Sheila E. goes to Capitol Hill to talk artist's rights

In a renewed flare-up of a long-simmering war, Sheila E. told Capitol Hill on Tuesday that performers have a “basic American right” to get paid when songs are played on the radio, while broadcasters countered that such legislation would jeopardize their business.

Sheila E. was the latest performer to lobby in favor of the Performance Rights Act, a bill that would require stations to pay a royalty to performers in the same way that they currently pay songwriters. Hundreds of millions are at stake in the battle, which pits against each other two giant industries that have taken major financial hits recently: music diskeries and radio broadcasters.

Senate Judiciary Committee chairman Patrick Leahy (D-Vt.), the sponsor of the bill, signaled that he plans to press ahead on the legislation even if broadcasters do not take him up on his offer to negotiate with artists and record labels. “Legislation will move,” he told Steve Newberry, joint board chairman of the National Assn. of Broadcasters, who also testified.

A similar bill cleared the House Judiciary Committee in May, although it is uncertain when and if it will make it to the floor. The House version contains a sliding scale of flat fee payments for smaller broadcasters and delays implementation for at least one year.

Nevertheless, broadcasters have mounted a strong effort to stop the legislation with a nonbinding counter-resolution called the Local Radio Freedom Act. The NAB says that 246 House members and 23 senators have signed on to the resolution, and last week a group of 22 House Democrats sent a letter to Speaker Nancy Pelosi urging her to refrain from moving the Performance Rights Act to the floor.

“We are fighting to stay afloat in this very tough economy,” said Newberry, who also is president and CEO of Commonwealth Broadcasting, a group of 23 small-market stations based in Glasgow, Ky.

He argued that the legislation would “harm the beneficial relationship that exists between the radio industry and the recording industry.” He noted not only the promotional value of songs going out over the airwaves but radio stations’ willingness to plug artists’ concert appearances.

Leahy and Sen. Dianne Feinstein (D-Calif.), a co-sponsor of the bill who presided over the hearing, sounded skeptical, and pointed out that Internet and satellite radio already pay royalties to musicians. Sen. Al Franken (D-Minn.), a former talkradio host, drew laughs when he noted that the Roy Orbison estate, for example, really couldn’t reap a benefit from concert promotion. He also noted that he has worked for a struggling broadcaster, Air America.

Sheila E. said that, as much as there has been a symbiotic relationship between radio and artists, “Radio is the only part of our business where our work is used without permission or compensation. So when the National Assn. of Broadcasters tells us they are a true friend of the artists, we respond: Friends don’t let friends work without compensation.”

Others also cast the bill as an effort to correct an anomaly. Ralph Oman, adjunct professor at George Washington U. Law School, suggested that current practices undermine copyright law. “Promotional value cannot justify free use. Instead, it should be a factor in determining the appropriate royalty,” he said.

Marian Leighton-Levy, owner of Rounder Records in Burlington, Mass., noted that broadcasters in other countries pay performers for airplay, but performers cannot collect royalties overseas because U.S. broadcasters do not reciprocate. She pointed to her label’s release of the Robert Plant-Alison Krauss album “Raising Sand”: Plant was paid for airplay in the U.K. because he is a native of that country; Krauss did not get such a royalty there.

The tone of the hearing was softer than the heated rhetoric in recent months over the airwaves and on concert stages, where radio personalities and musicians have not been shy about expressing their views.The most contentious arguments have been over what the legislation would do to smaller- and minority- owned stations.

James L. Winston, executive director and general counsel of the National Assn. of Black Owned Broadcasters, said that the economic pinch is so dire that he’s calling for an investigation of lenders unwilling to enter workout arrangements with broadcasters struggling to meet their payments.

Included among the lenders, he noted, are beneficiaries of the bailout including Goldman Sachs and GE Credit. He also called for a probe of Arbitron’s new Portable People Meter for audience measurement, which he said has resulted in “huge ratings declines” for black-owned stations.

“For minority broadcasters, there are no fat profits to skim,” he said. “In fact, today, most minority broadcasters are struggling to survive.”

Leahy said that he planned to return to the legislation in the fall.

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