CBO Report Seems To Back Radio On Performance Fee
August 3, 2009 at 2:34 PM (PT)
The Congressional Budget Office recently released a report on H.R. 848 -- the Performance Rights Act -- and it backs the NAB and radio's claim that the impact of a new fee "could be substantial." NAB EVP/Media Relations DENNIS WHARTON agreed the report from the CBO proves the legislation is an "attempted money grab by the labels" and that "nobody knows how much of the proposed fee would go to them and not to the performing artists themselves."
The report states, "Based on data from industry sources regarding the number of over-the-air radio broadcasters, CBO estimates that the cost of complying with the mandate for publicly-owned stations would be about $500,000 a year. Also, based on those data, CBO estimates that commercial broadcasters that have gross revenues of less than $1.25 million in any calendar year would pay a total of about $16 million annually in royalty fees."
The CBO report continues, "Information from industry sources indicates that about 1,800 over-the-air radio broadcasters currently have gross revenues in any year of $1.25 million or more. However, because royalty fees have not been established for such broadcasters and because such fees could cause some broadcasters to shift their programming from music to other formats, CBO cannot determine whether the aggregate cost of complying with the mandate would exceed the annual threshold for private-sector mandates."
musicFIRST Exec. Dir. JENNIFER BENDALL said, "It's not a tax; never has been; never will be. The CBO report on the bill approved by the House Judiciary Committee, H.R. 848, makes it clear. Candidly, we don't expect NAB to listen to the CBO. The head of NAB's radio board told a Senate hearing in 2007 that a radio performance royalty is not a tax. They did not listen to him, either. Let's face it: They are trying to defend the indefensible and NAB will use whatever words their consultants tell them might distract members of Congress from the core issue."
The NAB Responds Back
Responding to the RIAA-backed group's claim, NAB EVP DENNIS WHARTON issued the following statement:
RIAA and their front groups are welcome to call this bill whatever they like. The end result is the same. If enacted, the U.S. government would be funneling hundreds of millions of dollars from AMERICA's hometown radio stations to the coffers of record label companies based overseas, all under the guise of 'fairness to artists.'"
Conveniently, the RIAA-backed group failed to mention that the CONGRESSIONAL BUDGET OFFICE report states that the cost of a performance tax to local radio broadcasters could be "substantial."