<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META content="text/html; charset=windows-1252" http-equiv=Content-Type>
<STYLE>.hmmessage P {
PADDING-BOTTOM: 0px; MARGIN: 0px; PADDING-LEFT: 0px; PADDING-RIGHT: 0px; PADDING-TOP: 0px
}
BODY.hmmessage {
FONT-FAMILY: Tahoma; FONT-SIZE: 10pt
}
</STYLE>
<META name=GENERATOR content="MSHTML 8.00.6001.19019"></HEAD>
<BODY dir=ltr class=hmmessage bgColor=#ffffff>
<DIV><FONT size=3 face=Calibri>Hi Phil</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.)</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>The figures for admin overhead (roughly 13-15%
overall) come from the companies' respective published annual accounts
for year-ended 31/12/2009.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV>
<DIV><FONT face=Calibri><FONT style="FONT-SIZE: 12pt" color=#800000><EM>‘the top
earner gets over £0.5 million annually’</EM></FONT></FONT></DIV>
<DIV><FONT color=#800000>This is a disgrace if we can prove it. Where is this
figure published please?</FONT></DIV></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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 t</FONT><FONT size=3 face=Calibri>he accounts show that
PPL salaries increased 5.2% against inflation of 3.7%.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>--------</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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. </FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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. </FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>---------</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT><FONT size=3
face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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).
</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>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.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>--------------</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>Hope that helps clarify the basis of the
figures.</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri>Alex</FONT></DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<DIV><FONT size=3 face=Calibri></FONT> </DIV>
<BLOCKQUOTE
style="BORDER-LEFT: #000000 2px solid; PADDING-LEFT: 5px; PADDING-RIGHT: 0px; MARGIN-LEFT: 5px; MARGIN-RIGHT: 0px"
dir=ltr>
<DIV style="FONT: 10pt arial">----- Original Message ----- </DIV>
<DIV
style="FONT: 10pt arial; BACKGROUND: #e4e4e4; font-color: black"><B>From:</B>
<A title=phil@bcfm.org.uk href="mailto:phil@bcfm.org.uk">Phil Gibbons</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>To:</B> <A title=tlr@gairloch.co.uk
href="mailto:tlr@gairloch.co.uk">Two Lochs Radio</A> ; <A
title=ian@transplan.uk.com
href="mailto:ian@transplan.uk.com">ian@transplan.uk.com</A> ; <A
title=t.buckham@futureradio.co.uk
href="mailto:t.buckham@futureradio.co.uk">Tom Buckham</A> ; <A
title=cma-l@commedia.org.uk href="mailto:cma-l@commedia.org.uk">cma-l</A>
</DIV>
<DIV style="FONT: 10pt arial"><B>Sent:</B> Friday, March 25, 2011 12:48
PM</DIV>
<DIV style="FONT: 10pt arial"><B>Subject:</B> Re: [cma-l] Free Community Radio
Seminar</DIV>
<DIV><BR></DIV>
<DIV dir=ltr>
<DIV style="FONT-FAMILY: 'Arial'; COLOR: #000000; FONT-SIZE: 10pt">
<DIV>Thanks for this Alex,</DIV>
<DIV> </DIV>
<DIV>Certainly some interesting suggestions which I will represent next week
at the seminar.</DIV>
<DIV> </DIV>
<DIV>Could you clarify some of your figures/claims for me please so I can back
them up if needed/challenged? </DIV>
<DIV> </DIV>
<DIV><FONT face=Calibri><FONT style="FONT-SIZE: 12pt"><EM>‘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!’</EM></FONT></FONT></DIV>
<DIV>Where is this referenced? This is a PRS seminar and not PPL
remember.</DIV>
<DIV> </DIV>
<DIV><FONT face=Calibri><FONT style="FONT-SIZE: 12pt"><EM>‘the top earner gets
over £0.5 million annually’</EM></FONT></FONT></DIV>
<DIV>This is a disgrace if we can prove it. Where is this figure published
please?</DIV>
<DIV> </DIV>
<DIV><FONT size=3 face=Calibri><FONT size=3 face=Calibri><EM>‘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%.
‘</EM></FONT></FONT></DIV>
<DIV>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.</DIV>
<DIV> </DIV>
<DIV>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.</DIV>
<DIV> </DIV>
<DIV>Regards</DIV>
<DIV> </DIV>
<DIV>Phil
<DIV
style="FONT-STYLE: normal; DISPLAY: inline; FONT-FAMILY: 'Calibri'; COLOR: #000000; FONT-SIZE: small; FONT-WEIGHT: normal; TEXT-DECORATION: none"><FONT
size=3
face=Calibri></FONT></DIV> </DIV></DIV></DIV></BLOCKQUOTE></BODY></HTML>