David Rehr email to NAB members on performance royalties

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From: "David K. Rehr"
Subject: Performance Tax Update
Date: Wed, 7 Nov 2007 16:47:12 -0500
To: XXX

I want to provide you with a quick summary of what we expect the Recording Industry Association of America (RIAA), the lobbying organization for the foreign owned record labels, to do as they campaign to impose a performance tax on local radio. I want you to be informed of their anticipated activities and further strengthen your resolve to oppose this initiative.

1. Rep. Howard Berman (D-CA-28), RIAA and their allies have spent many months working on legislation to impose a performance tax on local radio. They have spoken with members of Congress to co-sponsor this legislation and will attempt to create momentum for this bill by utilizing the power of the press and leveraging their rhetoric. They may even have found a Senate sponsor so an identical bill is introduced in that chamber. Just as our opposition has created news in the general press and in industry publications, their announcement will too. Expect to see media coverage of this event and our response in as many venues as possible.

2. Once the Berman legislation is introduced, we will send all 13,939 radio stations across the country an Action Alert urging you to contact your members of Congress to oppose the performance tax legislation. You will receive all the information you need to execute this message.

3. Our congressional allies have launched a bipartisan pro-radio legislative offensive. Reps. Gene Green (D-TX-29) and Mike Conaway (R-TX-11) have introduced H. Con. Res. 244, the "Local Radio Freedom Act." We are adding supporters to the bipartisan legislation every day and currently have the support of more than 60 House members. You will also likely receive a call from the NAB staff in Washington if your member of Congress has not yet cosponsored this important legislation.

4. We are working closely with the state association executives as the leaders of our ground troops. They will contact each congressional delegation, but they alone cannot make your case. Congressional offices need to hear from a multitude of parties, including the stations in their own backyard, to fully understand and appreciate our intense opposition to the performance tax.

5. We expect Rep. Berman's legislation could include exemptions for certain broadcasters and perhaps others as a way to diffuse opposition to this legislation. But make no mistake: it is the clear goal of the RIAA and the record label executives to have this levy apply to all stations. Including exemptions in legislation is a typical way legislators try to "ease in" controversial measures and over time work to eliminate the exemptions. If your company falls under the exemption, your relief will be very short lived. The Copyright Registrar has already said on the record that anyone who airs recorded music should pay this tax. You can read the record labels' propaganda here.

6. We must stay on message. Our opponents dislike the fact that we have framed this issue, appropriately, as a "tax." Despite the fact that enactment of this legislation would be a government mandated levy on local radio, the record labels would prefer to debate this issue as a so-called "performance right" and you can see why. Members of Congress do not want to support a tax and that is why our message is very powerful.

7. We anticipate that this could be a long battle. The RIAA and the record labels have not been able to adjust their business model to reflect the new realities of the digital age. They are seeking a new source of revenue, plain and simple. And unfortunately, they are in essence biting the hand that feeds them by seeking to earn that revenue on the backs of their number one promotional vehicle – local radio. They will fight hard, expend resources and use political capital to try to enact this legislation. It will be a battle of will and perseverance. We must all prepare for the battle.

8. We have a plan and we will continue to unveil our strategy as we continue through the campaign. We will keep you updated on our efforts on Capitol Hill. And we will provide you with all the tools to make the arguments and turn up the visibility of this issue in every community in America.

9. With your help, we can achieve success. The NAB Radio Board of Directors, the great members of the radio industry and our talented staff at NAB have the tools and resources to be successful in this fight. It may be hard. It may be rough. But, working together and executing our plan will bring us success.

You are the key to victory. We need you to take action. We need you to educate your employees and coworkers on the consequences of this performance tax being imposed on your business. We need you to take this personally, because to tax your local stations billions of dollars simply to line the pockets of international record executives is personal.

We are embarking on a great crusade for the future of radio. I am proud of all of our efforts to date and am confident in our cause. Thank you for all you are, and all you do.

Best wishes,
David K. Rehr
NAB President and CEO