National Association of Broadcasters President Pushes Back on Recording Performance Royalties

Digital Products The National Association of Broadcasters President Curtis LeGeyt testified before the U.S. House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet against the American Music Fairness Act.

LeGeyt argues that the AMFA could place financial strain on local radio stations, especially as global digital competitors with consumer subscriptions to cover royalty expenses continue to draw attention away from radio.

“Radio’s place in the fabric of American culture is not accidental,” LeGeyt told the subcommittee. “It is the product of policy choices and a resulting legal framework that enables broadcast radio to remain completely free and dedicated to local communities. Anyone in the country can access local radio without needing a subscription or internet connection. During emergencies and times when other forms of communication fail, radio is there to deliver critical information to listeners across America.”

“Some of my fellow panelists have suggested that despite broadcast radio’s time-tested benefits to both performers and listeners, Congress ought to overhaul the current music licensing laws that apply to local radio and impose a new sound recording performance royalty on local radio stations by enacting the AMFA.”

“Such an abrupt change in law that governs relationships between incumbent rights holders and users would be wholly inconsistent with Congress’s long-held approach to copyright policy,” LeGeyt told the subcommittee.

“It would be unprecedented for Congress to upend copyright laws that have governed decades-long relationships on which entire industries have been built to the mutual benefit of stakeholders as well as the public, and where the fundamental nature of each remains intact.”

NAB President Curtis LeGeyt says a new recording performance royalty would be ‘economically untenable’ for most local radio stations.

“While our critical lifeline service is free to listeners, it is not to those who provide it. Radio operators invest significant money into their content and the local employees who make [radio] so unique in our culture. Radio stations also pay countless other fees, including annual FCC regulatory assessments and copyright royalties to performing rights organizations like ASCAP, BMI, GMR, and SESAC—as well as to streaming collectives like SoundExchange.”

“AMFA’s proponents argue here today that these fees are not enough, and radio stations should be assessed a new burdensome royalty. Streaming platforms and satellite radio broadcasters recoup costs like these through the subscriptions and fees they charge their users. Free, local radio only has the option of cutting elsewhere when new fees are imposed.”

“These stations have to make the choice between covering local football games or paying new fees; between making their payroll or sending more money to big record labels. AMFA’s proponents minimize this impact by focusing on the argument that smaller radio stations would be charged ‘only’ a $500 annual fee. But we all know that once assessed, fees never decrease. And I cannot stress enough that $500 is real money to a small market radio operator.”

“Enacting the AMFA would jeopardize jobs, require radio stations to cut back their involvement in local communities, and place more pressure on radio stations already struggling to survive. It would also incentivize radio stations to play less music per hour, shift to non-music formats as a means of economic survival, and cause some stations to go out of business altogether.”

Testifying for the American Music Fairness Act was SoundExchange CEO Michael Huppe. He argues that the United States is severely behind other countries in how it deals with copyright laws.

“Because the U.S. does not provide a performance right for sound recordings played over AM/FM radio, we are among the most notorious abusers of property rights—joining North Korea, Cuba, and Iran—in our failure to secure the rights of artists,” Huppe argued.

“All other developed nations respect artists by providing such a right. Even China amended its laws in 2021 to provide a performance right for terrestrial radio play. Our broadcaster friends say this shouldn’t happen in America. Of course, who wouldn’t want access to the primary input of their business for free?”

“Our nation’s radio stations generate $15 billion in revenue every year playing nearly a billion songs. Yet they don’t believe that the performing artists and others who make those songs possible deserve a share. They are wrong.”

“All music platforms except radio pay a market rate for the music that is at the heart of those businesses. Pandora, Spotify, Apple Music, Sirius XM, Amazon, YouTube Music and even TikTok pay royalties for sound recordings. But radio does not. Music is the foundation of the entire radio business model. Yet big radio is unwilling to share any of its successes with the performers who attract the advertisers that pay their salaries. Just as home builders don’t get their bricks for free, radio shouldn’t get the very foundation of their business for free either.”

“Passing AMFA will also ensure that American artists are paid when their music is played overseas. I mentioned earlier that all other Democratic nations pay a performance royalty for radio plays. But there are nations—such as France—that use our failure to pay a performance royalty as an excuse to deny royalties to American artists. France collects royalties on behalf of our artists—then diverts them to their own cultural fund. They are robbing Peter to pay Pierre.”

“Passing AMFA will repatriate hundreds of millions of dollars in overseas royalties to American performers. The Americans for Tax Reform group has debunked the NAB’s efforts to label performance royalties a tax, writing to Congress, “charging for content is not a tax. Specifically, a performance right is not a tax.”

“I urge you not to be distracted by the Broadcasters’ smoke and mirrors. They will call it a ‘tax.’ It is not. If It was the Americans for Tax Reform group would have called it out as such. Royalties provide just compensation for the use of others’ artistry and content. Requiring broadcast radio to pay a fair fee for its primary input is the farthest thing from a tax.”

Read National Association of Broadcasters President Curtis LeGeyt’s full testimony before Congress here.

Read SoundExchange CEO Michael Huppe’s full testimony before Congress here.