FAC Challenges Kickbacks

As the kickback comes in the form of a rebate, the show cost for royalties that appears on the settlement would be a larger figure than the actual amount being paid.

“We have been made aware of a practice that has been occurring in The Netherlands for maybe 10 years which has recently come to light. It affects larger acts more but the principles are the same for all our members,” said the FAC email warning of the practice.

“As you know the performance right for songs is licensed by collecting societies [representing songwriters] to venues and promoters. Typically a percentage of box office receipts (3 percent in the UK); the rates vary in Europe,” it continued.

“The rate in Holland is 7 percent of box office for gigs with an income of euro 1,000,000-plus. This figure has been used when accounting to agents, promoters and bands.

“However promoters have been receiving a rebate of the published rate from local collecting society BUMA/STEMRA and not accounting this to artists.

“PRS is aware of this and have had discussion with BUMA to make the process more transparent.”

The email also advised such actions as making agents aware and negotiate with promoters on the basis that the realised tariff will be 5.25 percent and not 7 percent, and checking performance income statements to see if the act’s receiving the amount a promoter has deducted from the settlement. FAC claims it’s also investigating what’s happening in other territories, but it wasn’t possible to get further detail at press time.