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PRS licence fee 'pass on' - guidance note for members

PRS for Music licence fees (PRSfM) – traditionally paid by promoters and venue owners – are increasingly being passed onto musicians, either as a cost involved in hiring a venue or as a deduction from their performance fee.

The increase of this practice is due in some part to the fact that it is now commonplace for artists to hire venues and promote their own shows and also to co-promote shows in conjunction with venues.

However, as the PRSfM licence fee represents a vital royalty for music writers - who in addition are often the performers - the transferral of this fee is causing concern amongst artists. As there are many variables involved in the booking process, it’s hard to categorically say when this practice is or isn’t acceptable, but there are some basic guidelines with regards to the different terms of engagement:

Artists engaged to perform
When an artist is engaged to perform for a guaranteed fee by a promoter or venue manager, the artist should not be expected to pay part, or all, of the PRSfM licence fee in relation to their performance. The venue/promoter should take the PRSfM fee into consideration along with the other venue and show costs, plus negotiate the fee on the basis that the artist will not be contributing to the payment of the fee. As far as the artist is concerned, the PRSfM licence fee is handled behind the scenes and will not form a part of their performance agreement.

Artists hiring venues
When an artist is hiring a venue and promoting a show, it is reasonable that they might be expected to pay the PRSfM licence fee.  However, this fee should be the actual amount that the venue will be required to pay to the PRSfM and it may be either a fixed amount, for example if part of the Gigs, Clubs & Small Venues tariff (approx. £10), or it may be proportionate to the box office revenue if the venue is on the LP Tariff. The LP Tariff is chargeable at a rate of 3% of box office sales and a minimum payment of £37 is due at all shows.  Some venues charge a fixed fee for hire-outs (which may include such costs as a sound engineer, security and PRSfM licence fee etc), whereas other venues will list costs separately and the final cost may therefore vary accordingly. In this situation it’s important to know if the PRSfM licence fee is fixed or if the LP Tariff applies, in which case the amount payable could potentially increase in line with the box office revenue. All costs relating to the venue hire should be outlined when an artist and venue agree to the booking. 

Percentage deals and splits
In the event that an artist agrees to a percentage deal with a promoter/venue, the situation surrounding the PRSfM licence fee becomes more complex. A deal may involve a small guarantee plus a percentage of box office revenue, or it may be a guaranteed fee versus a percentage of box office revenue (whichever is greater). When an artist’s fee is linked to the level of box office revenue, it is sometimes the case that the venue will try to deduct the PRSfM licence fee before the artist’s share is calculated. Ideally in this scenario the venue should work out their costs (including the PRSfM licence fee) before they negotiate the percentage split with the artist and in such a way that the licence fee is not outlined or mentioned as a cost or deduction that the artist has to jointly bear. This method allows the artist to receive their percentage of the box office revenue without allowing for the deduction of a PRSfM licence fee and means that it will not form part of their agreement with the venue/promoter.

Dave Webster and Kelly Wood
MU Live Performance Dept

Published: 12/06/2015

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