The observer wasn't there to critique the band's proficiency or taste in covers.
He was an undercover agent for the performance-rights organization known as ASCAP, the American Society of Composers, Authors and Publishers.
For months JackSons' co-owners Andrew and David Dalton had argued with ASCAP over licensing fees that would bring the bar in line with laws that provide for the payment of royalties to the approximately 300,000 songwriters the agency represents. Now ASCAP was determined to end the bickering once and for all. Armed with evidence obtained during the clandestine October visit, the organization filed suit January 18 charging that in airing the Mellencamp and Bon Jovi ballads on the premises that day the Dalton brothers violated federal copyright laws — to the tune of up to $30,000 in damages per song.
After another bout of legal wrangling, the sides settled out of court earlier this month. The Daltons did not return phone calls seeking comment for this article, but ASCAP attorney Doug Copeland says the settlement favored his client. In more than twenty years representing ASCAP in dozens of Missouri lawsuits alleging copyright infringement, Copeland says, he has yet to lose a single case.
"They're almost impossible to lose," says the 52-year-old Clayton lawyer, who admits he rarely sets foot in the bars and clubs targeted in his litigation. "We have a witness who can say that on such-and-such a date they were there to witness the establishment playing the song. The bar or restaurant won't have any evidence to dispute that claim. Ninety-nine percent of these cases settle or are disposed of in summary judgment."
Performance-rights organizations such as ASCAP and its main competitor, Broadcast Music Inc. (BMI), serve as licensing clearinghouses that enforce copyright laws on behalf of their clients. Unlike recording artists, who earn royalties in the United States primarily through album sales, songwriters, lyricists and music publishers are allowed to collect fees for the public use of their songs, whether broadcast on the radio or played live or through sound systems and jukeboxes in restaurants and bars.
And while the recording industry has been hard hit financially in recent years owing to declining album sales, revenue for performance-rights organizations is at an all-time high. Last year New York-based ASCAP saw revenue increase 10 percent, to $863 million. Revenue at BMI headquarters in Nashville jumped 7 percent in 2007, to $839 million.
"Nearly 90 percent of the money we collect goes right back to the songwriter," asserts Vincent Candilora, senior vice president of licensing for ASCAP. "The songwriter is in essence the smallest of small businesses. They're not making much at all on album sales, and the public performance of their music is really the only way they make any money."
Try telling that to the business owners who've locked horns with ASCAP and BMI.
Locally, JackSons' is only the most recent establishment to have found itself at the other end of a lawsuit. Other notable venues that have fought copyright suits include the Venice Café in Benton Park, Rue 13 on Washington Avenue, Brandt's in the Delmar Loop and The Blue Note in Columbia.
"When I turned the lawsuit over to my attorney, his response was: 'Holy God. This thing is wrapped so tight you don't have a prayer,'" recalls Blue Note owner Richard King. "Now, I don't have a problem paying the artists, but I think the system is flawed. As a club owner, I stick my neck out for a lot of bands — and lose money on a lot of them — and then on top of it I'm also paying BMI and ASCAP? Someone needs to sit down and review the system."
Other business owners, many of whom asked that their names not be published, have even harsher words for the current setup.
"It's legalized extortion," complains a downtown St. Louis bar owner, who continues to ignore letters and phone calls he receives from BMI, ASCAP and newcomer SESAC (the Society of European Stage Authors and Composers).
Others say they've paid one of the agencies and don't want the other two to come calling. "They're like fleas," a midtown club owner scoffs. "You get rid of one and more show up."
Fees vary, depending on the size of the venue and the type of music. ASCAP's rate schedule, for example, lists prices from as little as $226 a year for the smallest venues to more than $8,000 for larger clubs. Jerry Bailey, director of communications for BMI, says the typical bar and restaurant that doesn't host live performances pays his organization about $600 annually.
"I realize if you're a local bar owner that might seem like a lot of money," says Bailey. "But in the broad scheme of things, it's just a drop in the bucket. It's pennies per song."
Delmar Loop impresario Joe Edwards, whose business interests include restaurant/bar Blueberry Hill and the Pageant concert hall, pays more performance-rights fees than perhaps any bar owner in town. He has never contested the fees but acknowledges that for some club owners the blow to the wallet can come as a rude surprise.
"It's probably fair that we pay something," Edwards allows. "This is how songwriters make their living, and their music enhances the experience of our customers. The shock comes to new bar owners who are unaware they have to pay the fees."
ASCAP's Vincent Candilora says his agency takes pains to contact owners by mail, phone and in person to educate them about their financial obligations. Lawsuits, Candilora emphasizes, are a last resort.
Many bar owners, however, complain that they're not sure what they get in return for their fees. One owner who was sued by SESAC a few years back says he still doesn't know what songwriters belong to that organization. "I asked them to provide me a catalog of their music so I could see if I was in violation," says the barman. "They refused. That's the way it works: You get no customer service for your payments. I'm paying them a couple hundred bucks a year for what? They could at least send a Christmas card or something."
Another owner admits he routinely throws away the handful of letters he regularly receives from BMI and ASCAP. "If I knew that the fees went to the songwriters whose music we play, I wouldn't have a problem paying," says the proprietor. "But I don't want my money going to pay Top 40 songwriters whose music we rarely — if ever — play."
BMI's Jerry Bailey says his organization divvies its payments to songwriters through an algorithm that incorporates music played on college and public radio stations in addition to mainstream outlets. The formula also accounts for songs played in the top-grossing concert tours of the year. "It's common for club owners to think that if they're not playing commercial music that the songs are not copyrighted or off our radar," says Bailey. "But that's not true. Most songwriters, if they have any dreams of ever making money, will register with a performance-rights organization."
As long as current copyright laws remain in effect, ASCAP attorney Doug Copeland concedes, there'll be a few club and restaurant owners who protest the fees. And — just as he has done for the past two decades — Copeland will, if pushed, file his lawsuits.
"We're not trying to put anyone out of business," he says. "That wouldn't be in our interest. But if the bar on one side of the street is following the law and the bar on the other side is not, we're eventually going to sue. We have to be fair."