# How Performance Rights Organizations Get Paid: A 1941 Antitrust Settlement and a Per-Song Hammer

Play music in your bar, gym, or store and you owe ASCAP and BMI. You can't refuse because of a 1941 consent decree, and the 'or else' is $750 to $150,000 per song.

Author: J.A. Watte
Published: July 20, 2026
Source: https://jwatte.com/blog/how-performance-rights-organizations-are-paid/

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*Thirty-sixth in a series on jobs whose pay system is stranger than the salary. This batch is about the toll collectors nobody names, the ones who take a slice of a flow you never see them standing in. You have already met the [card networks](/blog/how-card-networks-are-paid/) that skim every swipe and the [pharmacy benefit managers](/blog/how-pharmacy-benefit-managers-are-paid/) who sit invisibly between your prescription and its price. Performance rights organizations belong right beside them. Play a song in a public place and you owe money to a company most business owners cannot name, and the reason you cannot refuse to pay is a Depression-era antitrust settlement bolted to a copyright statute that measures the penalty per song. Every figure below is cited to the U.S. Code, a U.S. Copyright Office study, or the organizations' own published materials, and where a number could not be verified at a primary source I say so rather than estimating.*

Turn on music in your bar, your gym, your clothing store, or your restaurant, and you have just triggered a payment to an organization you have probably never heard of and certainly never chose.

There are two of them that matter, ASCAP and BMI, plus two smaller ones, SESAC and Global Music Rights. They are called performance rights organizations, PROs for short. They do not make music. They do not sell you a stereo. What they sell is permission, the legal right to play songs in public, and they collect that fee from roughly every commercial space in America where a speaker is turned on.

Here is the strange part. You cannot easily talk them down, and you cannot make them go away by promising to only play music they do not control. This is the purest kind of toll booth in the whole series, because the road it sits on was drawn by a court in 1941, and the thing waiting for you if you drive around it is written into the Copyright Act at a price of up to $150,000 per song.

## The taxable event: turning on the speaker

Start with what actually triggers the toll, because it is broader than almost any owner assumes.

The federal copyright in a song includes an exclusive right to perform that song publicly. ASCAP, describing its own reach, defines a public performance as one that occurs "either in a public place where people gather (other than a small circle of a family or social acquaintances)" or one that "is transmitted to the public, for example, radio or TV broadcasts, and via the Internet." Read plainly, that means nearly any use of music outside your own living room is a public performance in the legal sense. The jukebox in the corner tavern, the playlist over the gym speakers, the hold music on a business phone line, the radio playing in a retail store, all of it counts.

ASCAP alone lists licensed categories that include airlines, amusement parks, bars, restaurants and nightclubs, colleges, fitness clubs, hotels, and retail stores, and it says it maintains "over 100 different ASCAP rate schedules" to price them. BMI, its counterpart, offers "more than 60 different music licenses." These are the organizations' own self-reported figures, and I flag them as such, but the structure they describe is the point. The moment you play music where the public can hear it, you have done the thing the copyright fences off, and someone is entitled to charge you for it.

That is the taxable event. Now look at who collects, and why you cannot refuse them.

## The blanket license: one fee for a repertory you cannot audit

You could, in theory, contact the owner of every song you want to play and negotiate a price. Nobody does this, because it is impossible at any realistic scale, and the PROs exist precisely to make that impossibility their business.

What they sell instead is a blanket license. You pay one annual fee and you may play anything in that organization's catalog as much as you want. ASCAP describes its blanket license as giving "legal permission to entertain your customers" with "our musical repertory of more than 20 million songs and scores," representing "the more than 1.1 million members we represent," and it makes the pitch explicit: "with one license fee, ASCAP saves you the time, expense and burden of contacting thousands of copyright owners." BMI offers the parallel deal at a similar scale, saying it "represents more than 1.5 million songwriters, composers, and publishers with over 25 million musical works." Both figures are the organizations' own claims.

The blanket license solves a real problem. But it also creates the toll booth, because of a catch buried in the numbers. You cannot know, in advance and in practice, which songs belong to which organization. A song's writer might be an ASCAP member while a co-writer is with BMI. Catalogs shift as writers move. And so a business that plays a wide range of music cannot safely license only one PRO, because it cannot guarantee it will never play a note controlled by the other.

The Copyright Office made the scale of this plain. ASCAP and BMI, it found, "together represent more than 90% of the songs available for licensing in the United States." When two organizations control more than 90 percent of the licensable songs between them, and you cannot audit in real time which song is whose, the realistic answer for a bar or a restaurant is to license both. You pay two tolls to play one playlist, and you pay them for the same reason a driver pays a bridge toll, because there is no practical road around.

## The "or else" is the Copyright Act, measured per song

A toll booth is only a toll booth if the alternative to paying is worse. This is where the PRO system gets its teeth, and the teeth are not the PROs' own. They belong to the Copyright Act.

If you play copyrighted music without a license, you are infringing, and the statute does not require the copyright owner to prove what your infringement actually cost them. It lets a court award damages by the piece. Under 17 U.S.C. section 504(c)(1), a court may award statutory damages of "not less than $750 or more than $30,000" per work infringed, "as the court considers just." That is the baseline range, per song, whether or not anyone can show a nickel of real harm.

Then it gets worse in one direction and gentler in the other. If the infringement was willful, meaning you knew or should have known, section 504(c)(2) says "the court in its discretion may increase the award of statutory damages to a sum of not more than $150,000" per work. And if the infringer genuinely did not know and had no reason to know it was infringing, the same subsection lets the court reduce the award "to a sum of not less than $200" per work. But note who has to prove the innocence: the infringer does. The default assumption runs against the business owner.

Now do the arithmetic that a PRO's licensing representative is implicitly doing when they call. A small tavern plays, say, forty songs on a given night without a license. At the low statutory floor of $750 each, that is $30,000 of exposure. If a court finds the owner was warned and kept playing anyway, that is willful, and the ceiling per song jumps to $150,000. The blanket license, whatever it costs, is smaller than that number. That gap is the toll. The PRO does not have to threaten you with the $150,000 figure. The statute does the threatening, and the license is simply the cheaper door.

This is the mechanism that makes the corner bar with a jukebox face the same statutory hammer as an outright pirate. The law measures the penalty per work infringed, and it does not care whether you are a criminal or just a restaurant owner who did not know the rules.

## The 1941 settlement: why you cannot be refused, and why they cannot refuse you

So the PROs hold a catalog you cannot avoid and a statute that makes non-payment ruinous. What stops them from simply naming any price they like? A pair of federal antitrust decrees older than most of the songs.

The Copyright Office lays out the history: "Since 1941, ASCAP and BMI's licensing practices have been subject to antitrust consent decrees overseen by the Antitrust Division of the DOJ and enforced by federal district courts in New York City." The government first went after ASCAP in 1934 and again in 1941, and the 1941 suit "was settled with the imposition of a consent decree in 1941." That decree "has been modified twice, first in 1950 and most recently in 2001." BMI got its own decree the same year; "the 1941 BMI consent decree was superseded by a new decree in 1966, which was last amended in 1994."

The reason the government stepped in is the reason you should care. ASCAP and BMI are, functionally, sellers acting together on behalf of enormous pools of competing songwriters, which is the kind of arrangement antitrust law usually forbids. The decrees are the deal that lets them exist. In exchange for being allowed to pool and sell rights collectively, the PROs accept a set of leashes.

The core leashes, in the Copyright Office's summary, are these. The PROs "may only acquire nonexclusive rights to license members' public performance rights," which means a songwriter can still license their own songs directly. They "must grant a license to any user that applies, on terms that do not discriminate against similarly situated licensees." And they "must accept any songwriter or music publisher that applies to be a member, as long as the writer or publisher meets certain minimum standards."

Sit with the middle rule, because it is the structural heart of this toll booth. The PRO cannot refuse to license you. If you run a bar and you ask for a license, they must give you one, on terms no worse than the bar down the street gets. That sounds like a protection for you, and it is, but it works in both directions. It means the license is not a negotiation between equals where you might walk away. It is a compulsory relationship. You are entitled to a license, and by the logic of the whole system you are also expected to have one. The decree that forces them to serve you is the same decree that assumes you are a customer.

## The rate court: two judges in Manhattan set the price

The decrees answer the price question too, and the answer is one of the strangest facts in this entire series. If you and the PRO cannot agree on what you must pay, you do not go to arbitration, and you do not simply accept their number. You go to court, to a very specific court.

The Copyright Office describes it: "prospective licensees that are unable to agree to a royalty rate with ASCAP or BMI may seek a determination of a reasonable license fee from one of two federal district court judges in the Southern District of New York." This is the rate court. Two federal judges in Manhattan, as of that 2015 study, hold the authority to decide what a fair fee is for playing music, for the whole country, when the parties deadlock. I could not confirm in this session that the assignment is still exactly two designated judges today, so treat the specific count as verified as of 2015 and worth re-checking, but the mechanism is durable: the ultimate price-setter is a federal judge, not a market.

And the decree tilts the negotiation in a way that shapes everyone's leverage. While the fee is being fought over, the music does not have to stop. Anyone who has applied for a license "has the right to perform musical works in a PRO's repertoire, without paying the PRO any compensation, pending the completion of negotiations or rate court proceedings resulting in an interim or final fee." In other words, you can keep the speakers on while the lawyers argue, and you settle up later. That is a genuine protection for licensees, and it is also a reminder of how thoroughly this market is a creature of a legal settlement rather than ordinary commerce.

One more piece of the structure explains why the decree exists at all in this corner of copyright. Some rights, like the mechanical right to reproduce a song on a recording, are governed by a compulsory license with a statutory rate. The performance right is not. As the Copyright Office puts it, "unlike the mechanical right, the public performance of musical works is not subject to compulsory licensing under the Copyright Act. But ASCAP and BMI are subject to government antitrust regulation through longstanding consent decrees." There is no statutory rate card for playing a song in your store. There is a private toll, disciplined only by an 80-year-old antitrust deal and two judges in New York.

## The two toll booths outside the decree

Not every PRO wears the leash. Two of them operate entirely outside the consent decrees, and they got there by never joining the club that was sued.

The Copyright Office identifies them. Nashville-based SESAC, "founded in the 1930s," has a market share that "appears to be at least 5% and possibly higher." Global Music Rights, or GMR, was "established in 2013." Neither is subject to the DOJ decrees, and both, crucially, "add new members by invitation only." That last detail is the whole difference. ASCAP and BMI must accept any qualifying writer and must license any user who asks. SESAC and GMR choose their members, and because they sit outside the decree, they are not bound by the must-license, non-discriminatory-terms rules or the rate court.

For a business, this means the toll can come from more than two directions, and the two that answer to no rate court are the ones with the least constrained pricing. A venue that wants to be fully covered may end up dealing with four separate organizations, two of which can, in principle, set their terms without a Manhattan judge as a backstop. The smaller PROs are the reminder that the consent decree is not a law of nature. It is a specific deal that binds specific parties, and the parties who never signed it are not bound.

## How the collected money is split

Follow the toll after it is collected, because the split tells you what kind of machine this is. The PRO is a pass-through, and it says so.

ASCAP states that all fees it collects "are distributed as royalties, after deducting operating expenses (currently 10%)." It describes itself as operating "on a not-for-profit basis" and says it "distributes every dollar we collect, less operating expenses, back to our members" on what it calls a "follow the dollar" basis. These are ASCAP's own self-reported figures and characterizations. Read structurally, the model is a toll collector that keeps roughly a tenth for running the booth and routes the rest to the songwriters and publishers whose works were played.

The cadence is slow and survey-driven, which matters to the writers on the receiving end. ASCAP says it "distributes 12 royalty distributions a year, one per month," and that domestic royalties are usually distributed "approximately 6-9 months after a performance." And payment depends on the work actually showing up in ASCAP's performance surveys. That is the quiet asymmetry in the system. The bar pays a flat blanket fee up front for the right to play everything. The individual songwriter gets paid months later, and only to the extent a survey caught their song being played. The money that flows in as a blanket flows out as a per-song estimate, and the gap between those two accounting methods is where a lot of the fairness arguments about PROs live.

There is also a limit on what the toll booth is allowed to sell, and it is a telling one. Under its decree, "ASCAP is expressly barred from licensing any rights other than its members' public performance rights," which means "ASCAP may not license mechanical or synchronization rights." BMI's decree "lacks a similar prohibition," but "in practice BMI does not license any rights other than public performance rights." The performance-rights toll is deliberately kept in its own lane. The organization that collects for the right to play a song in public cannot bundle in the separate right to press it onto a record or sync it into a film. One flow, one toll, by design.

I want to be honest about what I could not verify. The often-repeated annual collection figures for these organizations, widely reported at roughly $1.7 billion for ASCAP and about $1.573 billion for BMI, could not be confirmed at a primary source in this session, because both organizations' financial and press pages returned JavaScript shells to automated fetching. So I am not stating a revenue number as fact. Likewise, BMI is frequently reported to have converted from a not-for-profit to a for-profit model around 2022, which would post-date the Copyright Office study that describes it as not-for-profit; I could not confirm that change at a primary source here, so I flag it as unverified rather than assert it. And the January 2021 decision by the DOJ to close its review of the decrees and leave them in place, widely reported, could not be confirmed at a primary DOJ URL in this session either. Treat all three as reported-but-unconfirmed and check them before relying on them.

## What a salaried reader should take from this

**The toll is the license, and the "or else" is written in someone else's statute.** The genius of the PRO model is that the organization does not have to make the threat itself. The Copyright Act does, at $750 to $150,000 per song, with the burden on you to prove you did not know. The blanket license is simply the cheaper of two doors, and the law built the expensive door. Whenever you find a fee that feels non-negotiable, look for the statute or the settlement standing behind it. The party collecting is rarely the party doing the enforcing, and that separation is what makes the toll feel like weather instead of a choice.

**A must-serve rule protects you and captures you at the same time.** The consent decree forces ASCAP and BMI to license anyone who asks, on non-discriminatory terms. That is a real shield against being gouged or refused. But the same rule that guarantees you a license also assumes you are a customer, and it turns the relationship from a negotiation you could walk away from into a compulsory one you are expected to be in. When a system promises it cannot turn you away, read the other edge of that promise: it usually also means you cannot easily leave.

**When you cannot audit what you are buying, you buy the whole thing twice.** No business can track in real time which of the 90-plus percent of licensable songs belongs to ASCAP versus BMI, so the safe move is to license both. You pay two tolls to play one playlist, not because you use both catalogs deliberately, but because the cost of guessing wrong is measured per song. This is the same trap that makes the [pharmacy benefit managers](/blog/how-pharmacy-benefit-managers-are-paid/) and the [credit rating agencies](/blog/how-credit-rating-agencies-are-paid/) hard to route around: when the intermediary controls the map, you cannot find the road that avoids it.

**The price of a public good can end up set by two judges.** The performance right has no statutory rate, so when the parties deadlock, a federal rate court decides what is fair, for the entire country, out of one courthouse in Manhattan. That is not a market clearing a price. It is a small number of officials interpreting an old settlement. Any time a price is set by a rule or a court rather than by competition, the interesting question is who wrote the rule and who is allowed to sit outside it, which is exactly why the invitation-only PROs that never signed the decree are worth watching.

## Related reading

- [How card networks are paid](/blog/how-card-networks-are-paid/): another invisible toll skimmed from a flow you never see, priced by rules the payer cannot negotiate.
- [How pharmacy benefit managers are paid](/blog/how-pharmacy-benefit-managers-are-paid/): the intermediary who controls the map, so you cannot find the road that avoids the fee.
- [How credit rating agencies are paid](/blog/how-credit-rating-agencies-are-paid/): a small set of gatekeepers whose stamp you cannot practically do without.
- [How taxi medallion owners are paid](/blog/how-taxi-medallion-owners-are-paid/): a license whose value is a government-enforced scarcity, and what happens when the scarcity breaks.
- [How alcohol distributors are paid](/blog/how-alcohol-distributors-are-paid/): a state-built middle tier that no producer is allowed to sell around.

## Fact-check notes and sources

The statutory-damages figures come from the U.S. Code. The structure of the consent decrees, the rate court, the market shares, and the compulsory-licensing distinction come from a U.S. Copyright Office policy study. The blanket-license scale, the payout mechanics, and the licensed categories come from ASCAP's and BMI's own published materials and are labeled as self-reported. Where a figure is self-reported or could not be verified at a primary source, it is flagged in the text and here.

- **The statutory-damages range** (not less than $750 or more than $30,000 per work infringed as the court considers just; increased to not more than $150,000 per work for willful infringement; reducible to not less than $200 per work where the infringer proves it was not aware and had no reason to believe its acts infringed) is from the statutory text of [17 U.S.C. section 504(c), via Cornell Legal Information Institute](https://www.law.cornell.edu/uscode/text/17/504), a primary source.
- **The consent-decree framework** (ASCAP and BMI subject to DOJ antitrust consent decrees since 1941, overseen by the Antitrust Division and enforced by federal district courts in New York City), **the decree amendment histories** (the government's 1934 and 1941 actions against ASCAP, the 1941 settlement modified in 1950 and most recently in 2001; the 1941 BMI decree superseded in 1966 and last amended in 1994), **the rate court** (prospective licensees unable to agree may seek a reasonable fee from one of two federal district court judges in the Southern District of New York), **the core decree obligations** (the PROs may acquire only nonexclusive rights, must grant a license to any user that applies on non-discriminatory terms, and must accept any qualifying songwriter or publisher), **the more-than-90-percent combined ASCAP and BMI market share of licensable songs**, **the SESAC and GMR facts** (SESAC founded in the 1930s with a share appearing to be at least 5 percent and possibly higher; GMR established in 2013; neither subject to the decrees and both adding members by invitation only), **the non-compulsory nature of the performance right** compared with the mechanical right, **the interim-performance right** (an applicant may perform works in the repertoire without paying compensation pending negotiation or rate court proceedings resulting in an interim or final fee), and **the rights-bundling prohibition** (ASCAP expressly barred from licensing anything other than public performance rights, so it may not license mechanical or synchronization rights; BMI's decree lacks that prohibition but in practice BMI licenses only performance rights) are all from the [U.S. Copyright Office, Copyright and the Music Marketplace (February 2015)](https://www.copyright.gov/policy/musiclicensingstudy/copyright-and-the-music-marketplace.pdf), a primary source (the consent-decree overview at p. 35). **The specific claim that the rate court remains a two-judge assignment is verified as of that 2015 study and should be re-checked before being stated as present-tense fact.**
- **The definition of a public performance** ("either in a public place where people gather (other than a small circle of a family or social acquaintances)" or transmitted to the public via radio, TV, or the Internet), **the licensed categories** (airlines, amusement parks, bars, restaurants and nightclubs, colleges, fitness clubs, hotels, retail stores, radio/TV) and the **more than 100 ASCAP rate schedules**, **the blanket-license description** (legal permission to entertain customers with a repertory of more than 20 million songs and scores, representing more than 1.1 million members, replacing the need to contact thousands of copyright owners for one license fee) are from [ASCAP, "Do I need an ASCAP license?" / ASCAP licensing FAQ](https://www.ascap.com/help/ascap-licensing) and are **ASCAP self-reported**.
- **The royalty-split mechanics** (operating on a not-for-profit basis; distributing every dollar collected less operating expenses back to members on a "follow the dollar" basis) and **the payout cadence and lag** (12 royalty distributions a year, one per month; domestic royalties usually distributed approximately 6 to 9 months after a performance; payment dependent on the work appearing in ASCAP's performance surveys) are from [ASCAP, "Royalties and Payment"](https://www.ascap.com/help/royalties-and-payment). **The specific operating-expense figure, that ASCAP distributes royalties "after deducting operating expenses (currently 10%)," is from ASCAP's** [licensing FAQ](https://www.ascap.com/help/ascap-licensing). Both are **ASCAP self-reported**.
- **BMI's scale and framing** (representing more than 1.5 million songwriters, composers, and publishers with over 25 million musical works; offering more than 60 different music licenses; and framing federal copyright law as the reason permission is required, that when copyrighted music is performed in any establishment permission must be granted from the copyright owner) are from the [BMI Business Owner FAQs](https://www.bmi.com/licensing/entry/business_owner_faqs) and are **BMI self-reported**.
- **Not verified, and therefore not asserted as fact:** the annual collection figures widely reported at roughly $1.7 billion for ASCAP and about $1.573 billion for BMI (both organizations' financial and press pages returned JavaScript shells to automated fetching, so these are self-reported claims pending confirmation from ASCAP's annual report and BMI's press releases); BMI's reported conversion from a not-for-profit to a for-profit model around 2022 (the 2015 Copyright Office study describes BMI as not-for-profit, so any change post-dates that source and needs a current primary citation); the reported January 2021 DOJ decision to close its review of the ASCAP and BMI decrees and leave them unchanged (the DOJ closing-statement URL could not be confirmed in this session); the exact current per-venue dollar amounts of ASCAP or BMI blanket fees (the specific rate schedules sit behind licensee logins and were not retrievable, so the structure of the 100-plus ASCAP and 60-plus BMI rate schedules is described rather than a single dollar figure quoted); and whether the rate court remains a two-judge Southern District of New York assignment today (verified only as of the 2015 study).

*This post is informational and journalistic, not legal, career, or financial advice, and nothing here is a determination of whether any particular business needs a license. It describes the U.S. Code, a U.S. Copyright Office policy study, and the organizations' own published materials. Statutes, decrees, rate schedules, and organizational figures change, and several figures here are self-reported or flagged as unverified as noted, so verify current status before relying on any of them. Mentions of ASCAP, BMI, SESAC, Global Music Rights, and any other named organization are nominative fair use, and no affiliation is implied.*

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