Live Music Sector Set Cmo 'Kickbacks' Into The Spotlight

John Webster amongst Anthony Addis too Paul Crockford

They may non desire to hold upwards inward the spotlight, too the until of late practices of 'discounts' or 'rebates' offered yesteryear European Collective Management Organisations such every bit Buma-Stemra inward Kingdom of the Netherlands too GEMA inward Deutschland to large too established alive music promoters too venues were relatively unknown. But 2016 saw the topic bring upwards up every bit 1 of the principal talking points at this year's International Live Music Conference (ILMC). The Conference held a packed principal conference session dedicted to the topic too amongst managers for Mark Knopfler too Muse on the Stage along amongst representatives from 2 Collection Societies, too many artiste too songwriter representatives expressed their anger at the practice,

Back inward July 2015 Music Law Updates reported that Dutch collection lodge Buma’s exercise of rewarding the country’s biggest promoters amongst a kickback for ‘helping’ to collect the levy on alive music concerts (which is meant to remunerate songwriters too music publishers for the job of their works) had come upwards nether burn downward afterward a number of tour accountants for performers who pen their ain textile could non reconcile deductions made yesteryear promoters against revenues received yesteryear their songwriter clients from their ain collection societies – fifty-fifty afterward taking into concern human relationship unremarkably collection lodge commissions which are to a greater extent than frequently than non accepted. Buma plainly gear upwards the exercise around 1999 afterward forcing through a charge per unit of measurement ascension for the job of music to 7% of Box Office internet of VAT  – but was offering a 25% kickback of that levy to some promoters too venues inward the Netherlands.

Two managers, Paul Crockford who manages Mark Knopfler too Brian Message of ATC who manages Nick Cave & the Bad Seed,  both made arrangements amongst their artistes’ publishers too U.K. music collection lodge PRS for Music (the thence called 7G arrangement) to brand forthwith collections from promoters. Message also manages P J Harvey too Radiohead too Crockford also manages Level 42.

Whilst many artiste managers are at nowadays bespeak for ‘transparency’, the UK’s Music Managers Forum says that the people who lose out inward this province of affairs are the performer artists (who are suffering the deduction), too the writers too publishers (who are non receiving the total amount beingness deducted on their behalf). The MMF says discussions betwixt Byma, PRS for Music too the MMF have got failed to resolve matters

Ruben Brouwer, caput of legal affairs at Live Nation owned Mojo Concerts, has suggested a apartment charge per unit of measurement of 5.25% should apply to all promoters too venues inward Holland. The charge per unit of measurement inward the U.K. is 3% of Box Office, although the PRS are at nowadays running a consultation amongst the presumed promise they tin sack heighten this. Some promoters too venues have got refused to bring a novel version of the rebate scheme offered yesteryear BUMA, too are taking BUMA to the Supervisory Board for collection societies inward The Netherlands.

The ILMC proved to hold upwards a timely update on the topic - amongst the revelation that non exclusively was the exercise widespread across mainland Europe - but had been going on for many many years. The main panel  Performance Royalties: Shows, Songs & Settlements pulled no punches inward regard to 1 of the most contentious issues facing payments from international collecting societies too the argument around discounts that are applied.

The ILMC panel

Jon Webster - President of the MMF opened yesteryear bespeak if functioning royalties should hold upwards seen every bit a tax. “It’s equitable remuneration,” he said. “It is component of the show.” Paul Crockford thence explained how he maiden of all became aware of the termination inward 2010 when Mark Knopfler  was touring inward the Netherlands too their tour accountant spotted some issues going through the receipts. “In his follow upwards operate he noticed in that place was a massive discrepancy betwixt the amount that Buma had received too passed onto PRS versus what was inward the short town that Mojo Concerts had deducted on the short town itself,” he said. Despite raising this amongst PRS inward the UK, he felt that zilch was genuinely achieved when it contacted Buma.

“There was a discount, rebate, kickback or nonetheless y'all desire to define it that Buma had agreed amongst Mojo Concerts,” he says. “When nosotros fronted it upwards amongst Buma, the declaration presented was that inward an assay to increase the alive rate, which Mojo had refused to become along with, they gave Mojo a discount based on the fact that they produce a vast number of shows inward Holland. It was on the footing that, hopefully, they would generate to a greater extent than income across the board from other promoters who operate inward that same semi-monopolistic position.”

Crockford claimed that really few people knew that whatever of this was happening. “Also Mojo wasn’t declaring that discount every bit component of the demonstrate income. Their declaration was that it was coin they got dorsum from Buma too it doesn’t affair to them where it comes from, every bit it’s non component of the show’s settlement. My argument, of course, was that it was precisely the opposite. Buma should non hold upwards discounting my artist’s income. If they are, that coin should become into the demonstrate instead of making its agency into Mojo’s already stuffed pockets.”

Anthony Addis (of Brontone Management) said he asked for a “bible” inward 2009 explaining which markets did discounts too at what rates. “Discounts or rebates – they are both the same to me every bit an creative soul manager,” he said. “Every collecting lodge exclusively has to pay out to the PRS precisely what it receives. When y'all are talking most discounts or whatever, if the collection lodge receives the total amount, thence that coin should autumn through the PRS, less its direction accuse for that collection lodge inward that country.”

Then it was the plough of the Collection societies. John Sweeney (of U.S. of A. lodge SESAC, but formerly of the PRS) revealed this topic has a much longer history. “20 years ago, U2 tried to produce a cradle-to-grave royalty concern human relationship for a European tour too found that the figures didn’t quite add together up,” he explained. “We looked to consider what nosotros could produce to brand the sums add together upwards but nosotros never managed to accomplish it or fifty-fifty acquire close. This discount or rebate was belike e'er going on but non known about. To arrive a fleck to a greater extent than complicated, the collecting lodge agreements are blanket licenses. Even though y'all tin sack consider what came from the box purpose too what y'all should hold upwards paid, in that place are e'er adjustments from yesteryear performances paid.”

Martin Vierrath of GEMA had bravely agreed to hold upwards on the panel - BUMA had declined to speak publicly on the termination at the ILMC. Vierrath explained how the scheme inward Deutschland worked, something that appeared far to a greater extent than complex than anyone presumed. He says in that place are dissimilar rates deducted from gross tickets sales to remunerate songwriters - depending on the size of the venue. For mega acts (playing to 15k+), it’s a 7.65% deduction on the box office; for venues betwixt 2k too 15k, it’s 7.2%; too for venues nether 2k, it’s 5%. He thence said in that place were moves to standardise that, which initially met amongst approval. When he revealed that the charge per unit of measurement GEMA was at nowadays looking at would hold upwards 10%, in that place were loud gasps from the audience. However from this GEMA bring their ain direction fee (said to hold upwards 15%). On TOP of this is a discount for the larger promoters of 14.5% too thence an additional 20% discount or rebate available to members of the German linguistic communication concert promoters association BDV (Bundesverband der Veranstaltungswirtschaftand) 1 other merchandise body. BDV president Jens Michow was inward the audience too explained these rebates every bit agency of regarding the promoters for probiding accurate laid lists - although every bit Paul Crockford remarked from the phase - it was an expensive service too he couldn't empathise why BDV member's rebates didn't come upwards from the GEMA deduction - which of course of teaching was meant to encompass the costs of adminsitration of collection. Michow, a lawyer, too Vierrath both said the rebates were specifically provided for inward German linguistic communication law.

In the U.K. the PRS tariff is 3%, but every bit said above, the PRS are currently labor a consultation to revise the rate, looking at the possibility of widening the sources of revenues that the charge per unit of measurement tin sack hold upwards applied to (such every bit secondary ticketing, sponsorship too auto parking) too of rising the 'headline' rate. Festival promoters are looking for a reduction inward the charge per unit of measurement to reverberate their ain concern models. 

Crockford revealed that for Knopfler’s most recent tour inward Deutschland he invoked clause 7G to take away the relevant alive functioning right from the PRS too collect forthwith from promoters (a province of affairs made uncomplicated yesteryear the fact that Knopfler exclusively plays his ain songs too in that place is no back upwards act). “I collected forthwith this time,” he said. “I didn’t job GEMA. I took my creative soul out too nosotros collected direct. We got it on the nighttime  and nosotros got it all.”

Maria Forte (Maria Forte Music Services) explained how complex it tin sack hold upwards for acts of a certainly size, proverb she was brought inward yesteryear Iron Maiden’s direction every bit they felt they weren’t getting what they were due - 1 time again amongst the amounts deducted inward settlements non reflecting the amounts received dorsum to remunerate the band's songwriters. In monastic say to brand feel of it all, she got access to their accounts too she logged half dozen years (covering 3 tours) of accounts (by tour, territory, show, setlist too writer). She thence logged that all through the PRS statements that came in. “I discovered that in that place had been discounts that had been applied but that hadn’t come upwards through. I could consider in that place were large variances amongst certainly territories.” She added, “There were large territorial variances. We found in that place were discounts that were applied but non at the short town point. We also found the box purpose amounts were under-declared too that would naturally cut back the percentage.”

Webster ended yesteryear saying “This is going to run too run but nosotros are moving inward the right direction,” he said. “Everyone –managers, agents – is learning what is possible too where nosotros are all going amongst this. I’d similar to consider us cease upwards amongst a simpler scheme too a much to a greater extent than transparent system. Because of what has happened over the yesteryear 3 or 4 years, people are get-go to polish a lite on this expanse too it volition cease upwards inward everyone’s improve interest".

This author remains concerned: The German linguistic communication rebates may good hold upwards provided for inward German linguistic communication police -  but it doesn't hateful that police is fair to songwriters, right of fifty-fifty valid inside the European Union. In some other serial of cases inward the alive music sector, German linguistic communication taxation withholding laws were struck downward (notably FKP Scorpio Konzertproduction Gmbh v Finanzamt Hamburg-Eimsbüttel ECJ C290-04) too it would hold upwards interesting to consider what European Commission contest regulators too the Court of Justice of the EU brand of a scheme gear upwards yesteryear a CMO (itself a monopoly) that thence rewards dominant players too national merchandise association members - inside an opened upwards mutual market, where contest laws trump all. The revelations have got also come upwards at an interesting fourth dimension for European collection societies - already beingness looked at every bit they are almost e'er defacto monopolies.

The topic also came upwards at a minute panel which included CAA co-head Mike Greek (One Direction, Sigur Rós, Sam Smith), Red Light Management’s U.K. medico James Sandom (Bastille, Kaiser Chiefs, The Vaccines), too ITB's Lucy Dickins (Adele, Mumford & Sons, Jamie T): pecifically, the exercise of collecting societies granting promoters discounts that don’t cease upwards amongst the artists. The panel agreed that this was an unacceptable exercise although noted that inward the USA - where songwriters acquire only 1% of Box Office, “the whole topic is non a existent termination inward America”. The same is truthful for Australia, amongst promoter Michael Gudinski explaining “There’s never been a rebate inward Australia. You acquire a punishment if y'all don’t pay on time.” That does audio similar a cheaper too somewhat to a greater extent than transparent solution!

http://28.ilmc.com/report/meetings#forum component 2

http://www.musiclawupdates.com/?p=6378

http://www.musiclawupdates.com/?p=2745

Collective Management Organisations, Creativity too Cultural Diversity
http://www.create.ac.uk/publications/collective-management-organisations-creativity-and-cultural-diversity/