When Music is Played at Your Event, Who Pays the Piper?

Published September 11, 2007

Think of the last time you attended a sporting event in an arena, gym or stadium – chances are you heard music played for the warm-up, during the intermission or between periods, and thought nothing of the legal ramifications of that. However, one national sport organization was recently asked by SOCAN, the Society of Composers, Authors and Music Publishers of Canada, to pay a tariff for playing music at its event.

SOCAN is the Canadian copyright collective that administers the performance rights of composer, author and publisher members by licensing the use of their music in Canada. They collect license fees for the communication and public performance of copyright-protected music, and distribute royalties back to the members of the collective. Without SOCAN, every music user would have to get permission from every composer, songwriter, lyricist and music publisher for every musical work they wished to use, which would create an administrative nightmare. SOCAN exists as a single entity to oversee the collection and distribution of royalties.

SOCAN fees apply to three categories of activities relevant to sport – including sport events, physical exercise classes, and community recreational activities:

Tariff No. 9 applies specifically to sporting events, and the fee payable is the lesser of: 0.05 percent of the gross receipts from ticket sales, or twice the amount that would have been payable in the year 2000. In the case of an amateur sports event, this amount ranges from 50 cents per ticket (where the ticket costs less than $10) to 90 cents per ticket (where the ticket costs $40 or more). Payments are higher for professional sports events. The fee payable for an event for which there is no charge of admission is a flat rate of $5.00.

Tariff No. 19 applies to playing music during physical exercise classes or activities. A license to perform music for dancercise, aerobics, bodybuilding shows and dance instruction is based on a dollar amount times the average number of participants per week using the facility or room for the purpose of physical exercise. The minimum license fee is $64.

Tariff No. 21 applies to events at recreational facilities or community halls, such as receptions, fairs, fitness activities, minor hockey and other sporting events. This fee is a convenient single annual amount (approximately $185) if the facility’s gross revenues generated from events does not exceed an annual threshold of approximately $15,000. Should gross revenues exceed this threshold, then licenses must be obtained for the performance of music at each event.

At first glance, these numbers would not seem to be high. However, a quick calculation suggests that over time, these costs could become significant. Every high school, in theory, should be paying $5 for every basketball or volleyball game hosted in its gym, which will add up considerably over a year. And this does not take into account the administrative inconvenience of paying a license each time. A single event grossing $50,000 in gate receipts should be paying $25. A university or college season in basketball or hockey could end up costing several hundreds of dollars in licenses.

A further complication is that SOCAN does not specify whether the event organizer or facility operator is to pay the tariff, and will pursue both if the tariff is unpaid. Therefore, it is good practice to determine beforehand, as part of a facility rental agreement, who is responsible for obtaining the SOCAN license.

Copyright infringement is a serious offence. SOCAN has a legitimate objective in pursuing royalties for its artist, composer and publisher members, and it would appear that SOCAN is seeking to more forcefully pursue this objective in the increasingly commercialized world of amateur sport. We have been approached by one large event organizer already who was asked, after their event, to pay up – and it is likely that SOCAN will be pursuing more sport organizations and sport events for recovery of royalties in the future. Event organizers take note!

Originally published: Centre for Sport and Law Newsletter (2007) Vol. 3(3)