Questions Raised over ASCAP Cable TV Royalties Paid Via Radio Surveys

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LOS ANGELES (Film Music Magazine) — Questions have been raised in the industry concerning substantial sums of a $30.6 million television royalty settlement that were paid to ASCAP radio writers and publishers.
According to ASCAP President Marilyn Bergman, funds for the $30.6 million royalty payout were received by ASCAP from U.S. local cable television providers as a retroactive settlement for ASCAP music used by these television broadcasters for the period from 1990 through 1999.
The questions focus on payment of $5 million of these funds to radio writers and publishers, including a last-minute switch of $1.8 million used to increase the royalty payout to radio writers and publishers. Those payments, which were based on surveys of radio performances are in apparent violation of ASCAP’s “Follow The Dollar” policy. This long-standing policy, as defined on ASCAP’s website, “ensures that the license fees that ASCAP receives from any medium are paid to writers and publishers for performances on that medium. In other words, the money received from cable is paid out for cable performances, etc.”
According to documents obtained by Film Music Magazine, of the $30.6 million distributable to ASCAP members after the costs of the settlement were paid, $15.4 million was allocated to compensate members for overhead and the “spot adjustment factor” which shifts royalty money from locally originated cable programming to cable network programming, a wholly separate income stream. The remaining $15.2 million was designated by ASCAP for payment to those members who were deemed to have had music performances on local cable television.
Of this $15.2 million of the settlement fund, designated for payment to those writers and publishers who actually had performances on locally originated cable television channels, $5 million – approximately 30% of those local performance funds – was paid to writers and publishers whose music received “feature performance” credit in ASCAP’s radio surveys.
The documents detail how the original allocation of $3.2 million to radio writers and publishers was increased by an additional $1.8 million that was taken out of the portion of the settlement fund established for members who made specific claims for payment based on airplay of their music just prior to the final payout of the retroactive royalties. But, instead of paying the additional $1.8 million to the radio performance information from 1990-1999 as the previous $3.2 million had been paid, ASCAP paid the $1.8 million increase to writers and publishers whose music appeared in the 2001 radio survey, a year not covered by the retroactive local cable settlement.
Questions have been raised in the industry about why one-third of the distributable local cable performance money was paid-out based on radio surveys; about what scientific or statistical data justified such large payments; and, if this policy of diverting local cable royalties to radio performances will set a precedent in ASCAP’s policies governing the current and future distribution of television royalties.
ASCAP President Marilyn Bergman stated at the 2002 ASCAP General Membership Meeting: “We believe firmly in a transparent distribution system, one that is open and accessible.”
ASCAP officials have declined to comment on questions from Film Music magazine about the local cable television special distribution, and has declined to disclose the names of ASCAP Board members who make up the ASCAP Survey and Distribution Committee, a committee of ASCAP Board of Director members that is actively involved in royalty payment recommendations at ASCAP. ASCAP has also declined to disclose minutes, voting records, transcripts, or attendance details of Board of Directors meetings, which members are not allowed to attend.
ASCAP Senior Vice President of Marketing, Phil Crosland, stated in a response to Film Music Magazine, “We strongly agree with Marilyn’s statement and would go further to tell you that not only is ASCAP’s distribution system fair, it is far more open and accessible than that of any rights organization with which we compete. As to the Survey and Distribution Committee, like other Board committees they make recommendations to the full Board. It is the full ASCAP Board that determines survey and distribution policy. And the Board makes its decisions in the best interests of all ASCAP members.”
The facts, however, regarding the local cable television special distribution and ASCAP’s decision this week to keep key aspects of the distribution and those who may have played a part in recommending the significant shifts of money from television to radio secret may be irreconcilable with the statements of Crosland and Bergman. In addition, ASCAP allegedly did not monitor, nor keep statistical records of its repertory performed on local cable venues for a period of at least ten years. Finally, the statements are difficult to reconcile with the policy and promise of “Follow the Dollar,” that cable TV monies won’t be paid to radio performances.

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