As you may or may not know Pandora is trying to push a bill through congress that would slash payments to artists by as much as 85%. By “pushing through congress” we actually mean paying-oops er we mean being a “top contributor” to Rep. Chaffetz according to Open Secrets, and then Chaffetz magically sponsors the IRFA bill which will pretty much just benefit Pandora. Pandora pays hundreds of thousands of dollars to lobbyists including a former legislative director of a leading member of the House Judiciary Committee. It will let Pandora get around agreements it made with artists unions and copyright holders. This is like Delta Airlines going to congress and asking them to pass a law to force their pilots and flight attendants into accepting an 85% pay cut. We don’t do this in this country. Screw these guys.
So every day this week we are gonna highlight something that we particularly offensive about Pandora and this bill.
Tell Congress: Don’t Slash Music Creators’ Pay
#2 The IPO Problem.
First consider this. Did Pandora mislead investors in the months leading up to its successful IPO in June 2011? I mean they convinced investors that they had a sound business model, that they would be profitable, and this must have included paying the rates to artists that they had agreed upon in 2009 that would be in effect until 2015.
Did Pandora tell prospective nvestors that Pandora would need to renegotiate the rates they agreed to pay to artists in order to become sufficiently profitable to justify their IPO share price? Did they tell investors that after their IPO they wanted to go to Congress and lobby to pass a law to make their business sufficiently profitable to justify their share price?
And I can’t imagine that they only just discovered that they wanted to change this rate. I bet they’ve been planning this for a long time. I mean you don’t just cook up a bill for Congress overnight. So all we need is ONE former employee or associate of Pandora that knows of any talk before the IPO of planning to change this rate after the IPO and Pandora is Toast. (email us!)
Look at their chart:
With mostly institutional investors, I bet there is someone out there with resources that feels like they got burned on their Pandora stock. Shareholder problems?
OR perhaps Pandora didn’t mislead investors leading up to the IPO. Which is most likely how they will respond. If that is the case consider the following:
Pandora is perfectly capable of becoming profitable with the current artists royalty rates.
This means Pandora is just plain old greedy. Greedy and just like every other corporation in the 1% because they are using their lobbying power to ask Congress to change the law to lower the agreed-upon royalty rates simply benefit their bottom line. And all of this at the expense of musicians over whom they have absolute power. And you know what they say about absolute power.
Screw you too, Pandora.