#043: Are You a BMI Songwriter? Proceed with Caution (Revisited)
“Some people are so poor, that all they have is money” — Bob Marley
UPDATE: Well… It happened. I wrote the below article on July 27th, 2023 about the worries and concerns that I had with the rumored sale of BMI to a private equity firm. On Tuesday November 21st, BMI was sold to wall street firm New Mountain Capital. Their name even reeks of douchebaggery with even the concept of building a ‘new mountain’ or the image of a mountain of money. I’m glad that ASCAP and SESAC exist as competitor PRO’s in the U.S., since that should prevent any immediate predatory moves from BMI and it gives songwriters/publishers a place to move their catalogs, if needed. I also believe in the people who works at BMI. These are good people who love music and support songwriters/producers/publishers in real ways. I simply wonder how much that will matter over time as the wall street greed starts to slowly take it’s grip and the ownership/board of directors are potentially able to suck more profits from BMI than what they state today. Now it’s official… if you’re with BMI, proceed with caution.
Performance rights organizations (aka PRO’s) are responsible for paying out royalties to songwriters and publishers when a song is performed publicly in a live venue, on the radio, on a streaming platform or on TV/film. In the U.S., the biggest two PRO’s are ASCAP (the American Society of Composers, Authors and Publishers) and BMI (Broadcast Music, Inc). The two control over 90% of the U.S. market. Both of these entities, up until 2022, have operated under a not-for-profit set-up. This means that they have a fixed administrative cost to cover their operating expenses (staff, offices, events etc) and then the rest of the revenue passes through to the songwriters and publishers. All things considered, up until 2022, there was little difference between the two and who a songwriter or publisher chose to become a member with typically came down to relationships and preference.
Then in October 2022, BMI made the decision to become a for profit company, while still operating their core responsibilities as a PRO. This was the first time that BMI had ever been a for profit company since their inception in 1939. According to Music Business Worldwide, BMI President & CEO Mike O’Neill at that time stated that this decision, “will open up new and important opportunities for us to invest in our business” and that “simply put, growth for BMI means growth for our affiliates. And most importantly, our goal is to continue to increase our royalty distributions at an even greater rate than we have before”. I don’t inherently have major issue with the decision for BMI to become a for profit company. The technology, or lack thereof, of the ASCAP and BMI registration portals feel like they haven’t changed one bit since the 1990’s. ASCAP hosts way more events, including their annual ASCAP Expo in Los Angeles. So for BMI to want to consider having shareholders and have the ability to raise capital in order to reinvest in better technology and offerings to bring in more creative talent? It makes sense to me. However, news from this week has me less optimistic for the potential path ahead.
According to Reuters on July 25th, 2023, BMI is “exploring options including a sale”, with an expected price somewhere in-between $1.5-3 billion. This news has me concerned for the future of the PRO and how they operate. Going for profit is one thing to grow and build a better BMI. But if there is a sale ahead, the buying party is going to be significantly important. I don’t care what fluffy language is stated in a press release, if a financial or wall street company takes over BMI, profit and greed are going to eventually dig their tentacles into the financial structure. This is no shade on the amazing people who work and operate BMI. Most of them are the biggest champions for songwriters and creatives that I’ve ever met and I call many of them friends. This would be a problem that would be above them at the investor/ownership level and could have impact and ramifications throughout the company.
So if you’re a BMI songwriter or publisher, what do I suggest that you do right now? Nothing at this time. BMI is still paying out at a rate higher than ASCAP (slightly), they seem to be operating in the same way as they have in the past and no sale has taken place. However, I do suggest that you be weary and watch the news closely (get those Google Alerts set) in order to be sure that you’re putting your music, career and future earnings in as good of a place as possible.
