Bars could close if PPL fees increase

03-Nov-2011 - Last updated on 11-Mar-2017 at 20:27 GMT

Under threat: Late night bars and nightclubs could close

Late-night pubs, bars and clubs that host DJ nights and discos will be forced out of business if proposed changes to the way music royalties are paid are pushed through — that’s the clear message from a host of operators who laid bare the shocking extent of the hikes.

The 36-strong bar chain Intertain revealed that its PPL bill would rocket from £150,000 to an eye-watering £7m a year if the royalties collection firm gets its way on increases of up to 4,000% on Specially Featured Entertainment (SFE) fees. Chief operating officer Simon Kaye said the company “would not be able to support that level of payment”.

The proposed new charges are based on a calculation of how much extra customers would likely spend when an SFE event takes place, with fees based on average attendance, plus the number and duration of SFE events.

Atmosphere Bars & Clubs, which has 30 sites, would see its SFE fees increase to an estimated £1.8m per year from £150,000.
“We would have to make a complete review of the way that we operate, and there would be some closures as some of the venues would just not be viable,” said finance director Adam Bellamy.

“This would also mean job losses. It’s pretty devastating to businesses that rely on that music for trade.”

Cavendish Bars, which operates more than 20 late-night bars, currently pays £50,000 to £60,000, and founder Christian Arden believes the proposed charges would add another £100,000. He said: “It’s absolutely insane. We run late-night bars that depend a lot on music. I think it’s pure greed from PPL. It would straightforwardly put us out of business.

“I think the way in which the companies charge us should be regulated. At the moment, they ‘guesstimate’ the numbers coming through your door.”

John Hayes, who runs the four-strong Bamboogie chain in Scunthorpe and is chairman of the Bar Entertainment & Dance Association (BEDA), said that his charges would increase from £4,000 to £141,000.

“We think it’s unsustainable and ridiculous. PPL is not on this planet. If the charges come in, I would have to close the business, much like many other operators around the country. We just don’t make that kind of money.”

A coalition of trade bodies — including the British Beer & Pub Association, Association of Licensed Multiple Retailers and BEDA — have stumped up £200,000 to fight the proposed fees.

The trade won a high-profile case against PPL charges in 2009, when it was forced to refund £18.13m to pubs after raising fees for background music by 403% in 2005.

There has already been a minor victory in this campaign with the consultation extended until the end of the year and PPL shifting back the proposed implementation date from April 2012 to January 2013.

The first round of meetings with trade bodies has now also been scheduled.