Celler Hearings

Emanual Celler
The Celler hearings offered early hints of what would become the payola scandal. Several witnesses charged disk jockeys with favoring BMI because of payola from publishers and record companies. The House Judiciary Committee's Antitrust Subcommittee spent a year investigating ASCAP's charge that the nation's broadcasters had conspired to push bmi music like rock and roll on onto the public by denying air time to good music.

By the mid-50s, BMI licensed eighty percent of all music on radio. ASCAP charged that BMI had conspired with radio station owners and independent record companies to push rock and roll on young listeners. This was a fight against low quality music, race music, sexual license and juvenile delinquency. as well as a struggle to control key elements of the entertainment industry.

Arthur Schwartz a veteran songwriter and public relation man for the ASCAP affiliated Songwriters Association of America stated very clearly in a letter to Smathers that it was wrong for broadcasters to own the only means by which music becomes popular. Station owners, disk jockeys, recording companies and the directors of BMI have been guilty of music not owned by the broadcasters the concern of the Senate is that the public has suffered seriously from these suppressive devices.

In 1953, ASCAP, Alan Jay Lerner, Ira Gershwin and Paul Cunningam filed a $150 million lawsuit (Schwartz et al vs.Broadcast Music) against BMI and the major radio networks.   Claiming BMI operated a monopoly with the broadcasters who owned BMI stock. The charge seemed  to have some merit if  the stations had a financial stake in BMI songs, they might favor it when choosing music to air. However the broadcasters made no money directly from BMI was a non-profit that paid no dividends. All money from performing licenses went to administrative costs and was divided between writer and publisher. ASCAP countered with BMI music was inferior, threat to American culture. 

FTC was looking into the possibility that payola violated the agency's rules against unfair practices, like commercial bribery.  FCC chairman John Deafer scheduled public hearings to begin on December 7 after receiving a complaint from the American Guild of Authors and Composers that payola encompassed more than disc jockeys.

ASCAP lobbied U.S. House and Senate to investigate for anti-trust violations and pass legislation forcing broadcasters to divest their holdings in BMI. The suit went on for years with Frank Sinatra supporting it with a telegram. Sinatra's telegram implied that Columbia dropped his contract because he had been forced to record inferior BMI songs instead of the more commercial ASCAP songs. It turned out that ninety-five percent of the songs that Sinatra recorded were were ASCAP and the two that were BMI were published by Sinatra's own company.

What ASCAP was really unhappy with was what was happening as BMI was reaching parity. As long as rock and roll remained marginal, artistically and economically to ASCAP customers and members ASCAP did not much care.  It was the rise of rock and its acceptance into the mainstream and its  presented a threat to longstanding ideas of what was culturally acceptable. Linked to rock as long as marginal

.In 1956, spurned on by ASCAP, the House Judiciary Anti-Trust  Subcommittee, chaired by Emmanuel Celler (D-N.Y.) held hearings looking into network and radio practices. Specifically that thetworks, through BMI, contoled the music that the public heard over the air and on records. THe charges were mainly by ASCAP songwriters. One witness Billy Rose claimed that  BMI was "responsible rock and roll and other musical monstrositites which are  muddying up the airwaves."

In 1957, Bing Crosby  wrote the chairman of the Senate Commerce Committee accusing BMI of pushing bad music on the American public by using their unethical relationship with broadcasters and called for an investigation. Emanuel Cellar (D New York) chairman of the House Judiciary Committee spoke out against it, then he presided over hearings where pro-ASCAP feelings were evident. A parade of pro-ASCAP witnesses condemn the quality of BMI music and attacked its practices that allegedly ensured its exposure at the expense of ASCAP music. No action was taken since ASCAP and BMI were operating under 1941 consent agreement little could be done.Celler expressed a desire for broadcasters to sell their stock. Since the Schwartz suit against BMI was still active, the committee was constrained. depths of abuses may have been pressuring BMI to reach a settlement ASCAP anti-BMI witnesses were refuted by pro-BMI ones

ASCAP wanted the  Judiciary Antitrust Subcommittee Judiciary to introduced a bill limiting the amount of stock broadcasters could own.

Testimony before the FCC began on January 11 with ASCAP president Stanley Adams accusing BMI of using payola to force its records on disk jockey and again called on the FCC to force the broadcasters to divest themselves of BMI holdings.

BMI chairman Sydney Kaye countered by calling ASCAP"s charges diversionary to cover up their own misdeeds.

Several witnesses charged disk jockeys with favoring BMI material because of untoward inducements from publishers or record labels. Pay-for pay, personal gifts, given writer credits set up distributors with free records supplied popular artist who appeared free at record hops and concerts, BIM's paying royalties against future earnings to help new publishers and build its membership. Was portrayed as an attempt to bribe performers and disc jockeys. The monies used were repaid from future earnings and therefore amount loans from the beneficiaries to themselves hints of under the table deals violating ethics, if not the laws, governing competition.

The Celler report was issued in 1957. It recommended that the Justice Department undertake "complete and extensive investigation of the music field to determine whether the anti-trust laws have been or are being violated."

The Committee called on the Justice Department to determine if anti-trust statutes had been broken.  lack of action, Disc jockeys remained focus of continuing attacks against rock and roll, as critics seized on payola as a vulnerable point. A short time later Congress held hearings on Smathers bill which called  for the breakup of broadcasting monopolies. Would effect "4,000' little fellows" independent stations not aligned with BMI, derived additional income from their recording services or investments in publishing. The failure of the Celler and Smathers hearings fueled ASCAP's continued resentment toward BMI. Despite legal and legislative losses ASCAP never wavered from its sense of cultural superiority. ASCAP"s treatment of members system of payment and power of the board of directors composer Hans Lengsfelder charged the board acted in its own best interest at the expense of the members. Filed a civil suit that caught the attention of the House Subcommittee on Small Business. Chaired by James Roosevelt the committee heard testimony that  hinted ASCAP leaders had violated the trust of its membership.