Articles Tagged with ASCAP

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We’ve previously discussed the necessity of club owners and restaurateurs to pay the Performing Rights Organizations (“PROs”) for use of live and recorded music. Depending upon the egregiousness of the failure to pay, the obligation might not be dischargeable in bankruptcy. So, if you’re not licensing the music, what can you do when you get the dreaded demand letter and threat of litigation from ASCAP, BMI or SESAC? You may have some room to negotiate.file0001631184133

Of the three PROs, ASCAP is the most litigious. For example, in May 2015, ASCAP filed copyright infringement suits against seven recalcitrant clubs and restaurants across the country (including one in Atlanta, GA). And while, as a club owner, it may seem unfair to have to obtain licenses from each of the three PROs, bear in mind that by playing unlicensed music, the club is getting a free ride at the expense of the songwriter.

ASCAP President and Chairman, songwriter Paul Williams (check out Paul Williams in the high-camp bomb, Phantom of the Paradise) noted: “We want every business that uses music to prosper, including bars and restaurants. After all, as songwriters and composers, we are small business owners, too, and music is more than an art form for us. It’s how we put food on the table and send our kids to school. Most businesses know that an ASCAP license allows them to offer music legally, efficiently and at a reasonable price – while compensating music creators so we can earn a living from our work and keep doing what we do best – writing music.”

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sheet musicEvery time a restaurant, nightclub or other performance venue permits performance of a song (such as by radio (with certain exceptions), CD or live performance), the venue owes to the rights holder of the song a royalty for playing that song. In order to collect and administer these royalties, membership organizations known as “PROs” (Performance Rights Organizations) have evolved. The PRO membership is composed of songwriters, composers and music publishers. The PROs charge the clubs a licensing fee, which they then collect and distribute to their membership rights holders as royalty payments. By compliance with this rights licensing system, a night club is assured that it is complying with U.S. copyright law, which protects the rights holders’ right to perform the song.

In the United States there are three principal PROs: SESAC (“Society of European Stage Authors and Composers”, the smallest), BMI (“Broadcast Music, Inc.,” the middle bear), and ASCAP (“American Society of Composers, Authors and Publishers,” Papa Bear). When a performance venue fails to pay its royalties to a PRO, the PRO will come after the club to exact its pound of flesh.

Twister’s Iron Horse Saloon was a bar in suburban St. Louis. It failed to pay public performance licensing fees to ASCAP for a number of years. Over this period, ASCAP made numerous efforts to collect the licensing fee, even offering to settle the claim before suing. Finally, unable to collect the fees voluntarily, ASCAP sued the club and its managing members, including one Doug Walker, for copyright infringement and obtained a judgment for $41,000. The club eventually failed, and Mister Walker sought to discharge the ASCAP judgment against him through a chapter 7 bankruptcy.

A fundamental concept of chapter 7 bankruptcy is that an honest debtor will receive a discharge (extinguishment) of virtually all his debts upon completion of the bankruptcy process. He’ll walk away with a ‘fresh start’. I assume Mister Walker believed he would discharge the ASCAP debt in his bankruptcy. Mister Walker was wrong. Continue reading