BMI, which was acquired by New Mountain Capital in February, last night informed songwriters and publishers that its previous owners, mainly radio and television stations, had kept their promise to pay out a $100 million bonus of the undisclosed amount they received for the sale — which sources said was more than $1 billion — to songwriters and publishers. In addition, it was revealed to each songwriter and publisher how much they will receive.
Songwriters and publishers expressed their gratitude for the payment—after all, the sellers were under no legal obligation to share any of the sale price with BMI members. In fact, some consider it a very generous reward from the previous owners. However, other sources have suggested that ethically, the previous owners should share something, since it was the rights of the songwriters and music publishers that generated all the licensing revenue and created the value for the sale price to be achieved.
In each case, publishers and songwriters were contacted by Advertising sign On Thursday (March 28) he said they were engaged in mathematical analysis to try to understand what their payment represented, although BMI presented on its website some details of how it arrived at each individual payment. According to the site, BMI looked at the most recent five years of payments (2019-2023) and used them as a basis to determine how much each payment should be — after taking into account whether the songwriter's catalog was there for all five years or is it still there even if the songwriter is gone. It then apparently divided songwriters into tiers based on undisclosed parameters and paid each songwriter or publisher in that tier the same amount according to the site. Only songwriters or publishers who had received over $500 in royalties were eligible for bonus distribution.
BMI did not provide any information on how it calculated the splits other than that it split the bonus payments evenly between songwriters and publishers — and that bonuses from catalogs sold would be prorated between new owners and old owners. However, he disclosed that the method he used “is different from how we calculate our quarterly distributions,” according to the letter signed by BMI's president/CEO Mike O'Neill which accompanied the news of the allotment. “We thought very carefully about how we determined this allocation and made every effort to be as inclusive as possible and to apply it to the largest number of BMI-earning affiliates,” O'Neill's letter said. “Your allotment is truly deserved and I am delighted to deliver it to you on behalf of former BMI shareholders. Moving forward, your future with BMI is brighter than ever.”
Meanwhile, the publishers' data teams spent the day analyzing the payouts, looking at cases where they could see payouts across multiple catalogs or songwriters with similar characteristics over the five years, in order to compare them. Others measured the bonus payment as a percentage of the $100 million or compared it to the suspect sale price.
Still others decided that the best way to measure the bonus was to add up all the royalties paid by BMI for a catalog of songs over the five years to see what percentage of that amount included the bonus. and then compare that percentage to other songwriters or catalogs. One such listing, an A-level writer/producer with several No. 1 hits during the period, earned about $4.1 million from BMI over those five years and received a bonus of $47,000 — or a bonus of 1 .15% on earnings for the period, according to a source with access to the data.
Another publication source says that comparing songwriters in its catalogs who are as successful as what each received as a bonus created quite a bit of confusion. In one case, when they compared two songwriters at the same level, they both got the same amount, even though one was at BMI for all five years, while the other was only there for some of the five years. “The BMI may label it as 'no good deed goes unpunished' or 'finding a gift horse in the mouth', but so far I can't see any rhyme or reason to the way they determine the payouts,” he says the publisher. he quickly adds, “Having said that, I'm very glad I got the money.”
A spokesman for BMI was not available for comment by deadline — the organization held its Trailblazers of Gospel Music Awards event in Atlanta on Thursday. But O'Neill's letter to those receiving bonus payments also noted that the new owners will provide increased BMI capabilities and leave the organization “best positioned to take advantage of many growth opportunities that will ensure your long-term success…increasing your distributions, upgrading the services we provide and exploring new revenue streams that will benefit you.”
