How The Organization Behind The Grammys Spends The Other 364 Days

Recording Academy President and CEO Neil Portnow, host LL Cool J and Executive Vice President of Specials, Music and Live Events at CBS Entertainment Jack Sussman pose at the Staples Center in Los Angeles on Jan. 23, a few days before the 2014 Grammy Awards. i i

Recording Academy President and CEO Neil Portnow, host LL Cool J and Executive Vice President of Specials, Music and Live Events at CBS Entertainment Jack Sussman pose at the Staples Center in Los Angeles on Jan. 23, a few days before the 2014 Grammy Awards. Kevin Winter/WireImage hide caption

itoggle caption Kevin Winter/WireImage
Recording Academy President and CEO Neil Portnow, host LL Cool J and Executive Vice President of Specials, Music and Live Events at CBS Entertainment Jack Sussman pose at the Staples Center in Los Angeles on Jan. 23, a few days before the 2014 Grammy Awards.

Recording Academy President and CEO Neil Portnow, host LL Cool J and Executive Vice President of Specials, Music and Live Events at CBS Entertainment Jack Sussman pose at the Staples Center in Los Angeles on Jan. 23, a few days before the 2014 Grammy Awards.

Kevin Winter/WireImage

This Sunday's Grammy Awards ceremony is the annual big-ticket item for the National Academy of Recording Arts and Sciences. More than 28 million people around the world tuned in to watch the concert show last year. And this year's telecast is once again being touted as the most complicated — and expensive — production on TV.

CBS has aired the Grammys for more than 40 years, and has an agreement with The Recording Academy to broadcast the live event annually until the year 2021. In its previous deal, CBS's licensing fee paid the Academy $20 million dollars every year for the telecast, and the current agreement is reportedly worth even more.

"It's the biggest music show in the world and it has to be fun, it has to be exciting and it has to be entertaining to the majority of the world, says host LL Cool J.

But some musicians and music lovers, like Bob Lefsetz, are underwhelmed. "It's irrelevant and there are so many categories," the online blogger and former music industry attorney says. "Who cares?"

Lefsetz complains that The Recording Academy is only concerned about the TV show. "The guy who runs it gets paid a fortune," he says. "Their No. 1 mission is to get paid. Their No. 2 mission is to put on a TV show that gets ratings."

"The Academy," as it's known, used to be called the National Academy of Recording Arts and Sciences — NARAS for short. It operates a number of 501 (c)(3) nonprofits. It's made up of 22,000 members ... musicians, singers, songwriters, producers and others in the industry. They pay $125 a year to belong, and, if they have enough credits on recordings, to vote in the Grammys.

President Neil Portnow says the Academy is a not-for-profit organization that gets donations and corporate sponsorship from the likes of AEG, Ford, Best Buy, Converse and Microsoft to run charities like MusiCares, which spends three and a half million dollars a year to help struggling musicians.

"You know, most musicians are not like the stars," Portnow says. "Most of them don't have health insurance or steady jobs. They go one gig to the next. That's the more basics, to the more severe and tragic, which is substance abuse addiction and recovery. So we are the major entity in the music industry that offers assistance and counseling."

In 2011 and 2012, the last year for which the Academy's tax records are available, the organization gave more than six hundred thousand dollars in grants for music research and to preserve and archive recordings. The organization lobbies state and federal lawmakers on such issues as illegal downloading and performance royalties.

And the Grammy Foundation offers scholarships, grants and opportunities for music education.

This week, 32 high school students from around the country are in Los Angeles for what's known as "Grammy camp." They're performing in a jazz combo, choir and big band for all the Grammy-related events, including a gig with Vampire Weekend. And they're gearing up to play at the Grammys afterparty on Sunday.

"I'm nervous, personally," says 17-year-old singer Cobly Ewatuya, from Dallas.

"I'm excited and anxious," says 17-year-old crooner Stephanie Henson from Des Moines.

"Oh my god, " says saxophonist Henry Solomon from Michigan. "We're playing for Bruno Mars, or Carrie Underwood or Jack Black. You're just like, wow!"

These students say it's the experience of their lives.

"They teach not only the music aspect, but how to give a good performance," Henson says.

"They treat us like professional musicians," Solomon adds.

The Recording Academy also runs the Latin Grammys and The Grammy Museum in downtown L.A. The four-story museum hosts private concerts and exhibitions that feature Michael Jackson's jackets, Jenni Rivera's gowns and interactive displays where visitors can play drums and sing along with a virtual Ringo Starr.

In 1959, the National Academy of Recording Arts and Sciences got its start when executives at four major record labels decided to start the awards show. Over the years, the organization was criticized for being out of touch — giving its first award to Alvin and the Chipmunks rather than Frank Sinatra. The Grammys ignored rock music until the 1970's, and in the '80s gave Jethro Tull the heavy metal award.

The list goes on.

But the biggest shake-up came in the early 2000s with the Academy's then- president, Michael Greene. At the time, Greene was the highest paid non-profit executive in the country. But he came under fire for his brash style and questionable finances. Pulitzer Prize-winning investigations found the Academy's charities saddled by high overhead. The Los Angeles Times reported the foundation spent less than 10 percent of every donated dollar on helping indigent, unemployed and infirm musicians. And critics saw red over Greene's $2 million-a-year salary, with bonuses and perks like a Mercedes sedan and an exclusive country club membership.

The IRS was called in to investigate all of this, but no charges were ever filed, as current president Neil Portnow points out. "The risk you take when leadership becomes an individual, and about a certain level of bravado," Portnow says. "Sometimes that invites scrutiny."

Greene ultimately resigned after sexual harassment allegations, but not without an $8 million parachute.

Portnow, the former head of Jive Records, was brought on to change the tone and perception of the Academy.

"Frankly, part of the reason I was chosen for the job is what I like to think a pretty pristine and positive image set of relationships in the industry, my demeanor, my temperament, my style," Portow says.

When asked what his salary is, he points to the Academy's income tax returns. They're hard to decipher, but the last return posted by the Academy shows Portnow earned a million and a half dollars in fiscal year 2012. He will not say what the Academy spends staging the Grammy Awards telecast, or how much of the $20 million it gets from CBS every year goes to grants and services.

But Charity Navigator, which evaluates non-profits, rates the Academy's efforts pretty close to those of other charities. And critic Bob Lefsetz says he doesn't have anything negative to say about the Academy's charity efforts.

"It's a very tightly controlled organization, but there isn't a smoking gun here; there's nothing hidden," Lefsetz says. "They are raising money and, now more than ever, they are giving a higher percentage away. Those who deserve money, are they aware of the program? Some people are benefiting — it's just a limited thing. But for somebody that puts on an international television show, I don't believe their footprint in charitable efforts is commensurate."

This Sunday's Grammy Awards show is expected to be one of the most highly rated TV specials of the year. And the head of the Recording Academy is no longer the highest paid non-profit executive in the country.

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