Thursday, February 22, 2018
Business

Tampa Bay businesses are sued for playing copyrighted music without paying fees

On a Friday night in November 2014, the band at Tadpole's bar and restaurant in Brandon played hits such as Jimmy Buffett's Margaritaville, Hank Williams Jr.'s Blues Man and Brantley Gilbert's Dirt Road Anthem.

Not everyone in the audience was there to enjoy the music.

Among them was a "music researcher" hired by Broadcast Music Inc., or BMI, to document the performance.

Tadpole's hadn't paid licensing fees for those copyright-protected songs. A few months later, the owners landed in federal court for that night's performance. Unable to absorb a settlement of $30,000, Tadpole's closed last spring.

BMI is one of three major music-licensing companies that collect annual fees from restaurants and bars that play music, then pay songwriters and producers. Even if a song comes on a TV in the bar, the business needs a license to publicly broadcast it.

If it doesn't pay, the business may wind up like Tadpole's — hauled into federal court to faces allegations of copyright infringement.

In addition to Tadpole's, BMI has filed lawsuits against 25 other bars, restaurants and night clubs in the Tampa Bay area in the past five years, federal court records show. Eleven of the cases disclosed settlements totaling $342,000, ranging from $10,200 to $62,501. All the other cases resulted in settlements that weren't disclosed.

"We can say it's legalized extortion, but the copyright rules are pretty strict," said Tadpole's lawyer, Anthony J. Comparetto. He and other lawyers for bars and restaurants in these cases noted that mounting an effective defense is nearly impossible given the copyright law and BMI's deep pockets. The goal in these cases is to negotiate the lowest possible settlement.

"Because they are copyright songs, there are statutory damages and, in federal court, the attorneys fees can blow up quite easily," Comparetto said. "It's staggering the numbers that can come down on you."

"In theory, the band is just as liable for the copyright infringement," Comparetto said. "But the band's got no money."

He speculated that because licensing companies are meant to represent the artists, it would not look good if they started going after musicians.

Five other bay area restaurants that settled BMI lawsuits have since gone out of business, although the Tampa Bay Times could not confirm that the lawsuits caused them to shutter. In the past five years, there is no record that the other two major licensing companies, which go by the acronyms ASCAP (American Society of Composers, Authors and Publishers )and SESAC (Society of European Stage Authors and Composers), filed lawsuits against Tampa Bay restaurants or bars.

Tadpole's owner John Cook saw it as a ruthless process. "They don't care about the business. They go after you personally."

BMI vice president Dan Spears said that isn't the case.

"We're always very leery of taking legal action. We don't want to impact the business's ability to exist," he said.

Cook said he didn't realize that he had to pay the fees. As is typical for a bar and restaurant, he said Tadpole's received endless calls and letters from salespeople. The music-licensing notifications likely mixed up in the junk mail, and went unanswered.

When a BMI representative showed up at Tadpole's seeking payment during lunch, Cook ordered her to leave.

"I had some lady walk in and say I owed her $3,000 for a music license," he said. "I don't know where that check or money is going." (BMI says it didn't ask for $3,000 and that it's estimated annual licensing fee would have been closer to $1,600).

He didn't pay and kept playing the licensed music. From BMI alone, Cook ignored 19 letters, including "Cease and Desist Notices, one of which was personally delivered to Cook during BMI's visit to the Establishment," according to the lawsuit.

"It's a lot of money for an independent business owner," Cook said. He estimates that he and his business partner invested about $200,000 to open the restaurant. They did not budget for licensing fees.

Cook paid his portion of the settlement through loans and credit cards. Bit by bit, he is recovering from the settlement. He now owns CJ's Saloon in Riverview, where he is sure to pay for the music license.

"BMI is simply the go-between between the songwriters and the consumer of music. We're legally obligated to represent our songwriters and publishers," Spears said. "Our goal first and foremost is to educate."

Still, the price tag can be steep. Business owners pay licensing fees based on the fire department's occupancy rate of their establishment.

At Uncle Mike's Smokehouse in Plant City, the music typically comes from an iPod playlist. The annual cost to play that music along with a Live DJ and Karaoke, is about $6,000 total for the three licensing companies.

"Just because my capacity is 300 people doesn't mean I have 300 people in the building," said owner Simone Tolley.

She knows the penalty for being caught playing music without a license. After all, the bar where Uncle Mike's is today closed after BMI won $31,302 in a 2012 lawsuit.

"They are going to go after their man and get their money," Tolley said.

BMI was founded in 1939 by songwriters and radio broadcasters who needed a better system of collecting royalties for songwriters and producers.

The annual fees are based "on how prevalent and valuable that music is to the particular restaurant," Spears said. The cheapest category is playing recorded music. It costs more if a venue provides space for dancing or has a jukebox.

The New York-based company generated more than $1 billion in revenue last year and of that, paid $877 million to songwriters and producers. BMI's remaining dollars go to overhead costs, like paying music researchers to monitor performances at Tampa's Ybor City Jazz House and the Sloppy Pelican on St. Pete Beach.

Mom-and-pop restaurants are the most difficult segment, Spears said.

"BMI is a big part of their budgets," he said. "They're the group that is the most vocal … the ones that are the most difficult to reach."

He noted that BMI did not create the copyright laws and that without licensing companies, businesses would have to secure licenses for each artist whose music they play or risk being sued.

"They don't know what life would be like without BMI," he said.

This spring, BMI hosted local business owners at an event in Tampa, where representatives explained how the system works.

"I didn't realize that the fees were going toward songwriters, I thought it was for the government or something," said Carol Mears, owner of Cooters Restaurant and Bar on Clearwater Beach.

During the event, a Nashville songwriter explained that his income is dependent on these royalties and licensing fees.

One Tampa singer and songwriter, John Cena, has been in the industry for more than 30 years, but said he has never seen a dollar from a music-licensing company.

"Only the artists at the top level are the ones that receive the royalties," Cena said. "It's not a really fair system if you really think about it."

In part to save on fees, Bella's Italian Cafe in South Tampa opts out of live music and mutes the TVs around the bar, said general manager Eric Potts.

Carol Dover, president of the Florida Restaurant and Lodging Association, said the root of the conflict is misunderstanding and that restaurant owners are more willing to pay once they understand what is at stake.

"By not paying, we could chase all these songwriters off," she said.

Cena doesn't see it that way. He recalled a club owner who said that the fees made him less inclined to pay for live music.

"You can't blame BMI for doing what is their right to do, but these days nobody wants to pay for anything," he said. "We need a better system."

Times senior news researcher John Martin contributed to this report. Contact Alli Knothe at [email protected] Follow @KnotheA.

   
Comments
Administrator Haley Loeun fired from CareerSource jobs centers

Administrator Haley Loeun fired from CareerSource jobs centers

Haley Loeun, a top aide to the embattled leader of the Pinellas and Hillsborough jobs boards, was fired Thursday from her $130,000-a-year position as business services director.Loeun came under criticism after the Tampa Bay Times reported that employ...
Updated: 4 hours ago
Outback Steakhouse owner Bloomin’ Brands beats Wall Street forecasts

Outback Steakhouse owner Bloomin’ Brands beats Wall Street forecasts

TAMPA — Outback Steakhouse has been pressured to improve for awhile, but the restaurant chain isn’t cooked yet. In fact, a boost in Outback sales led its Tampa-based parent company to beat Wall Street expectations in its fourth quarter.Bloomin’ Brand...
Updated: 7 hours ago
Tampa Bay area’s population projected to grow to 3.1 million this year

Tampa Bay area’s population projected to grow to 3.1 million this year

TAMPA — The Tampa Bay area’s population, already the largest of any metropolitan area in the state, is projected to grow from 3 million last year to 3.1 million this year, and to 3.3 million over the next five years.That growth is expected to bring c...
Updated: 12 hours ago
Work finally starts on downtown St. Petersburg’s newest hotel

Work finally starts on downtown St. Petersburg’s newest hotel

ST. PETERSBURG — Nearly a decade after it was first proposed, a new boutique hotel in downtown St. Petersburg is finally under construction.Workers are preparing the foundation of the Galaxy, an 11-story, 92-room hotel at Third Avenue N and First Str...
Published: 02/22/18
Note to readers: About those annoying popups on your phones

Note to readers: About those annoying popups on your phones

Dear readers, I hope that you are able to see this and that a popup saying you’ve won a gift card hasn’t taken over your phone. We have heard from many of you that these popups are preventing you from reading our news coverage.We hate them as much as...
Published: 02/22/18
Saving trees a passion for some St. Petersburg neighborhood leaders

Saving trees a passion for some St. Petersburg neighborhood leaders

ST. PETERSBURGBeth Connor, a longtime neighborhood environmental advocate, is alarmed at what she views as the destruction of the city’s trees in the name of development.She points to at least three properties that have been scraped of trees in recen...
Published: 02/22/18
This week food fests celebrate collard greens and Jewish foods

This week food fests celebrate collard greens and Jewish foods

FIELD OF GREEN: COLLARD FESTOn Saturday you can devote your whole day to the beauty of collard greens. Well, that’s the jumping off point. Collards are the "central ingredient" at the Tampa Bay Collard Green Festival at St. Petersburg’s Historic Deuc...
Published: 02/21/18
Updated: 02/22/18
CareerSource jobs chief Edward Peachey could soon be out of work

CareerSource jobs chief Edward Peachey could soon be out of work

CLEARWATER — The heads of the Pinellas and Hillsborough jobs boards will hold emergency meetings in the coming days to consider firing president and CEO Edward Peachey. Jack Geller, board chairman of CareerSource Pinellas, and Dick Peck, chair...
Published: 02/21/18
Updated: 02/22/18
Hillsborough commissioners ask CareerSource chief to step down or be fired

Hillsborough commissioners ask CareerSource chief to step down or be fired

TAMPA –– Hillsborough County commissioners voted Wednesday to ask embattled jobs center leader Ed Peachey to either resign or face termination over concerns the agency inflated job placement numbers with the state. Chairwoman Sandy Murman said commis...
Published: 02/21/18
St. Pete's World Liquors sign will live on at new home

St. Pete's World Liquors sign will live on at new home

A local landmark for a half century isn't coming down for good.
Published: 02/21/18