BMI Sale to Private Equity: Major Red Flags for Songwriters

Submitted by jon on Wed, 08/23/2023 - 21:02

The Crucial Role of Performing Rights Organizations

Performing rights organization BMI is exploring a sale to private equity, and songwriters are right to be extremely concerned. As a passionate industry observer and advocate for fair creator compensation, I'm taking a deep dive into what this deal could mean for writers' incomes.

For those less familiar with the complex world of music royalties, PROs like BMI play a crucial role. They don't own any copyrights themselves. Rather, they handle the administration of public performance royalties - collecting money anytime a song is played on radio, TV, live venues, and more. They then distribute these earnings to publishers and songwriters.

BMI paying out less money would have a direct and damaging impact on what writers take home. And there are already some seriously troubling signs that is exactly what could happen under new private equity ownership.

BMI's Recent Profit Increases - But Who Benefits?

Since BMI switched to a for-profit model last year, its profits have apparently skyrocketed, increasing by over $100 million annually. Yet BMI has not made clear whether songwriters themselves are benefiting at all from these newfound gains. That raises a big question - who stands to profit most from a sale?

Unfortunately, it's not looking good for creators. BMI's current owners are broadcasters who regularly play the songs BMI represents. They could walk away from a sale with massive payouts, essentially getting rebates on licensing fees paid in the past. What a nice windfall for the broadcasters! For songwriters, not so much.

Private Equity Takeover Concerns

Even more concerning are the aggressive profit goals inherent to private equity takeovers. A new owner laser-focused on maximizing returns on investment could easily achieve this by slashing royalty rates and payments, severely damaging creators' livelihoods.

Of course, BMI is making assurances that writers' interests will remain a priority under any new ownership. But frankly, those ring hollow without concrete details on commitments to protect songwriter compensation. Vague corporate platitudes don't cut it.

The Wider Context of Musician Income

Especially given the already perilous situation regarding music streaming income. With Spotify and others notoriously underpaying artists, reductions in PRO distributions would only pile insult upon injury. This comes at a time when many musicians are barely scraping by as is.

A Lack of Transparency and Accountability

As an industry observer dedicated to exposing shady dealings that exploit artists, I believe BMI owes some serious answers on exactly how this deal would avoid harming songwriters financially. The music community deserves transparency and accountability.

If the finalized sale terms end up prioritizing profits over fair compensation for creators, BMI should expect major opposition. Musicians have organized before against corporate interests trying to enrichment themselves at artists' expense. We can and will do it again.

Wrapping Up

I'll be following this story closely as it develops, and shining a light on how it could impact songwriters. Their futures and livelihoods remain on the line. Stay tuned for more coverage from an advocate's perspective.

Is it time for the US to eliminate private PROs and shift to a centralized public model like many other countries have? This would take a major effort and likely require rewriting aspects of copyright law like the Digital Millennium Copyright Act. But perhaps that's the level of change we need to truly put songwriters' interests first. I'd love to hear your thoughts in the comments.