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Radio Board Members Set Out Their Reasoning

The ‘term sheet’ could help ‘craft a deal on our terms and in the best long-term interest of radio’

Members of the NAB Radio Board Executive Committee are asking radio broadcasters to support them in their strategy regarding performance royalties.

NAB Radio Board Chair Caroline Beasley and colleagues Lew Dickey, Rick Cummings and Randy Gravley set out their reasoning in a letter posted on the NAB website.

“Ridiculous conspiracy theories have been proffered. Apocalyptic analogies have been suggested. The motives of NAB and its leadership have been questioned,” they wrote of reaction to the recent approval of a “term sheet” suggesting that radio could pay performance royalties if it wins certain other conditions.

The four radio executives warned that radio faces the risk of appearing obstructionist in the eyes of some congressional leaders.

“The Performance Rights Act, still vigorously opposed by NAB, awaits only a floor vote in each congressional chamber — action that could come as part of larger, unaffiliated legislation passed after this week’s midterm elections by a ‘lame duck’ Congress,” they wrote.

“That legislation, as Marci Ryvicker, a well-known and reputable financial analyst from Wachovia-Wells Fargo, has estimated, could cost radio between $2 billion-$7 billion annually.”

They backed the leadership of NAB President/CEO Gordon Smith, “a true gentleman” who is “sincerely committed to the issues of radio and has proven exceedingly skillful in dealing with difficult terrain that we are facing inside the Beltway. His hiring gave NAB renewed credibility and instant clout last year. And, to put it bluntly,” they continued, “his hiring may be the only reason the Performance Rights Act has not become law in the current session of Congress.”

As long as radio appears unwilling to discuss an issue of importance to key legislators, “radio’s Washington ‘wish list’ remains dead on arrival,” they wrote. “Any attempt to pass future legislation that would benefit radio will be immediately greeted with a performance fee amendment.” And they warned of possible “amplified collateral damage — in the form of legislative attempts to saddle radio with onerous regulatory hurdles, spectrum taxes, localism mandates, or diminished interference protections.”

The recent “legislative term sheet” put forth by NAB, they say, would help radio “craft a deal on our terms and in the best long-term interest of radio.” It could led to a strengthened foothold in mobile devices, lower streaming rates, the ability to simulcast commercials, more online revenue, removal of the Copyright Royalty Board from rate setting and recognition from Congress and the music industry “that the promotional value of radio is unparalleled in comparison to any other audio platform in existence.”

“Those words, signed by the president and written into law, will be what radio points to should the music industry ever have the audacity to ask for more.”

The NAB letter is here. Read the NAB term sheet here (PDF).