1. Introduction
2. Summary 
3. Beginning of Transcript
4. Licensing Possibilities
5. ASCAP's Legal Authority
6. The Special Case of "Grassroots" Music
7. Problems with Payment for Songwriters
8. Royalty Exemptions
9. Investigations and Prosecution
10. Other Performing Rights Societies
11. Alleged Intimidation  by ASCAP

Please note that this dialogue took place in 1990, and as regulations change over time, the information within is not always up-to-date. 

Introduction
by Michael Allen

The American Society of Composers, Authors and Publishers (ASCAP) is one of two major performing rights licensing organizations in the U.S., and as such its job is to license (collect fees from) the promoters of live music events and distribute that money (minus expenses) to the song writers in the form of royalty checks. ASCAP's 1985 revenues were $245 million, of which about $44 million went for expenses. In contrast, the other major performing rights organization, BMI, had 1985 revenues that were roughly half that of ASCAP, $136 million.

Since the passage of the 1976 Copyright Act, ASCAP has been expanding its licensing efforts to test its legal limits as compared to the 1909 Act which it superseded. One type of event that has come under increased scrutiny in the past few years is the bluegrass festival. As you will read in the transcript that follows, most bluegrass festivals in the midwest are very low-budget affairs, so much so that the performing rights organizations were content just to let them slip by, until recently. Then promoters began receiving form letters from ASCAP that they considered threatening, and bills for per-day flat fees that were clearly outrageous. (One example is the festival in Council Bluffs, IA, which was asked to pay a $600 license fee for an event that grosses $6000 in $12 weekend passes; as a result, that festival will not be held this year.) In addition, non-profit musical events with no admission charges such as jam sessions were being asked to buy a license, which effectively puts an end to oral transmission of folk culture at community evens done simply for the love of the music.

Appealing to ASCAP got no response, or fruitless mechanical responses obscured in legalese and devoid of any understanding of bluegrass festivals, or worse, wrong and inconsistent answers. And the supreme irony is that bluegrass writers are not getting paid the royalties that ASCAP has collected supposedly on their behalf.

It was in this atmosphere of mistrust and anger that Larry Ballenger was approached by ASCAP field representative Ray Gonzalez at a jam session and meeting of the Kansas City Area Bluegrass Music Club on 14 April 1990. What transpired is remarked in the transcript. Larry invited Ray to attend a meeting of bluegrass promoters in Columbia, MO, the following Saturday; in his stead, his boss Mr. Robert Pauley attended.

What this transcript does not convey is the general feeling of the meeting, at least as I saw it. Although they started out nervous and testy, by the end of the meeting I overheard comments from promoters such as "well, I can live with that," and, "if you can't beat 'em, join 'em." And at the end of the meeting, Bob met with promoters one-on-one and discussed their individual festivals; one promoter got his rate reduced from $460 to $79 for a five-day festival. Bob Pauley I think did a brave thing by coming into that meeting, and the increased understanding and better attitude of the promoters present is ample proof that this transcript should be distributed to others who are struggling to understand how and why to deal with ASCAP. In particular, I think, bluegrass festival promoters across the country need to be made aware of, and insist on being charged at, the advantageous Per Concert and Blanket rates, as we found out is being done now in Missouri.

However, as one would expect from such a conservative and litigious bureaucracy, ASCAP didn't see it that way. As a courtesy to Bob I sent a copy of this transcript to him to review for accuracy, some of  his corrections are included in the text. He sent it on to his boss, Mr. Patrick Collins, in Cleveland, OH, who today denied permission for the transcript to be published or distributed in any form. according to Bob, Mr. Collins' main objection was that parts of the transcript taken out of context seem to emphasize ways of getting "out" of paying ASCAP rather than just giving reasons for and urging compliance. He felt that existing pamphlets and form letters were better vehicles for explaining ASCAP policy to bluegrass promoters. I pointed out to Bob that, legally speaking, I do not require permission to publish and distribute his comments, since they were made at an open meeting and he was aware that they were being taped. (This information comes from the general counsel of the Kansas Association of Broadcasters, who runs across this problem frequently.) Bob said something about "I know it's too late to close the barn door now," and mentioned that he had been instructed in the future to not allow tape recording of his comments in such meetings, and if tape recorders are present, to restrict his comments to prepared responses to questions submitted in advance.

I therefore note that this transcript, although it was checked for accuracy by Bob Pauley, is being distributed legally without his consent. That makes this document especially important, because it may be one of the few "straight-answers-to-direct-questions" kind of exchanges that will ever be held with anyone at this level in the ASCAP organization. Secondly, what is this transcript that ASCAP finds so damning? What is it that hits too close to home in terms of giving options to festival promoters?

Summary

Bob mentions several perfectly legal ways of reducing the licensing fee:

• Use a Blanket or Per Concert rate instead of the Festival rate. This rate depends on the admission charge per concert, not the camping fee or total weekend admission charge. In response to a question posed after the discussion, Bob pointed out that one could raise the camping fee and lower the concert admission charge to get a better rate on the schedules. (Of course, there are limits to how much adjusting they'll tolerate!)
• License 100 or more concerts at one time through an association of promoters for a total 25% discount.
• Organize promoters and negotiate with ASCAP for a better rate structure specifically for bluegrass festivals.

• Gospel shows at festivals that are recognizably a worship service.
• Events which have no direct or indirect admission or commercial purpose. ASCAP is naturally pretty aggressive in defining indirect; Bob specifically calls hat-passing an indirect admission charge, whereas his field rep Ray agreed with Larry just the week before at the KCABMC meeting that it was not, and some entertainment lawyers I have surveyed say it's pretty shaky claim in connection with a clearly non-commercial purpose. Of course, who among us wants to test this by being the first one sued?
• Concerts licensed under a Per Concert agreement for which it is proven with a playlist that no ASCAP songs were played. Actually, all this gets you is a refund or credit on money you should already have paid. As pointed out, trying to convince ASCAP ahead of time that you don't have to pay because none of their music will be played is dangerous: it marks you for surprise visits and they might try to trip you up on the jam session issue.

• Produce a chart of the most-played songs on bluegrass radio shows (Bluegrass Unlimited magazine has started one called the "Bluegrass Top 30" in their May issue).
• Determine who wrote the songs played at your festival, contact them in advance and send them some royalty money directly (thus bypassing ASCAP and BMI while still meeting your responsibilities under the Copyright Act), or
• Start a licensing organization specifically devoted to collecting from festivals and distributing to bluegrass artists.
• Join ASCAP as a writer-member, and start asking questions of the people who control distribution.