Your average TV watcher likely missed it. It was, after all, the Grammys, a night of air kisses and warm thank-yous as the music industry turned out to celebrate all that was good about their business. Eminem and Lady Gaga entertained, and nearly 30 million Americans tuned in.

But folks in the radio business caught it, the snipe, and it came from National Association of Recording Arts and Sciences CEO Neil Portnow no less. He told the audience, “We will support the new broadcast services like satellite and internet radio that actually pay creators for their work.”

He made no mention of terrestrial radio.

In his backhanded way, Portnow was airing a beef that’s been simmering for some time between the radio and recording industries, disrupting what for many years was a harmonious and symbiotic relationship.

The beef is over the Performance Royalty Act, a bill introduced in Congress two years ago this month that would force radio stations to pay royalties to performers whose music they play, ending an exemption in the copyright laws that goes back to the very early days of radio.

Portnow’s jab came three days after reports that the bill, which seemed to have lost its steam, would likely be reintroduced in the Senate this year.

But for all the rancor on both sides of the issue, and there’s lots, what’s really at stake?

The answer is not nearly as much as you might think based on the heavy-handed comments coming from the two camps. 

If the act should pass, it would certainly be another cost burden for radio stations, but it would not drive stations out of business or in any other significant way alter the radio business. It would have no effect on how radio ad time is bought or sold.

In short, this is no Napster-sized issue. Both the radio and the music businesses are undergoing dramatic structural changes, but whether stations begin paying royalties to artists or not is not among them.

Here’s some background on the issue.

Under the current system, radio pays royalties to composers of songs played on the radio, roughly $600 million a year, but not to recording artists. The payments go to the three groups that represent composers: The American Society of Composers, Authors and Publishers (ASCAP), Broadcast Music Inc. (BMI) and SESAC.

So when a station plays “Yesterday” by Beatles Paul McCartney and John Lennon, who are listed as the song’s composers, that station must make payments to the group that represents McCartney and Lennon.

But it is not obligated to pay other group members, backup vocalists, studio musicians or engineers. So, for example, fellow Beatles Ringo Starr and George Harrison do not receive payment.

Similarly, the station is not required to pay artists who record a cover version of the song.

The rationale for this arrangement has long been that performing artists get a far more rewarding form of payment: free air time. Consumers hear the hits on radio and run off to the store to buy the records.

But with both the radio and record industries facing new competitive challenges and a weak economy, that symbiotic relationship has become strained. 

Radio’s exemption does not apply to mediums like satellite and internet radio, which currently pay royalties to composers and performers, and the record industry, led by the Recording Industry Association of America, argues radio should as well.

“The bottom line is that no recording artist should be forced to give up their work without consent or compensation,” says Tom Matzzie, a political strategist for musicFIRST, a coalition representing artists and record labels. “The musicFIRST Coalition will continue and expand our campaign until this fundamental unfairness is corrected.”

Representing radio is the National Association of Broadcasters, which argues the added fees will cause hardships for struggling broadcasters.

“We remain cautiously optimistic that Congress will ultimately reject RIAA's effort to enact this job-killing legislation, which would threaten the very future of a musician's greatest promotional vehicle: free, local radio,” said NAB Executive Vice President Dennis Wharton in a statement last fall.

But just how much would stations really end up paying, anyhow? It turns out not that much.

Last year the two parties attempted to negotiate a settlement.

While they never reached an agreement on payments, it appears they were close. The last offer from the NAB came out at about 1 percent of radio’s net revenues, or about $100 million, with a sliding scale based on each station’s individual revenue and dispensations for non-commercial licenses.

That’s about 15 percent of what the industry pays currently in royalties to composers, hardly the burden for broadcasters the NAB would have the world believe.

And while it would certainly be more money in the pockets of musicians, it’s unlikely to lead to a whole new crop of musicians being able to eke out a living without having to work side jobs. Breaking into the business will not become suddenly easier.

While the symbiotic relationship is strained, it still works pretty well, and likely will as long as there are radio stations with listeners and record labels with musicians anxious to have their music heard by the public.

Whether the existing legislation ever passes is hard to say, but at some point the two sides are likely to reach an agreement on their own, and little will be heard on the matter after that.