Yesterday we reported on loud rumbles of discontent in the UK over future funding cuts to the PRS Foundation – the charitable offshoot of collecting society PRS for Music – with the Featured Artists Coalition (FAC) asking PRS for Music to rethink the cuts.
PRS for Music has now published a response that outlines its reasons for cutting its funding commitment from “between £2.5 million and £3 million in recent years” to “at least £1 million annually from 2024.”
PRS for Music is keen to explain that it has funded the Foundation for 22 years, and has “provided to PRS Foundation close to £40 million.” The statement continues: “In addition to the donations, PRS for Music also subsidises the operating costs for PRS Foundation,” and clarifies that it will continue to subsidise these operation costs, although it doesn’t say how much will be provided.
The key part – that explains why the cuts have been made – may not, however, placate the critics. “The donations from PRS for Music are funded through income generated separately from the royalties paid out to our members. This income has declined significantly over recent years, not least because of historically low interest rates. As such, the difficult decision was made by the Members’ Council to reduce our donations to reflect the funds available for this income at this time.”
PRS for Music also says that donations of between £1.25m and £1.5m were made each year until 2015, with the more recent £2.5m to £3m in annual funding, “reflecting the availability of funds at the time.”
This new reduction – measured in millions of pounds – is significant, especially given the historical context. Goods and services worth £1m in 2000, when funding began, is the equivalent of £1.5m in 2021, according to the Bank of England’s inflation calculator.
To reiterate what we said yesterday: Brits spent £1.68bn on music in 2021, and PRS for Music’s collections grew by 22.4% to £777.1m last year. The industry at large thus has the ability – and the cash – to find the shortfall in PRS Foundation’s funding.
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