Friday, September 21, 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.

   
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