The great rebates debate

The controversial practice of European collection societies giving rebates to promoters is piquing interest among a growing number of artist managers and agents, with many now exploring the possibilities for self-administering performance royalties, rather than relying on the local societies.

The issue was highlighted as far back as five years ago when tour accountants flagged up to UK society, PRS For Music, that the figures it was receiving from sister societies in Europe for performance royalties did not match the sums that were actually being paid to certain collection societies at the end of concerts. However, Irish rockers U2 have famously been concerned about performance royalties since the 1990s and even attempted to set-up their own collection society.

Research by the UK-based Music Managers’ Forum revealed that Dutch society BUMA regularly gives promoters 25% rebates on their performance fee payments – money that is meant for songwriters, composers and music publishers

Research by the UK-based Music Managers’ Forum revealed that Dutch society BUMA regularly gives promoters 25% rebates on their performance fee payments – money that is meant for songwriters, composers and music publishers. The society justifies these rebates by claiming that the promoters were helping BUMA to administer the process and therefore were entitled to compensation.

Further investigation, however, has disclosed that such practices are commonplace throughout Europe, meaning that many promoters are being refunded fees earmarked as revenue for songwriters and composers. But the rebate schemes also mean that performing artists and agents are losing out on funds, because the show settlements that tour accountants are signing off on, do not reflect the true position of the finances for everyone involved.

Read the rest of this feature in issue 64 of IQ Magazine. To subscribe, click here.