Radio One, Rape and H.R. 848

By MXL on 8/02/2009 05:02:00 AM

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Cathy Hughes, RadioOne Founder and CEO

And the war rages on.

Musician Dionne Warwick has fired the latest salvo in the battle over artists' royalties being waged between big, corporate radio and the Congressional Black Caucus. She said in her Huffington Post blog:

Every time we buy a CD or download a song, the artist is paid for their work. You might not know that this isn't the case when a musician's work is played on the radio. That's because corporate radio CEOs like Cathy Hughes are exploiting a legal loophole that allows them to play these artists' songs without paying them for their work.

Ms. Hughes is now very angry with me, other black recording artists, and civil rights leaders because we support the Performance Rights Act, which many now call the Civil Rights for Musicians Act. This bill, which was written by the Dean of the Congressional Black Caucus, Congressman John Conyers, closes the legal loophole the radio corporations and CEOs are using to ensure that African American artists receive fair pay for airplay...

Cathy Hughes, founder and CEO of Radio One and arguably the most powerful Black person in radio, is the biggest opponent of H.R. 848, which, as Warwick mentioned, would effectively end the exemption from copyright laws that radio stations have enjoyed and profited from for decades and force them to pay additional royalties to artists who perform the songs played on their air.

Pay somebody other than herself or her sons?? Cathy Hughes doesn't know what the fuck that even means.

(More after the stretch...)


Currently, the law only requires stations to pay copyright royalties to the artists who compose hit records, not those who perform them, pretty much keeping performers from enjoying the profits their work helped generate.

According to a resolution released by the NAACP - who fully and officially support H.R. 848:

Every modern country requires radio stations to compensate musicians, and copyright law requires that artists be compensated in every other circumstance when their music is played on satellite radio, downloaded from iTunes or even played at a local bar. H.R. 848 is about ending the exploitation of African-American musicians and paying them a fair wage for their work ... H.R. 848 is the only source of income for many older performers. They didn’t write the songs, but they brought them to life. Without the performers, these songs would be nothing but words on a page. And for many of them, radio performances are their only source of potential income...

Hughes (whose company owns 54 radio stations across the country) and other station owners argue that being forced to pay additional royalties would bankrupt them.

“Most of the people who don’t support this bill have a financial interest in radio. When people hear the whole story, they support the bill," says Sean Glover, a spokesman for Music First, a coalition of companies that has partnered to pass Conyers’s bill. "So far the public has heard only one side of the story because Cathy Hughes and Radio One control the airwaves. They won’t let us advertise on their radio stations."

Instead, Hughes has used her stations to go on the offensive in recent weeks, releasing a series of ads slamming several Black lawmakers associated with or supporting the bill, including Conyers (D-Mich) and Reps. Sheila Jackson Lee (D-Texas), Mel Watt (D-N.C.), Hank Johnson (D-Ga.) and Robert “Bobby” Scott (D-Va.). An obvious attempt to negatively effect their re-election attempts, Hughes' ads are mostly calculated smears that attack the lawmakers' ethics and knowledge and generally have little or no relevant factual basis.

She was given the opportunity to state her case in the proper manner, but, for some strange reason, declined Conyers' invitation to participate in the House Judiciary Committee Hearings on H.R. 848. I guess she couldn't face the music.

Basically, Hughes is pissed and seems to be having a bit of a tantrum. Despite the speculation Warwick shared in her blog, Radio One has been LOSING - big time - in the last fiscal year or so. According to a May 2009 article in the Washington Post:

Radio One posted a net loss of $387 million after its sales fell even faster than those of the industry generally and it was forced to write down more than $400 million in the value of its radio licenses. Several of its top executives quit or were forced out, its credit rating was cut, and it was forced to sell off several stations to raise cash. Because of accounting errors, the company restated several years of earnings and has been caught up in the Securities and Exchange Commission inquiry into backdating of stock options. Yesterday, after announcing another quarterly loss of $18.3 million, Radio One's stock price closed at 86 cents.

The Post goes on to say that Radio One's management team and board of directors "overreached in their strategy, underperformed in executing it and sometimes put their own interests ahead of those of their public shareholders," citing the large bonuses Hughes awarded herself and her son, Radio One President Alfred C. Liggins, III, as proof positive. "...In a conference call with analysts, it was comical listening to the company's new chief financial officer, Peter Thompson, as he struggled to rationalize the pay packages, resorting to every piece of jargon and twisted logic in the executive compensation consultant's handbook," the Post chides.

Here are a few of the highlights of the Hughes/Liggins compensation and bonus packages, according to the Post:

-Liggins, who in addition to his base salary of $575,370, last year earned a bonus of $468,720 for turning in the worst financial performance in company history.

-To compensate Liggins for working for the past three years at a salary the board now thinks was inadequate, directors awarded Liggins $1 million for signing the new contract.

-Liggins will also receive 8 percent of any Radio One profit from its investment in TV One

-Should Radio One be sold and the services of Hughes and Liggins no longer required, the agreements call for each to receive a cash payment equal to three times annual salary and three times the average bonus from the previous three years.

-To compensate him for the decline in the value of Radio One stock that he purchased under his old contract, the board awarded him a one-time, makeup payment of $4.8 million.

-Investors ... are likely to find it galling that, having seen the value of their stock fall by 95 percent and the value of the company fall from $2 billion to $85 million, they now have to shell out $4.8 million to compensate Liggins for the decline in his shares.

-Hughes and Liggins control 88.3 percent of the votes at the annual meeting

Basically, it seems that Hughes - who apparently has no clearly defined executive responsibiities at Radio One - is legally raping her shareholders in the name of profit for her and her son.

That's nepotism like a muthafucka.

As much as I respect Hughes for building such a powerful and influential empire, I can do nothing but shake my head at her company's gargantuan fuck-ups and her own gargutuan egoism.

And now it seems Hughes wants to continue keeping artists from receiving the royalties they deserve for songs they helped make popular -- even though damn-near every other country on Earth pays artists for their work played on terrestrial radio.

Fortunately for the artists, it seems like she's going to lose this fight.

What it all seems to boil down to is greed. Hughes and her son have already ensured that they'll be ballin' for quite some time (regardless of Radio One's fate), they just don't wanna give up one red scent to no stinkin' singers, regardless of how much they deserve it.

And that's fucked up.


-Read Hughes' interview with Essence Magazine -- where she states her eyeroll-worthy reasons for opposing H.R. 848 -- here.

-For a more in-depth breakdown of Radio One's shady dealings, check out The Reid Report. Miss Reid goes ALL THE WAY IN.

Suppliers: The Hill, HuffPo, EUR Web & The Washington Post

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