Radio Royalties May Get Lame-Duck Congressional Consideration

In response to the Friday announcement by the House Judiciary Committee that it will markup the American Music Fairness Act this week, the NAB's President and CEO Curtis LeGeyt released the following statement:

"More than 250 bipartisan cosponsors of the Local Radio Freedom Act, including a majority of the House of Representatives, stand with America’s local broadcasters against this onerous performance fee that would irrevocably damage local radio. In spite of this, the recording industry continues its uncompromising pursuit of this one-sided proposal that would upend the relationship between artists and broadcast radio.

"NAB remains committed to working to find a mutually beneficial solution to this decades-old policy disagreement, but this AMFA proposal is not the answer. A markup of this legislation as drafted simply ensures that yet another Congress will pass without meaningful progress on this issue."

On background: The American Music Fairness Act would mandate a new performance tax on free, local radio stations that would jeopardize local jobs, prevent new artists from breaking into the recording business and harm the hundreds of millions of Americans who rely on local radio. 

According to the NAB, broadcasters have gained the strong bipartisan support of legislators from across the country to support the Local Radio Freedom Act, which opposes a performance tax, and is supported by more than 250 members of the House and Senate. 

NAB's Position

Congress should not mandate a performance tax on free, local radio stations that would jeopardize local jobs, prevent new artists from breaking into the recording business and harm the hundreds of millions of Americans who rely on local radio.

Broadcasters urge legislators to support the Local Radio Freedom Act, which opposes a performance tax, and is supported by nearly 250 bipartisan members of the House and Senate. Additionally, broadcasters ask legislators to oppose any performance tax proposal.

Here's why:

For nearly a century, record labels and performers have thrived from airplay - which is essentially free advertising - from local radio stations. But as the big record labels struggle to keep profit margins high, they are urging Congress to impose a tax on these local radio stations that are, ironically, their greatest promotional tool.

Each Congress, the record labels push policymakers to impose a new fee on local radio stations simply for airing music on the radio. This would financially cripple local radio stations, harming the millions of listeners who rely on local radio for news, emergency information, weather updates and entertainment every day.

Radio's free promotion is worth more than $2.4 billion annually to record labels. Local radio continues to be the top source for listeners seeking new music, far surpassing other sources. Free radio airplay provides the recording industry increased popularity, visibility and sales for both established and new artists. Promotion by local radio goes beyond music to include concert and festival promotion, on-air interviews and social media marketing.

Recognizing the promotional value of free radio airplay, Congress has repeatedly rejected the record labels' attempts to impose a harmful performance tax on local radio stations. Efforts to attach a performance tax to consensus legislation that benefits all stakeholders, such as the Music Modernization Act, have failed once exposed as the poison pill it is.

The Local Radio Freedom Act (H. Con. Res. 33, S. Con. Res. 9), which opposes any new tax, fee or royalty on local radio stations, historically enjoys strong bipartisan support in both chambers. In stark contrast, performance tax proposals have struggled to gather supporters in Congress because members of Congress understand the devastating effect they would have on local radio. This is every bit as true for the 117th Congress' so-called American Music Fairness Act, which would hit radio broadcasters at a time when they're struggling to recover from the financial impact of the pandemic.