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There’s a big row brewing within the UK music industry over future cuts to the funding for PRS Foundation, the charitable offshoot of collecting society PRS for Music.

The organisation has funded emerging musicians and talent-development programs with more than £41m since 2000, but from 2024 the society’s annual funding for the foundation will be cut by 60%.

Now the Featured Artists Coalition (FAC) has criticised the decision and launched a petition asking PRS for Music to rethink the cuts.

“Without exception, the news of the funding cut has been met with bewilderment amongst FAC artists,” wrote FAC CEO David Martin in a letter published on his organisation’s website.

“Not only does the move feel short-sighted, it seems to make little financial sense, given that PRS Foundation grantees almost triple their PRS income within two to three years of receiving a grant. This funding is quite literally the definition of investing in the future.”

Martin also suggested that PRS for Music’s recent financial results make a strong case for the funding not to be cut.

“The £2.5m donation to PRS Foundation in 2021 represents just 0.32% of PRS for Music’s collections, and 0.37% of distributions to members according to the society’s 2021 reporting,” he wrote.

“If we compare this to the approach of other societies – which in many cases deduct between 5% and 10% for social and cultural purposes – the outlook for the UK’s investment in future music makers becomes comparatively bleak.”

The FAC’s petition follows criticism of the budget cuts by fellow UK body the MMF, which represents managers. Earlier this month, it urged PRS for Music “to rethink this decision, and to consider redistributing unallocated ‘black box’ royalties in order to support emerging and grassroots talent”.

There are some wider tensions running behind this, with the MMC and now the FAC also unhappy about the outcome of PRS for Music’s recent elections for publisher and songwriter members of its Members’ Council.

“Whilst no reflection on the successful candidates, the outcome of the elections did very little to address what is becoming a glaringly obvious problem regarding PRS’s diversity,” wrote Martin.

“Despite a broader field of candidates standing for election this year, Hannah Peel was the only female elected and there were no Black, Asian or minority ethnic candidates selected, once again.”

While the British music industry does a lot of its intra-body fighting behind closed doors, the twin criticisms of PRS for Music’s diversity and PRS Foundation cuts are becoming a very public dispute.

PRS Foundation CEO Joe Frankland recently published a response to the donation reduction announcement, setting out the foundation’s achievements, and calling the decision “disappointing given that PRS’ overall collections are on an upward trajectory and the Society is on a path to collect £1 billion annually from its licensees”.

Frankland also pointed out that PRS for Music is not the only source of funding for the PRS Foundation: in recent years it has raised an additional £1m-£2m a year from sources including PPL, UK Arts Councils, “key music industry sponsors” and individual donors.

“We need to raise new funds in order to continue our invaluable work breaking down barriers to progression and bolstering the talent development ecosystem,” he wrote.

“This can happen with more help from key players across the sector and continued support from the PRS membership – particularly those who are in a position to help give back to the music creator community.”

Let’s boil this down to the fundamentals. Brits spent £1.68bn on music in 2021, up 8.7% year-on-year. The UK’s recorded music industry (i.e. labels) saw its revenues grow by 12.8% to £1.26bn. As Frankland alluded to, PRS for Music’s collections grew by 22.4% to £777.1m last year. And on the DSPs side, Spotify alone made revenues of €994m (845.6m) from the UK in 2021.

Given this backdrop, it will be hugely embarrassing if the industry is collectively unable, given a couple of years’ notice, to find at least £1.5m to cover the shortfall in PRS Foundation’s funding if PRS for Music’s decision stands.

UPDATE: PRS for Music has published a response to the FAC petition and criticism.

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Stuart Dredge

Music Ally's Head of Insight

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