File this under Pop Goes the Weasel.
I told you last week about Oregon Senator Ron Wyden, a Democrat, suddenly sponsoring his own legislation to take away more rights from the pop, rock, R&B and all music artists who made records before 1972.
Why does Wyden, who has nothing to do with Hollywood, care about putting through his own legislation about these artists? His ACCESS to Recordings Act would severely hurt these artists whose music we love– and who are not getting remuneration for their work. Wyden’s ACCESS act would cut short copyright holders’ years of ownership, put recordings in public domain, and cut off royalties on master recordings for heirs of the artists.
All those artists are subject to a loophole in the copyright law and receive almost nothing in proceeds from digital and satellite broadcasts. Good legislation is going through Congress called the Music Modernization Act, which would get everyone paid and even ensure their heirs’ rights. Within the Music Modernization bill there is something called the Classics Act which protects common law rights of these musicians.
So, why den does the Oregon senator care so much after the House approved the bill that’s supported by artists and the Grammys aka NARAS?
Well, it turns out that Ron Wyden may have a personal interest in forcing his ACCESS act: his close friend, donor, and mentor to his son is a hedge fund manager in New York named David E. Shaw. Shaw has contributed heavily to Wyden for years. Shaw also helped Wyden’s son, Andrew, launch his own hedge fund out of his basement about five years ago. After giving young Wyden a paid internship in his office, Shaw then gave him $3 million to start his own firm, called ADW Holdings.
Shaw — a major Democratic donor– is also a big Wyden supporter. He donated $17,000 to Wyden in the 2004 cycle, $15,000 in the 2006 cycle, $13,000 in 2008.
Shaw also has a major financial interest in all things digital. His was one of the top hedge funds invested in Spotify. Back in January, getting ready for the Spotify IPO, D. E. Shaw made a whopping $16 billion when they cashed out half the shares they bought in 2015. Shaw literally doubled its money– their investment was $8 billion– and still held onto a large chunk of the company.
Spotify, like all digital services, depends on the pre-1972 recordings being either in public domain or receiving the lowest possible royalty. Contemporary artists like Drake may be selling like hot cakes, but it’s catalog– the Beatles, Motown, classic rock, etc– that keeps the business going.
Then there’s Shaw’s ties to SiriusXM Satellite Radio. Sirius really depends on not paying royalties on pre-1972 recordings and has been in endless lawsuits on this subject. Nearly every Sirius station is devoted to old music. Imagine if they had to pay for it! But that’s what Shaw, Wyden’s pal, is heavily invested in. D. E. Shaw had 2.1 million shares of Sirius noted in their March 31st filing of holdings. Shaw’s investment had increased by 107%.
But it all comes back to Wyden’s relationship with Shaw. Why else would Wyden care if master recordings from the 20s, 30s, and 40s go into public domain? Only that digital music is free to its broadcasters who are directly tied financially to not only one of his biggest backers, but the guy who helped establish his son on Wall Street. Wyden’s bill only serves to help himself, his friends, and by extension, his family. Recording artists would suffer irreparable harm.
Oregon– particularly Portland– is supposed to be an enlightened, sophisticated place. I’m surprised they’ve let a Democrat, of all things, get involved in this mess especially if he’s benefiting from it. For decades, music artists– particularly black/jazz/soul/R&B etc — have suffered rip offs from everyone. Many have died in poverty, and even more have died young. It’s almost a cliche now that black artists die without money, after terrible lives. The Music Modernization Bill could help stop that. But Ron Wyden’s only motivation for perpetuating the cliche is certainly suspicious. Enough!
