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New NAB Head Says ‘There Is No More Money’ for Performance Royalties

Gordon Smith calls for reallocating current fees

“There is no more money. How we divide up the money that exists is the real issue.”

That’s how NAB President/CEO Gordon Smith characterized the current battle over performance rights this week, in a speech before the Media Institute. Describing both the radio and record businesses as “mature” industries, Smith said for 80 years, there was an unspoken agreement between radio and performers, he said, “free play for performance.”

“The Internet broke that model. Radio didn’t break that model,” he said. Smith told attendees radio spends roughly half a billion dollars a year on music royalties, saying the money needs to be “re-shuffled.”

He warned that given the stark economic realities, stations have been driven over the edge. “You can buy radio stations all over this country for a dime.” Pushing stations for more music royalties, especially those airing music formats, may turn to talk formats instead, he said, like “all Rush, all the time.”

Smith’s comments came hours before other NAB representatives met with music industry reps and members of the House and Senate Judiciary Committees to discuss performance royalties.