SGAE was temporarily kicked out of CISAC in May 2019 as a result of what the latter org calls a “violation of the international confederation’s rules, discriminatory treatment of rights holders and irregularities in its royalties distributions”.
CISAC states that its Board of Directors have now decided to re-admit SGAE after, what it describes in an official release as, “a thorough review of all changes in the society’s practices that have been implemented with the support of CISAC over the last three years”.
A sanction procedure brought against SGAE by CISAC took place at the end of 2018, following complaints from music publishers of ‘discriminatory treatment of rightsholders and unfair practices relating to the distribution of royalties’.
Those ‘unfair practices’ referred to a so-called ‘scam’ nicknamed ‘The Wheel’, which saw music owned by certain SGAE members suspiciously played throughout the night on some Spanish TV channels, with the relevant rights-holders then able to lay claim to the associated performance royalties.
Those same SGAE members were often listed as the composers of these songs and the relevant TV stations listed as publishers; with the two parties then sharing in the subsequent royalties.
Millions of Euros were believed to have been paid out as a result of the scam and in mid- 2018, in protest against ‘The Wheel’, the three major publishers, in addition to peermusic, requested to pull their catalogs from SGAE.
Prior to SGAE’s expulsion, CISAC reviewed the Spanish society’s operations and produced a report which set out a package of reforms that it was required to implement in order to be readmitted to CISAC.
CISAC reports that its Board agreed at its meeting today (March 10) that its “mission was to reform SGAE’s governance and push for revision of the distribution rules, and these have been achieved”.
The reforms that have now prompted SGAE’s readmission include:
- Ending discriminatory practices in electing Board and Supervisory Board members
- Carrying out new elections to the Board of Directors and restoring the representation of all affiliated rightsholders in the society’s management bodies
- Introducing a new Code of Conduct to address conflicts of interest
- Changes to the weights of different categories of music, and the separation of music and audiovisual pools
- A maximum 20% cap on royalties paid for music that is broadcast during night time in accordance with the law
- Development of a technology project to address the distortions in royalty calculations caused by inaudible music in usage reports
“The reforms implemented should help SGAE better serve its members and international partners, and drive recovery in collections after the deep crisis caused by the pandemic.”
Gadi Oron and Marcelo Castello Branco, CISAC
In a joint statement, CISAC Director-General Gadi Oron and Board Chairman Marcelo Castello Branco, said: “CISAC has worked for over three years to monitor, support and evaluate SGAE’s transformation into a society that is compliant with international standards.
“This has been a complex task of utmost importance both to CISAC members, who depend on the integrity of the collective management system internationally, and to Spanish creators and rights holders who deserve a well-functioning and reliable society.
“The reforms implemented should help SGAE better serve its members and international partners, and drive recovery in collections after the deep crisis caused by the pandemic.”Music Business Worldwide