Is BMI Selling or Are They Selling Out Songwriters? [Bill Werde]
BMI: Another Reason Why the Industry Needs Transparency from PROs.
Why Songwriters Need to Stop Worrying and Love A Union.
By Bill Werde
A version of this essay first appeared in Bill Werde’s free, weekly Full Rate No Cap email. Werde is a former Billboard Editorial Director and Director of The Bandier Program for Music and the Entertainment Industries of the Newhouse School of Public Communications at Syracuse University. Taylor Swift played the Billboard cafeteria for Werde and a small handful of other editors when she was 16 years old and just starting to break.
Much of the talk in the publishing world these days centers on the potential sale of BMI, and how such an event would affect writers. If BMI sells, there will likely be a multi-billion price tag price. Should BMI writers participate in that? If a for-profit BMI is run by private equity, presumably, profit will be taken from the pool of money collected. Will that reduce payments for writers? In the last full year that BMI reported, they took in $1.573 billion and paid out $1.471B. For context, total U.S. publishing revenue was $5.6 billion last year. Anything that happens to BMI is of critical importance to the publisher and songwriter communities.
This week brought about two really compelling reads on the potential sale. First, you have the always-sharp Ed Christman at Billboard, giving a platform to those who would counsel a wait-and-see approach. And then you have the always-sharp Music Business Worldwide publishing this interview with Lucas Keller, CEO of Milk & Honey; the interview is about many things, but towards the end, Keller weighs in on BMI and … counsels a wait-and-see approach. (If you’re still playing catch-up on the BMI sale, you can check out this in-depth explainer on the whole matter.)
I have no idea if this is a coordinated press effort by BMI (if so, it’s damned well-executed), but I do know that it only took me a few calls before I had tracked down at least one manager of hit writers who had recently jumped ship from BMI to go to ASCAP. They said it was motivated by the pending sale, and that they felt that BMI services and resources had tightened a bit during this run-up to sale. Certainly, it’s factually true that just over a year ago, BMI laid off nearly 10 percent of its workforce, even as total revenue collections were ostensibly growing. One might assume that cost cutting, to create the best possible books—and ultimately the best possible multiple for sale price—would be the case for any company looking to sell.
If 25 years in the music business has taught me any one thing, it’s this: leaders rarely hide the truth when it’s good.
But this is not a condemnation of BMI. I spoke to a handful of other writer managers and writer attorneys who were themselves taking a wait-and-see approach. Many of these folks were quick to point out that they wouldn’t have been able to launch the careers they were managing without initial advance checks from BMI, and they felt loyal to BMI because of that. And the very fact that the one manager had bolted was, in a certain way, evidence of why “wait and see” might be the prudent approach. Most deals on BMI are for 1-3 years. The biggest stars are almost always on the shorter end of that range. These are not long-term lock-up deals. If BMI starts to screw over writers, that ship will sink with a quickness. Or as Keller says in his interview, “I’ve told [clients] who’ve already asked me about leaving BMI: If you want to leave, it’s easy to leave. These are one-to-two-year agreements, and ASCAP will be happy to have you.”
I will say this: I wish BMI was choosing to be a lot more transparent than they are. If 25 years in the music business has taught me any one thing, it’s probably this: leaders rarely hide the truth when it’s good. As the Christman piece notes, BMI has stopped sharing year-over-year total revenue and writer payout figures. This raises the very real concern that BMI may be banking on the belief that they can raise payouts for individual star writers, while taking a bigger slice of total revenue away from total payouts. Or perhaps they are looking to drive away the writers who take time to administer but bring in less money. You know who gets screwed in either scenario? The same writers and artists who ALWAYS get screwed when the screwings start to flow: the middle and lower classes.
The real question is, why can’t writers come together, get organized and create real leverage?
Part of the reason the industry is left to speculate and fear is that BMI is not directly answering questions. A few weeks back, several groups representing writers—the Black Music Action Coalition, the Music Artists Coalition, Songwriters of North America, the Artist Rights Alliance and SAG-AFTRA—asked pointed questions of BMI via letters to BMI President Mike O’Neill. These letters almost immediately leaked to the music business trades. Questions include: whether future profits might come at the expense of distributions to songwriters; whether songwriters, publishers or broadcasters would receive any proceeds from a potential BMI sale; an ask for assurances that [presumably less-profitable-for-BMI] writers will not be driven away from BMI; and and much more. You can see all 24 of the questions and the full letter here. O’Neill answered in only vague corporate speak, citing the need for evolution, investment and growth (although not explaining why any of that was prevented by being a non-profit), noting that BMI paid out a record amount in their last public report (all PROs were experiencing rapid growth during this same period) and re-iterating a non-specific commitment to songwriters.
But then, transparency has never really been the name of the game for BMI or PROs in general. At least two of the managers I spoke with brought up the fact that you cannot audit PROs. This is meaningful for several reasons. The obvious one is that monies are being accurately accounted and paid out. But also, some the contracts that will (or won’t) keep writers locked in to their BMI deals end with recoupment, according to one of the managers I spoke with. Writers are forced to trust that PROs are properly accounting these numbers. The Keller interview I linked to earlier notes that Milk & Honey “recovers a multi-seven-figure amount each year, just from auditing.” This is from auditing companies that know they can be audited at any time. Imagine what you might find if you cracked the books of a company that has never had to worry about anyone checking their math.
It’s worth a mention: until songwriters get serious about unionizing, and the industry gets serious about supporting songwriters, they will continue to get screwed—and not just potentially by BMI, but literally by anyone and everyone in the streaming music food chain. While working on this essay, news broke that the Writers Guild of America was close to winning critical concessions from Hollywood execs regarding AI, writer staffing and other key issues that will shape the future of their work in the coming years—many of the same issues that will shape, and possibly threaten, songwriters. Taken together, the effective Hollywood writer’s strike, and the potential sale of BMI should be a rallying moment for songwriters everywhere. As one highly accomplished, longtime writer manager shared, “BMI selling isn’t the biggest question you can be asking right now. The real question is, why can’t writers come together, get organized and create real leverage?”