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Texas leads in Performance Tax fight as labels try to divide, conquer

 - Results of pre-1972 sound recording cases murky

Rep. Randy Weber, R-Pearland, became the 21st Texas member of Congress to co-sponsor the Local Radio Freedom Act which is a nonbinding resolution that opposes the imposition of a Performance Tax on local radio stations.

The resolution is co-authored by two of Weber’s Texas colleagues, Reps. Mike Conaway, R-Midland, and Gene Green, D-Houston. Texas leads the nation in the number of co-sponsors for the measure, the total of which is hovering around 200, still shy of the 218 majority needed to halt the record labels’ push for a Performance Tax.

While Texas leads the nation in Congressional support for broadcasters’ position on this issue, not all members of the Texas delegation are in sync with their local radio stations.  Local broadcasters are encouraged to contact those lawmakers considered strong potential co-sponsors.  That list and other tools for such outreach are provided here

The labels show no signs of letting up, distributing recently a letter under the “musicFIRST” banner to small market, non-commercial and educational stations touting the low, flat rates they would pay under the labels’ proposal. The big-money targets, the letter says, are stations with revenues of $1 million or more and exclude stations airing primarily church services, sports or talk formats.

They say nothing of the likelihood that, if passed, a Performance Tax structure for all stations would ratchet up ever higher, or the fact that stations subject to the tax will be beholden to paying a rate set by the Copyright Royalty Board which has consistently set digital rates so high that Congress has had to intervene to fix them.

Further, musicFIRST ignores the administrative and record-keeping expenses all stations would incur to comply with their proposed tax structure even if they do not exceed the $1 million threshold and dismisses the promotional value that accrues to labels and artists alike from the free exposure to 244 million weekly radio listeners across the country.  This, despite the fact that the American music industry is the most financially and artistically successful in the world.                                               

Latest on pre-1972 sound recordings

On another music royalty front, a Florida court last month ruled there is no common law public performance right in pre-1972 sound recordings under that state’s law, but just days later Sirius/XM agreed to pay $210 million to settle record label lawsuits for nationwide public performance rights of such songs.

The state of pre-1972 sound recordings is increasingly murky with disparate rulings in Florida, New York and California. TAB’s go-to-legal eagle for this matter, David Oxenford, summarizes where the issue stands and how it’s evolving.

Oxenford served as TAB’s legal adviser in the successful legislative effort in 2013 to clarify state criminal law regarding the prosecution of music piracy for such recordings, closing a loophole that could have exposed radio stations to legal action.

Questions?  Contact TAB's Oscar Rodriguez or call (512) 322-9944.

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