Dionne Warwick Assails Radio One's Cathy Hughes for Unfair Compensation to Musicians for their Work

There is a war of words occurring between Radio One's founder, Cathy Hughes and Grammy-award winning singer Dionne Warwick, over a campaign she has embarked on against fairly compensating musicians for their work. Ms. Warwick maintains that Cathy Hughes has added her name to a list of African American artists and civil rights activists in this campaign. According to her blog post on The Huffington Post, Warwick states emphatically that this isn't the first time Ms. Hughes has engaging in smearing African American leaders to protect her profits. As you know, each time we purchase a CD or download a song, from iTunes, for example, the artist is compensation, but the reality is that isn't the case when the musician's work is played on the radio. Ms. Warwick states that occurs because "corporate radio CEOs like Cathy Hughes are exploiting a legal loophole that allows them to play these artists songs without paying them for their work." Ms. Hughes is upset and has taken out radio spots on other stations, against support for the Performance Rights Act, which is now called the Civil Rights for Musicians Act. Yes, this is the same bill written by Rep. John Conyers and it's purpose is to close the legal loophole radio corporations such as Radio One use to deny African American artists fair compensation.


I have been very critical of Cathy Hughes and Radio One for the horrible handling of the company's financial matters, it's imploding stock price and valuation, as well as the fact that both Ms. Hughes and her son, Alfred Liggins III, who serves as CEO and president and Hughes as chairwoman, seemed to be profiting handsomely while the company struggles. Last May I blogged about this enormous compensation both received as the company struggled, so much so that they have had to sell several stations. This "dynamic duo" secured hefty pay packages -- Hughes's salary would increase at least 75 percent, from $427,800 to $750,000 a year, under the pact. She would be eligible for an annual bonus worth up to $250,000, according to an April 18 filing with the SEC. Liggins would receive $980,000 in salary, a 70 percent increase over the $575,370 he made in 2007, and have the opportunity to match that in an annual bonus, contingent in part on the company meeting certain performance goals. He would be paid a $1 million "signing bonus" because, the Radio One compensation committee said, he has been underpaid for the last three years. Liggins also would be paid $4.8 million to compensate him for losses he incurred when he was forced to repay a company loan to buy Radio One stock several years ago. Liggins received $1.1 million in total compensation in 2007; his mother received $602,252. That's very significant and rather wasteful for a company that is struggling.

I suspect the only way Ms. Hughes and her son were able to procure such hefty pay packages is due to some control over the tightknit board of directors, who have obviously overreached in their strategy, underperformed in executing it and sometimes put their own interests ahead of those of their public shareholders. Ms. Warwick has asserted that Radio One isn't struggling and I beg to differ. It is struggling but at the same time, Cathy Hughes and her son are milking the company dry, filling their coffers instead of putting the company, she built in the early years despite the enormous odds that were against her. She literally lived at the station in the early days with her son to help make ends meet, but she never lost sight of her dream. Her fortunes began to change when she revamped the R&B station to a 24-hour talk radio format. It is, indeed, a tragedy when we see what has been occurring at this company.

I was appalled to learn that during the presidential campaign, she appeared on CNN and touted a plan to help the homeless in this country. Though I have yet to see her words in action, I was taken aback by her comments to Tony Harris about then presidential candidate Barack Obama. She said, "he feels like a Hollywood movie." "The movie "Wag the Dog." Norman Lear is one of his big supporters, I understand." "And I think that we're watching Hollywood the same way -- I think it's a Hollywood ploy." "I called it a dazzling deception. And black folks have historically gone for dazzling deception." "I want someone in there who knows what they're doing, who's qualified for the position, and who has done more than taken photos, waved at the crowd, and kissed babies." Wow, that's heavy, but considering her support for Republican National Committee's head Michael Steele, who is the GOP gaffe machine, that seems ingenuous at best. I could also view Radio One's position on the compensation of musicians "a dazzling deception."

Though I have never been a big fan of Dionne Warwick and I was disappointed when she was caught with marijuana at an airport, I will give her credit for speaking out about Cathy Hughes' actions. The notion that we need the Civil Rights for Musicians Act should not be limited just to black artists, it should also encompass all musicians, no matter their race. After reading about the literal financial shakedown of Radio One by Cathy Hughes and her son, I have lost all respect for her and her accomplishments. I have seen hostile takeovers occur and executives kicked out of the very organization they have built. Looking at the financial numbers in the company's SEC filings, Cathy Hughes and her son should meet such a fate -- removed from the day-to-day operations of Radio One.