend told me it cost $50 for a membership and lasts a lifetime.  ASCAP claimed “In 2016 alone, we processed over one trillion performanceswelcomed 40,000 new members,….” so if they still charge $50 a membership then that is ADDITIONAL income in 2016 of about $2 million.

$1.059b + $2m = $1.061 billion in revenue

The difference between $1.061 billion income and $918 million expenses leaves $143 million to pay their employees and cover that foundation shortfall of $636,800.

$143,000,000 – $636,800 = $142,363,200 (or $142.4 million) left over after royalty distributions.

What makes up their domestic expenses?

“Domestic distributions of $631 million from ASCAP-licensed and administered performances in the U.S. grew nearly 10%, up $55.5 million over 2015.”  Of the $918 million in expenses, $631 million (69%) was domestic distributions.

What are their OPERATING EXPENSES?

Well we know what their foundation expenses are and once you net the foundation shortfall, $142.4 million is left over to go towards operating expenses.

“ASCAP operates on a not-for-profit basis and delivers about 88 cents of every dollar collected back to members for performances of their music”.  Which means they keep 12% of venue payments. In the “about us” page of their website they say that 11.6% is allocated to operating expenses (run the mafia/pay lawyers and employees for enforcement and royalty distributions).

$142.4 million x .116 = $16.5 million went to the ASCAP (mafia) “non-profit” in 2016.

I repeat I figure that $16.5 million went to the ASCAP (mafia) “non-profit” in 2016

Also in their “about us” page they say they have 150 reps in the field to approach businesses that do not respond to collection demands by email or phone (yep they have an office in PLANO TX)….so in not counting attorneys and if you add the 77 people on the ASCAP Team plus (and not counting the board), there may be up to 227 employees and the average pay could be $73K/yr?

In any case I believe the cities should ban together and come up with one database to payout royalties and shut out the middleman’s $16.5 million to enjoy this money LOCALLY.

Read on to find out how the middleman’s cut really is probably understating if all appropriate entities were compliant and current to copyright law licensing (think single payer system and economies of scale).

And do the members really get paid for their radio plays? Not likely (see ripoff report for one example).

What about getting paid via live performances? ASCAP writes Top 300 Tours Survey
ASCAP surveys and distributes royalties for the ASCAP songs performed during the 300 top-grossing tours each year, as reported by Pollstar. This includes both headlining and opening acts. ASCAP requests setlists directly from managers, promoters and venues where available“.

Another way to get paid is for the musician to self-report via “ASCAP ONSTAGE” when they play live (like at open mics or in restaurants or small concerts and festivals). Note this is a really efficient way to get the mafia informed of non-compliant venues so they can start demanding licenses for unregistered venues (and then threaten to sue them)….all for what an estimated .0003 cent a song? Someone on FB claimed that a well known artist had something like 40,000 plays and got a $12 check….If someone reading this is self-reporting to ASCAP and have been paid, please do chime in how much they got paid and what size venue it was that they played in (and was it worth it to the venue to get hit with those fees if they shut her down in being musician friendly).

 

Here is what can happen when we shut out the middlemen

  1. All appropriate business types will get licenses tied to their property taxes or operating permits so no attorneys and court systems are tied up
  2. More money in the pool means more money goes to royalties and the city services needed to support local businesses such as police and fire departments
  3. But what about the foundation? It can be administered through local governments.
  4. More businesses will be friendly to live & recorded music.

Best part is we take the ASCAP & BMI mafia PAC out of congress and so that “claimed nonprofits” don’t hide behind copyright law to get paid carrying out federal law….the cities do. That way citizens and businesses indirectly enjoy the benefits of the licensing fees LOCALLY…and musicians EVERYWHERE get bigger royalties in having a bigger pool of money to be paid from.

ASCAP writes, “With 650,000 members representing more than 10 million copyrighted works, ASCAP is the worldwide leader in performance royalties, service and advocacy for songwriters and composers, …”   yeah right and I’ve got some swampland for ya.

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