WATERLOO - ASCAP, BMI and SESAC may be meaningless jumbled letters to most people outside the radio industry, but insiders see them as a veritable alphabet soup of programming costs.

And those costs could be headed skyward - prohibitively so, according to some station owners and managers - if a bill called the Performance Rights Act, which is making its way through Congress, becomes law.

There is some question whether that may happen; opponents have secured hundreds of allies in both houses of Congress.

The bill, introduced a little more than a year ago, would require local - also known as "territorial" - radio stations to pay performance royalties in addition to fees they already pay to artists through organizations like the American Society of Composers, Authors and Publishers, Broadcast Music Inc. and the Society of European Stage Authors & Composers.

Stations with less than $1.25 million in annual revenue would be allowed to pay a flat fee of no more than $5,000 per year.

Backing the bill is the MusicFirst Coalition, which includes the Recording Industry Association of America, several artist groups and SoundExchange, which collects licensing fees from satellite and Internet radio stations for distribution of royalty payments to musicians.

They want what they claim is fair compensation for session musicians and others who perform on records that get radio play.

"American music is a national treasure that should be protected, and the talent that creates it must be paid fairly for their work," Susan Scanlan, chairwoman of the National Council of Women's Organizations, said in a MusicFirst news release. "That is not possible if the artists who create rock, R&B, jazz, hip-hop, country and more are not fairly compensated by the executives of corporate radio."

The National Association of Broadcasters asserts that the bill would impose an additional financial burden on broadcasters during a recession and, in the worst-case scenario, would force many music-centric stations to another format or even out of business.

Jim Coloff, general manager of family-owned KCVM-FM "Mix 96" and a number of other stations in Iowa, said the bill is an unfair attempt to unilaterally change the rules.

"It's been a relationship for 80 years that radio does not pay a performance royalty and record companies don't pay for play," Coloff said.

"They don't pay any promotional fees at radio stations."

He pointed out that Federal Communications Commission rules prohibit stations from charging such fees.

Any modification to the rules could force changes at his stations, including a possible staff cutback, Coloff said.

"To us, it would be one staff person we wouldn't be able to afford any longer," he said. "That's 10 percent of our staff. In the bigger markets, it would be multiple staff people, several jobs in each market."

A format change at "Mix 96" would be unlikely, Coloff said.

"I don't foresee that would be a choice we'd make, as we have a successful format, but there's talk that some stations would avoid playing music," he said.

Tim Mathews, manager of KFMW-FM "Rock 108" and three other local stations in the Cedar Valley, said costs are high enough as it is.

"We're paying thousands and thousands a year in music licenses already to ASCAP and SESAC," said Mathews, whose stations are owned by the KXEL Broadcasting Co. "It's well excess of $50,000 a year just to play this music."

Only news/talk-formatted KXEL-AM 1540 would not be affected by changes in licensing fees, he said.

"It's worse than a double-dip situation, as far as I'm concerned," Mathews said. "Nobody is saying we should be able to play this music for free. We're paying so much money that this will be another burden for us."

If the Performance Rights Act were to find its way into law, there would be no layoffs at the KXEL Broadcasting Co.'s Cedar Valley stations, which have 28 full- and part-time workers, Mathews said.

"Never; it wouldn't be that severe," he said.

Passage could affect public radio, as well.

"Though noncommercial stations would be paying a smaller fee than commercial stations, this still represents an additional burden," said Mary Grace Herrington, chief executive officer of Iowa Public Radio in Des Moines, which also pays fees to ASCAP, BMI, SESAC and SoundExchange through agreements with the Corporation for Public Broadcasting.

The legislation likely would affect a dynamic between IPR and artists that often doesn't exist between commercial stations and artists, Herrington said.

"We are playing a much higher percentage of artists who write their own material. We are often given this material by the artists themselves," she said. "Much of this material is being promoted by the artist/singer/songwriters themselves."

IPR also works with many smaller, independent labels that are working closely with singer/songwriters, Herrington said.

"These labels are keenly aware of the valuable promotion that airplay provides," Herrington said. "IPR is willing to play up-and-coming artists - artists that have not become household names."

Coloff said the bill has plenty of opposition.

"We've got a nonbinding resolution that opposes any new performance tax that's supported by 256 House members and 27 Senate co-sponsors," he said.

The main concern is that the legislation could be attached to another bill, Coloff said.

"As an industry, this could be crippling to local radio," he said. "We need people to understand what this would affect our stations in our local communities."

CORRECTION: Originally, this story misidentified the ownership of local stations KFMW-FM,KOKZ-FM, KWLO-AM and KXEL-AM. The stations are owned by the KXEL Broadcasting Co., not Cumulus. Cumulus owns KCRR-FM, KOEL-AM/FM and KKHQ-FM.


Load comments