More smoke is emanating from ASCAP HQ — and it doesn’t look good for songwriters.
Last week, we first reported on a leaked ASCAP memo sent to hundreds of thousands of members, one that pointed to serious disruptions in the US-based performance royalty marketplace. The letter, from CEO Elizabeth Matthews, described significant drops in collections due to COVID-19 shutdowns. It also warned that songwriter payments would be delayed by weeks.
The serious drops being witnessed in performance royalty revenue aren’t surprising, unfortunately. The broad shutdown of ‘non-essential’ physical stores, venues, offices, and other public places means that no music is being played — and therefore, no public performance revenue is being collected. But why is ASCAP delaying its payments from plays that occurred during the third quarter of 2019 — i.e., more than six months ago?
ASCAP has refused to comment on the matter, while insiders report that top executives like CEO Matthews and President Paul Williams are declining to take pay cuts to weather the storm. That’s in sharp contrast to reactions by other major industry execs. For example, just this morning, Live Nation CEO Michael Rapino agreed to forego his multi-million dollar salary, a move that follows similar announcements by top executives at Disney, iHeartMedia, and CAA. Even worse — ASCAP is now forcing its own songwriters to forego their payments — while executives are receiving their healthy paychecks and benefits on time.
Now, there’s more information being leaked on this situation.
It now appears that ASCAP isn’t making its member publishers wait for their royalties — just their songwriters and composers. According to a letter sent by the aforementioned Williams to member publishers, dated ‘March 2020,’ payments for the third quarter of 2019 were sent out without problem.
“Dear ASCAP member,” the seemingly routine letter opens. “Enclosed is your first domestic publisher statement of the year, reflecting US performances of your music between July and September of 2019. This distribution also includes royalties from our annual surveys of symphonic, recital and educational concert performances.” We’re presuming a check was also included (or amounts wired).
That, according to our sources, is completely different than the letter sent out to songwriters and composers, a group that typically controls a limited catalog (unlike a publisher, which would oversee far greater song collections, even vast catalogs).
At this stage, it’s unclear where mega-publishers like Sony/ATV, Warner Chappell, and UMPG stand in this, though it’s likely they’ve been properly paid.
Sadly, the reasons for the uneven payments could be calculated: publishers have staffers to make sure that public performances are verified and paid on time. They also have lawyers and industry connections, which most individual songwriters and composers lack.
More as this develops. Written while listening to Mija.
ASCAP Is a ponzi scheme
All I have known from this industry is fraud and deception.
I’m so glad it’s all coming to an end
Musicians need to find our own power
No more middle men
No more entertainers
We need to ice these people out!
The music monopoly is dead
With ur feet in the air bitches
Love watching it all fall down finally!
THANKS PAUL FOR REPORTING THIS!!!!
I’m not sure how an email that was sent to hundreds of thousands of ASCAP members (I am one of those) is a “leaked memo”. In any case…
One thing this article misses is that the publisher distribution (as an independent songwriter/artist, I am self-publishing, so both a publisher and writer member of ASCAP) was on March 20th, so had obviously been in process for some time prior to the actual transfer of funds. The writer distribution was scheduled for April 6th, and the email indicates it will be delayed until April 28th. There was nothing to suggest that specific distribution should be lower. It should exactly match the March 20th publisher distribution for anyone who is their own publisher (and the relevant shares of the publishing distribution attributed to a given writer’s songs for writers who have a separate publisher that publishes more than one writer).
From what the message said, the issue on the delay is one of cash flow timing — i.e. when will they have the money in the bank to pay the distribution? — due to the lowered collections related to the business effects of the pandemic. We can debate whether how they deal with sequencing of payments versus plays versus collections is a sensible way of doing things, and also whether top management should be taking pay cuts to offset the cash flow issues, but there wouldn’t seem to be anything nefarious on the front of publisher versus writer distributions. Rather, it is the “luck” of timing of those distributions versus the the pandemic-related effects on ASCAP’s cash flow if they are paying for past distributions out of current collections (which appears to be the case).
Of course, the memo also suggests the likelihood of lowered payouts in the future since ASCAP can only distribute what it is paid, and if there are lower revenues, there will obviously be lower payouts. But the relevant publisher and writer shares for any plays should be identical, even if the timing of distributions varies (which has been the case all along for domestic performances).
I guess I’ll see on April 28th if my writer distribution is actually lower than my publisher distribution is. There is nothing in the message from ASCAP to suggest that will be the case, though.
Since you are a self-publishing Writer, you know that ASCAP always pays their Publisher Distribution for a given quarter the month before they pay their Writer Distribution for that same quarter, despite the underlying work being the same (which is why SESAC & BMI can pay both Writers and Publishers at the same time for a quarter – there isn’t any extra incremental work for Writer Distributions on top of what is required for Publishers, it is just an ASCAP policy.)
The March 2020 Publisher Distribution was for Q3-2019 Performances.
The Writer distribution scheduled for April 6th (now postponed to April 28th) is also for Q3-2019 Performances.
Is your assertion that ASCAP didn’t understand that their choice to fully fund the Q3-2019 Publisher Distribution would leave them unable to fund the Q3-2019 Writer Distribution that was scheduled to follow 17 days later?
As I said in my response above, it sounds to me like it is purely a cash flow issue, where they are running on current cash (which is what the email basically said — that was the big surprise to me in that you’d think they’d be paying past quarters based on collections for those past quarters). And, as you indicated, this is the way ASCAP has always scheduled their distributions. We can debate whether that is or isn’t a good way to do things, but there is nothing new here.
To try and give an extremely simplified example on the cash flow thing, let’s say you have a normal monthly income of $100 (to use a round number without lots of zeros). You have two bills of $99 coming up, one you plan to pay in early March and one you plan to pay in early April, and you normally pay each in the month with its due date early in the month, using the income you got from the previous month. Let’s say the first one is due in March, and your February income is the same as normal, so you pay that bill as you normally would, leaving $1 in your bank account after paying that bill in early March. But your income during the month of March tails off because your customers are skipping payments, delaying payments, etc. due to various hardships they are facing. Money is coming in, but it is much slower than normal, and you know you won’t have the full $99 you need to pay in April by your scheduled payment date early in the month. You still need to pay that money, but you won’t have it on time, so you need to delay your payment until you have the cash. So you try to figure out when you’ll have it and reschedule the payment for that date.
This is obviously simplified beyond the low numbers in that ASCAP is likely collecting money year-round and doesn’t have distributions every month. But cash flow is cash flow — you can’t pay an amount of money you don’t yet have on hand.
I don’t think that anyone is confused by the concept of cashflow.
But attempting to use “cashflow” toexplain away a choice to pay ALL of your cash on-hand for a Distribution Quarter (Q3 – 2019) to 1/2 of your membership base is disingenuous at best and criminal at worst.
All PROs/MROs globally have to determine how much cash is available to fund a given Distribution quarter, and there is no distinction between Licensing fees received for the “Publisher Share” or the “Composer/Author Share” (in quotes because it is an artificial distinction – these shares are not licensed separately.)
That ASCAP chooses (and has historically chosen) to pay Publishers first and Writers the following month for each Quarter’s Royalty Distribution should not be used as an argument for considering them as separate events with separate Licensing fee funding pools. That is fiction that favors ASCAP’s wealthier and more powerful Publisher Members over their Writer members (who will be much more severely impacted by a 3-week – at best – cashflow delay.)
And, sadder still, the ASCAP Members who are being damaged by ASCAP’s choice to favor one Member category over another ARE THE VERY SAME MEMBERS WHO CREATE THE PRODUCT THAT ASCAP LICENSES!
Further still , the ASCAP Publisher Members who WERE paid their Q3-2019 Royalties on time, ARE ALSO EARNING THEIR ROYALTIES FROM THE LICENSING OF PRODUCT CREATED BY THE INDIVIDUALS WHO ARE NOT BEING PAID TIMELY!
We can debate the merits and relative contributions of PROs, MROs and Publishers to the overall Musical Work Licensing and Royalty payment ecosystem – but it is an inarguable fact that the CREATORS of the Intellectual Property Artwork that supplies the value chain are the Composers/Authors – the very people who, apparently, feed last – on whatever is leftover after the powerful feed. And this time, nothing has been left for them at all.
The “cashflow” shell-game and artificial distinctions don’t hide the fact that a choice was made to advantage Publishers over Writers with regard to Q3-2019 Royalty Distribution.
Why is it at all acceptable to you that the individuals who are the very engine of this industry are the only ones involuntarily made to sacrifice?
sounds bout right
You Got Knocked The FUCK OUT
What a brilliant contribution to the conversation.
Such an articulate, cogent and well reasoned point.
Effing troglodytes (I’m surprised that you could solve the captcha equation required for posting)
You scarred LOL
Hahahahahahahahhahahahahah
Isn’t 50 cent signed to ASCAP?
HAHAHAHAHAHAHAHHAHAHAH
Better lay low mother fucker
With ur good grammar and you vocab won’t save u from a beat down
Ha Ha
@”Quizzing Shill”
Quiet now – the grown-ups are talking.
The truly sad thing is that you don’t seem to understand that the point that I made initially with my rhetorical question to Rick Paul was the same point that you seem to be trying to fumble toward with your blithering “haha” and profanity-laced spew.
You really should read more and type less.
Rappers And Their Gang Affiliations
Rap Genius
This list is made to inform Hip Hop fans of rappers’ gang affiliations based on references in their… read more »
A
• Awol
•
B
• B-Brazy
• Baby Half Dead
• Batman
• B Real
• Baby Popa Smurf
• Bosstop
• Ballout
• Big Freeze
• Big Hawk (damus)
• Big Pun
• Big Wy
• Birdman
• BG Knocc Out
• BG Scarface
• Billionaire Black
• Bobby Shmurda
• Bodi Deeder
• Bone Thugs N Harmony
• Broncoe
• Brotha Lynch Hung
C
• Cam’Ron
• Cardi B
• Chief Keef
• CK
• Cdai
• C-Note
D
• D. Rose
• Daylyt
• DJ Quik
• Dock B
• Duke Da Beast
• Duv Mac
•Dresta
E
• Edai
• Eazy E
• Eightball (damus)
F
• Fat Joe
• FBG Duck
• Fredo Santana
G
• G-Bone
• G-Sexx
• G-Len
• Game
• Gino Marley
• Green Eyez
• Gunplay
H
• Half Dead
I
• Ice T
J
• Jay Rock
• Jayo Felony
• Joe Moses
• Joey Fatts
• June Dawg
K
• K-Low
• Keystone
• King Louie
• Koolay
• Kutt Calhoun
• Kurupt
L
• LEP Bogus Boys
• LA Capone
• Removed
• Lil Amp
• Lil Bibby
• Lil Durk
• Lil G-Bone
• Lil Hawk
• Lil Herb
• Lil Jay
• Lil JoJo
• Lil Laniak 2
• Lil Marc
• Lil Mister
• Lil Reese
• Lil Stretch
* Lil Wayne
* LP Rambo
M
• Mack 10
• Mac-11
• MC Eiht
• MC Ren
• Migos
• Mr Dulo
N
• Nate Dogg
• Nini X
• Nipsey Hussle
O
• OBG Evil Curt
• OTF NuNu
• OG Mad Eye
P
• P. Rico
• Peanut 2 aka KP
• Pimp D
• Pops
Q
R
• Redrum 781
• RondoNumbaNine
S
• Scarface
• ScHoolboy Q
• SD
• Shadee Doe
• Sin Loc
• Sinister
• Six Pac
• Smylez
• Snoop Dogg
• SPM
• Spyder
• Stunt Taylor
• SODMG
T
• TF
• Tip Toe
• TK 2
• TK 3
• Troll Loc
• Twin Loc
• Tech N9ne
U
V
• Vince Staples
W
• Whodi
X
• X-Raided
Y
• Yank
• YG
• Young Toni Montana
• Young Chop
• Young Thug
They sound like reasonable fellows
Didn’t Mariah Carey just sign with ASCAP?
Didn’t she just have a record breaking Christmas season?
Will she be getting any of that money or are those millions missing too?
That’s Q4 earnings
Y’all can’t even get Q3 earnings right!
Are we supposed to still pay taxes on Q3 Q4 earnings
Even though we have not received payment?
So… I’m not getting paid AND I have to pay the tax anyway? WTF???
I’m looking at this one and thinking, hmmmm. Few obvious alarm bells ringing all at the same time. Might be a fraud situation. That money is more than 6 mos. old, payable 6 full months ago. Looks like a cash crunch at best and criminal fraud at worst. Oh well, let’s see which.
I bet they spent a bunch of money on big advances luring writers to ASCAP, invested the rest to make some money off of the 6 months float. Then market crash and “oh no!” we lost the money!
It honestly comes down to this; ASPCA Executives are naturally untalented. They lack basic mental education, and cannot function in another job market due to self greed. ASPCA Executives rely on the TALENT that songwriters/composers naturally are born gifted with, thus the Execs MUST steal from the gifted composers due to their lack of natural ability, education and honesty. This situation that the executives are displaying is a firm testimonial of what I just wrote! I hope to God that the executives in ALL music management organizations collapse financially and emotionally. Executives have caused this and placed it upon the songwriting talent; they have caused emotional hell for the talented. It’s the executives turn! We will do all in our power to crush the executives jobs and careers. This is rebuild time for songwriters! Executives, Audios!
And in the end, people will complain, but few will act (sue, leave for another PRO, etc.). Lazy and pathetic whiners.