Following adoption Monday by the NAB Radio Board of a “terms sheet” for potential Performance Rights legislation, the other party to the negotiations – musicFIRST – sent a statement to RBR-TVBR and other news outlets criticizing it for modifying some of the terms from where negotiations stood in July. That’s prompted NAB to fire back with its own criticism.
“We are disappointed by comments from our friends at musicFIRST representing that there was a definitive July agreement or a handshake settlement with NAB on terms for resolving the performance royalty issue. This is demonstrably false. If this were true, why would our two sides have continued with negotiations in August, September and October?” said a statement Tuesday (10/27) from NAB President and CEO Gordon Smith.
According to the musicFIRST statement, it wanted the NAB board to vote on the July framework made public in early August without any changes. The major change in the term sheet adopted this week by the NAB directors was the addition of what to do if the combined efforts of the NAB, RIAA and musicFIRST to get Congress to include a radio chip in cell phones mandate. The NAB proposal would reduce the proposed performance royalty fee from 1% to 0.25% in the beginning, thereafter rising only as the market penetration of radio-enabled cell phones grows in the United States. musicFIRST has not said what specifically it objects to in the NAB terms sheet, but anything below a 1% fee would appear to block US labels and artists from tapping reciprocal royalty payments collected in other countries.
RBR-TVBR observation: If you were thinking that this was a done deal, think again. This is not just a very contentious issue on the broadcaster side, but on the record industry side as well.