Play Meter
Issue: 1981 May 01 - Vol 7 Num 8 - Page 5
basis for a conclusion that the efforts of jukebox
operators through their selection of records and their
performance promote the dissmination of songs in any
significant manner."
"On the other hand, the contribution of the copyright
owner whose works are performed under the
compulsory license directly benefits the jukebox
operator and location owner."
"We cannot on the basis of the evidence presented
by the jukebox industry find that our schedule will have a
disruptive impact on the structure of the jukebox
industry or disturb generally prevailing industry
practices. By introducing the fee schedule in two phases,
we have, in our view, adequately reflected in our decision
the objective of this statutory criteria. The jukebox
industry pays reasonable market prices for all other
goods and services they require. We hold that they can
pay the schedule we have adopted for the central
commodity of their boxes without adverse impact ."
Garcia's dissenting opinion
CRT Commissioner Frances Garcia stated, "It is my
considered opinion and thus my conclusion that the
royalty rate increase should have been $30 and $60."
James' dissenting opinion
CRT Chairman Clarence James stated, "Evidence
offered by ASCAP indicated the minimum fee for an
establishment which uses tape recorders, record
players, or free jukeboxes is $70. Evidence offered by
BMI indicated that the minimum fee is $60 per year.
SESAC offered no evidence in this regard. Further, the
evidence indicated that the maximum fee for ASCAP for
this type of establishment is $490, and for BMI $240.
Combining the minimum for both ASCAP and BMI
would result in an annual fee of $130. This evidence was
uncontroverted or refuted by AMOA."
"In essence, the majority [of CRT members] reached
a conclusion on the premise that a true market value rate
would result in too large an increase in fees . The majority
was set on course by what they deemed were the guiding
standards of the statute which referred to minimizing the
disruptive impact on the economic structure of the
industries involved. It was the majority view and opinion
that a large increase in fees would be oppressive to the
industry and would 'impact on small operators.' In my
opinion, the majority misconceived the evidence in the
record when this standard was applied. First, it is ap-
parent that the standard was applied only to jukebox
operations. There apparently was no consideration
given to significant disruption in existing market prices
for performing rights societies, fees paid by other
analogous music users. The majority, in essence,
appears to have reached a conclusion based on an ability
to pay theory.
"The real economic impact of increased fees on juke-
box operators cannot be determined from this record.
Economic data supplied by AMOA was of questionable
validity and could not be used as a basis for any rate
determination. In addition, the record simply does not
support AMOA testimony that jukebox operators are
destitute or will go out of business if fees are increased.
"In fact, the evidence is clear and convincing to the
contrary. The record in this proceeding shows that the
coin machine operators pay a fair market orice for all
goods and services they may use. Further, it has been
established in the record that jukebox operators have
traditionally shared one-half of the gross revenue with a
joint venture partner who neither contributes to the
venture nor takes any risk. This arrangement is neither
bargained nor negotiated but is traditionally given away.
How is it that jukebox operators can claim destitution or
inability to pay a fair and reasonable rate, when for years
over one-half of their revenue has been given away? Even
the small operators, the concern of the majority, split
revenue 50-50 with the establishment owners. ls it appro-
priate for jukebox operators to come before this
Tribunal and claim economic hardship? In my opinion it
would be far better to reanalyze or reevaluate the tra-
ditional practice of giving away one-half of the revenue
than to seek economic redress from this Tribunal.
"The rate established
by the majority is not
reasonable. Nor does it afford the copyright owner a fair
return for his creative work. There is no evidence in the
record to support the rate, no logic behind it, and no
equity in it.
"In my opinion, the record is replete with evidence
that the maximum reasonable marketplace value fee
should be $130 , not $25 or $50 . I find that the record is
void of any valid argument that once a reasonable rate is
established there should be a discount because of
economic hardship. There is simply no probative
evidence in the record that jukebox operators should not
or cannot pay rates comparable to thos paid by other
analogous music users for the same product."
t
Bally earnings, revenues high in '80
CHICAGO- Bally Manufacturing
Corp. in the year ended December
31, 1980 logged record earnings and
revenues for the fourth consecutive
year.
Robert E. Mullane, chairman of
the board and president of Bally
announced that for 1980- which
also marked the fifth straight year of
increased earnings and revenues-
net income was $53.5 million, up
more than 15 % from the previous
record high of $46.3 million earned in
1979. Earnings per share for 1980
were $2.01, 16 % above the $1.73 per
share reported a year ago.
Investment tax credits included in
Bally earnings were $1.4 million (5¢
PLAY METER, May 1, 1981
per share) in 1980 compared to $7.M
million (29¢ per share) in 1979. Exclu-
sive of investment tax credits in both
years, 1980 per share reflected an
increase of 36 % above 1979.
Revenues for the year were a record
$690 .1 million compared to $386.2
million in 1979.
Mullane commented on the year's
results : "Earnings and revenues
from Bally's manufacturing, distribu-
ting, and equipment operating
divisions were at record levels. In
particular, Midway Mfg. Co. and our
Aladdin's Castle family amusement
centers both reported substantial
increases in earnings and revenues."
Results at Bally's 83-percent
owned P.ark Place hotel/casino in
Atlantic City were termed "dis-
appointing." This branch contribu-
ted $2.1 million to 1980 earnings, or
8¢ per share. Escalating operating
costs in the emerging Atlantic City
casino were cited for the Park Place
showing- but Mullane alluded to
favorable New Jersey rulings as
boding well for future earning
prospects there.
On Bally's outlook for 1981 ,
Mullane said: "We fully expect con-
tinued strength in Bally's manu-
facturing, distributing, and equip-
ment operating divisions and a
substantial improvement in the
operating results of Park Place."
5
operators through their selection of records and their
performance promote the dissmination of songs in any
significant manner."
"On the other hand, the contribution of the copyright
owner whose works are performed under the
compulsory license directly benefits the jukebox
operator and location owner."
"We cannot on the basis of the evidence presented
by the jukebox industry find that our schedule will have a
disruptive impact on the structure of the jukebox
industry or disturb generally prevailing industry
practices. By introducing the fee schedule in two phases,
we have, in our view, adequately reflected in our decision
the objective of this statutory criteria. The jukebox
industry pays reasonable market prices for all other
goods and services they require. We hold that they can
pay the schedule we have adopted for the central
commodity of their boxes without adverse impact ."
Garcia's dissenting opinion
CRT Commissioner Frances Garcia stated, "It is my
considered opinion and thus my conclusion that the
royalty rate increase should have been $30 and $60."
James' dissenting opinion
CRT Chairman Clarence James stated, "Evidence
offered by ASCAP indicated the minimum fee for an
establishment which uses tape recorders, record
players, or free jukeboxes is $70. Evidence offered by
BMI indicated that the minimum fee is $60 per year.
SESAC offered no evidence in this regard. Further, the
evidence indicated that the maximum fee for ASCAP for
this type of establishment is $490, and for BMI $240.
Combining the minimum for both ASCAP and BMI
would result in an annual fee of $130. This evidence was
uncontroverted or refuted by AMOA."
"In essence, the majority [of CRT members] reached
a conclusion on the premise that a true market value rate
would result in too large an increase in fees . The majority
was set on course by what they deemed were the guiding
standards of the statute which referred to minimizing the
disruptive impact on the economic structure of the
industries involved. It was the majority view and opinion
that a large increase in fees would be oppressive to the
industry and would 'impact on small operators.' In my
opinion, the majority misconceived the evidence in the
record when this standard was applied. First, it is ap-
parent that the standard was applied only to jukebox
operations. There apparently was no consideration
given to significant disruption in existing market prices
for performing rights societies, fees paid by other
analogous music users. The majority, in essence,
appears to have reached a conclusion based on an ability
to pay theory.
"The real economic impact of increased fees on juke-
box operators cannot be determined from this record.
Economic data supplied by AMOA was of questionable
validity and could not be used as a basis for any rate
determination. In addition, the record simply does not
support AMOA testimony that jukebox operators are
destitute or will go out of business if fees are increased.
"In fact, the evidence is clear and convincing to the
contrary. The record in this proceeding shows that the
coin machine operators pay a fair market orice for all
goods and services they may use. Further, it has been
established in the record that jukebox operators have
traditionally shared one-half of the gross revenue with a
joint venture partner who neither contributes to the
venture nor takes any risk. This arrangement is neither
bargained nor negotiated but is traditionally given away.
How is it that jukebox operators can claim destitution or
inability to pay a fair and reasonable rate, when for years
over one-half of their revenue has been given away? Even
the small operators, the concern of the majority, split
revenue 50-50 with the establishment owners. ls it appro-
priate for jukebox operators to come before this
Tribunal and claim economic hardship? In my opinion it
would be far better to reanalyze or reevaluate the tra-
ditional practice of giving away one-half of the revenue
than to seek economic redress from this Tribunal.
"The rate established
by the majority is not
reasonable. Nor does it afford the copyright owner a fair
return for his creative work. There is no evidence in the
record to support the rate, no logic behind it, and no
equity in it.
"In my opinion, the record is replete with evidence
that the maximum reasonable marketplace value fee
should be $130 , not $25 or $50 . I find that the record is
void of any valid argument that once a reasonable rate is
established there should be a discount because of
economic hardship. There is simply no probative
evidence in the record that jukebox operators should not
or cannot pay rates comparable to thos paid by other
analogous music users for the same product."
t
Bally earnings, revenues high in '80
CHICAGO- Bally Manufacturing
Corp. in the year ended December
31, 1980 logged record earnings and
revenues for the fourth consecutive
year.
Robert E. Mullane, chairman of
the board and president of Bally
announced that for 1980- which
also marked the fifth straight year of
increased earnings and revenues-
net income was $53.5 million, up
more than 15 % from the previous
record high of $46.3 million earned in
1979. Earnings per share for 1980
were $2.01, 16 % above the $1.73 per
share reported a year ago.
Investment tax credits included in
Bally earnings were $1.4 million (5¢
PLAY METER, May 1, 1981
per share) in 1980 compared to $7.M
million (29¢ per share) in 1979. Exclu-
sive of investment tax credits in both
years, 1980 per share reflected an
increase of 36 % above 1979.
Revenues for the year were a record
$690 .1 million compared to $386.2
million in 1979.
Mullane commented on the year's
results : "Earnings and revenues
from Bally's manufacturing, distribu-
ting, and equipment operating
divisions were at record levels. In
particular, Midway Mfg. Co. and our
Aladdin's Castle family amusement
centers both reported substantial
increases in earnings and revenues."
Results at Bally's 83-percent
owned P.ark Place hotel/casino in
Atlantic City were termed "dis-
appointing." This branch contribu-
ted $2.1 million to 1980 earnings, or
8¢ per share. Escalating operating
costs in the emerging Atlantic City
casino were cited for the Park Place
showing- but Mullane alluded to
favorable New Jersey rulings as
boding well for future earning
prospects there.
On Bally's outlook for 1981 ,
Mullane said: "We fully expect con-
tinued strength in Bally's manu-
facturing, distributing, and equip-
ment operating divisions and a
substantial improvement in the
operating results of Park Place."
5
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