[cma-l] Free Community Radio Seminar

[Two Lochs Radio]

Hi Phil

I wasn't putting that in as information in relation to the seminar specifically, and gave PPL figures because it's them that we had a long argument with, so I was familiar with their broad figures. (The argument was eventually settled broadly in our favour after we considered going to copyright tribunal.)

The figures for admin overhead (roughly 13-15% overall) come from the companies' respective published annual accounts for year-ended 31/12/2009.

‘the top earner gets over £0.5 million annually’
This is a disgrace if we can prove it. Where is this figure published please?

The same source, the annual accounts, gives the figure for the top-earning director at PPL (aggregate emoluments for highest paid director £550,000 - a cut from his £671,000 in 2008). A further £800,000 was shared among all the other directors. There are 234 employees (up over 10% on 2008), and the accounts show that PPL salaries increased 5.2% against inflation of 3.7%.

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PRS is a far bigger operation than PPL, ten times bigger in turnover and almost 4 times as many staff, with a royalty income around £0.5bn pounds in 2009 (which had slumped following a bumper £0.6bn in 2008). Less than a third of its income comes from UK broadcasters.  PRS also has vastly more members to administer than PPL. 

Their top earner, CEO Steve Porter, received about £500k in 2008. He was then asked to leave in July 2009, getting about £200k in pay, £300k in lieu of notice, and over £100k of pension contributions. Having left he has ongoing pension entitlements of course.

The second highest paid PRS employee, Jeremy Fabinyi, received £260k plus £7k pension contributions, for less than 6 months as an Executive Director after Steve Porter left. So their total payment for Chief Executives that year was around £870k.

PRS operates a joint company with MCPS, the MCPS-PRS Alliance which pays the employees, and recharges of employees services in proportion to the MCPS/PRS share of their work. The Alliance has a turnover of £74m (£20m MCPS, £54m PRS) and manages to show a net loss for tax purposes. 

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My suggestion that maybe only 20% of the revenue from community stations goes to the performers is based on a quick desk statistical exercise that suggested that a typical non-profit station (NB this includes 7 commercial licensees in Scotland) would pay about one-fifth of the minimum sum if their royalty payments were proportional to broadcast revenue (85% of advertising+sponsorship). I could be out by a margin either way, the only way to be sure would be to survey all the stations incomes and have a good statistical picture - something that the CMA should have done long ago, as is done accurately in the commercial sector. But the overall point is backed up by PPL (or PRS) stating that the reason for the minimum fees is admin overheads.

So if the flate rate is £636 and your station has a combined advertising and sponsorship income of £10,000 per year without that flat rate your station's royalty would be £255, then the other £381 of your payment is contributing to overheads (if they are telling the truth that the overhead is what accounts for the minimum fee). 

Also a far higher proportion of repertoire from community stations is likely to come from non-PRS members, or music that doesn't figure at all in the statistical sampling, so the artists being played across the sector are probably seeing only the tiniest proportion of their fair dues.

There is of course an argument for charging non-profit stations by TSA rather than broadcast income, since they do not operate to the simple shareholder business model of large commercial licencees. That would also be simpler to administer and should not need a significant minimum figure.

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Hope that helps clarify the basis of the figures.

Alex



  ----- Original Message ----- 
  From: Phil Gibbons 
  To: Two Lochs Radio ; ian at transplan.uk.com ; Tom Buckham ; cma-l 
  Sent: Friday, March 25, 2011 12:48 PM
  Subject: Re: [cma-l] Free Community Radio Seminar


  Thanks for this Alex,

  Certainly some interesting suggestions which I will represent next week at  the seminar.

  Could you clarify some of your figures/claims for me please so I can back them up if needed/challenged? 

  ‘that most of the royalties paid by the smallest stations do not in fact go to the artists and record companies, but in fact are spent on PPL admin overheads!’
  Where is this referenced? This is a PRS seminar and not PPL remember.

  ‘the top earner gets over £0.5 million annually’
  This is a disgrace if we can prove it. Where is this figure published please?

  ‘Overall PPL (for which I have figures) spends 15% of its gross income on overheads, but I would guess that in the not-for-profit sector this proportion is nearer 80%. ‘
  Again, let’s not forget this is a PRS seminar and not PPL. I would be interested in receiving these figures please Alex if you could send me the source.

  I will be there on Tuesday to represent the CMA in my capacity as Council Member and also as an interested stakeholder. I hope it will be a constructive and informative seminar and I will certainly bring everyone’s concerns to the table.

  Regards

  Phil
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