When I worked for a movie theater (sorry, theatre) long ago, we were only allowed to play ASCAP-licensed music before the film. Granted, this was last century before the never-ending commercials that were interrupted only to play the film.
The chain I worked for had negotiated a deal with ASCAP, so we were allowed to play their music. All the stuff we wanted to play by BMI was verboten. Too bad.
The reason why this was so was because people had to pay to get in, so ASCAP argued that the theater patron's experience was enhanced by the music.
Presumably, if we didn't charge admission, we wouldn't need a license, but that is wrong too: public performance is a copyright violation. Better keep the windows to your car rolled up with your rockin' the ipod on the boulevard, bub.
The artist might refund her cut, but how about the fees extracted by the many layers of middlemen?
One solution I could see is for the various gyms to put together a "discover the new artist" contests that included the right to play the entrants' music in the gyms, royalty free. Of course, no covers and no previously-signed bands. The winner gets whatever (maybe a "Best of the Iron Sweat Gym music" album on itunes, promoted at every gym) prize and the gyms get their music. The only losers are the PPCA, and rightfully so.