Fees Fluster Fest

"Without controversy," Italian music industry veteran Piero La Falce says, "Sanremo wouldn't be Sanremo."

Some 57 years after launching, the Sanremo Festival of Italian Song can still entrance viewers, even while splitting industry opinion.

The Italian industry's flagship event is also a regular fixture in the Italian press for reasons unconnected with the songs it champions, and the latest edition was no exception.

The festival is organized by Sanremo's city council and government-owned TV network Rai Uno, which broadcasts the event live from the Ariston Theater. Its central song contest, with publicly voted winners chosen on the final night, is credited with launching such internationally successful artists as Laura Pausini and Andrea Bocelli.

Sanremo's televisual appeal is boosted by performances from international stars—this year, including Norah Jones and the Scissor Sisters—and appearances by global celebrities.

But the regular storms that break over the event in the small northern Italian city usually involve money. In 2004, for example, a long-simmering dispute over expense payments owed to labels resulted in a Sanremo boycott by IFPI-affiliated trade body FIMI.

This year a media frenzy erupted over the fees paid to Sanremo's co-hosts, 70-year-old TV veteran Pippo Baudo and 30-year-old TV presenter/actress Michelle Hunziker. According to press reports, Hunziker was receiving a fee of €1 million ($1.33 million) from Rai, while Baudo—the festival's artistic director—would receive €750,000 ($998,000). Rai has not confirmed those figures, but label sources suggest they are accurate.

Attention centered on the payments' apparent flouting of Italy's so-called "austerity" budget in December 2006, which restricted "individual consultancy fees" paid by state-owned companies such as Rai to €250,000.

After a media debate between members of the government and opposition parties, minister for innovation and public function Luigi Nicolais issued a "circular"—effectively, a government decree—Feb. 22 exempting Sanremo from the restriction.

The episode drew mixed music industry reactions. FIMI president Enzo Mazza says, "Music almost appears to be marginal at Sanremo."

"Sadly, Sanremo is now a television event and not a musical one," adds Edel Italy president Paolo Franchini, who described the fees debate as "a political problem."

"I don't have a problem with presenters receiving a million euros," says La Falce, Universal Music Italy president/CEO until December 2005 and now owner of the Steamroller label. "When they are said to have helped generate TV advertising revenue in the region of €40 million [$53.2 million] for Rai."

The issue "is a matter between Rai and the presenters themselves," says Mario Limongelli, president of independent labels body PMI. "As record labels, our brief is the actual music itself."

This year, Rai claimed a peak viewing figure of 12.4 million on the final night, up from 10.9 million in 2006. La Falce says, "Baudo did a great job."

La Falce now runs his own independent label, Steamroller. His artist Al Bano finished second in the main song contest with "Nel Perdono," behind Ariola/Sony BMG's Simone Cristicchi with "Ti Regalerò una Rosa."

Sony BMG senior A&R director Rudy Zerbi says the company saw "an immediate sales effect from artists appearing at Sanremo, which hasn't been the case for quite a while." On FIMI's singles listing for the chart week covering Sanremo (which ran Feb. 27-March 3), Cristicchi entered at No. 5, behind another Sanremo song, Daniele Silvestri's "La Paranza" (Epic), at No. 2.

However, the day after the festival ended, it was back among the headlines amid reports that Rai Uno director Fabrizio Del Noce wanted Baudo replaced by 45-year-old TV presenter Paolo Bonolis. Baudo reacted furiously to the reports—which Del Noce has not denied—and the story ran for several days.

But La Falce merely attributes the constant controversy to Sanremo being "a popular national event—attended by 150 journalists who are desperate to create news stories."

"Actually," he adds, "this year's dispute was relatively lightweight."