This one’s been a long time coming.
The General Assembly of CISAC, the International Confederation of Societies of Authors and Composers, has voted to expel Spanish collection society SGAE from its ranks for a full year.
The expulsion is the result of a sanction procedure brought against SGAE by CISAC at the end of last year, following complaints from publishers of ‘discriminatory treatment of rightsholders and unfair practices relating to the distribution of royalties’.
That’s a reference to a so-called ‘scam’ which has been dubbed ‘The Wheel’. It has seen music owned by certain SGAE members suspiciously played throughout the night on some Spanish TV channels – meaning the relevant rights-holders can lay claim to large chunks of performance royalty payouts.
These same SGAE members are often listed as the composers of these songs, with the relevant TV stations listed as publishers; the two parties then share in the subsequent royalties.
Millions of Euros are believed to have been paid out as a result of ‘The Wheel’. Reports suggest that this fraudulent income has previously counted for 70% of the money SGAE receives from TV channels, despite reaching barely 1% of the audience.
“Our repertoire… receives about 1% of the collection. It’s a joke,” said Santiago Menéndez Pidal, General Director of Warner/Chappell for Spain and Portugal, at the time.
CISAC presented a report containing recommendations for changes to SGAE’s ‘governance rules, statutes and royalty distribution practices’ in April 2018.
In December 2018, due to lack of progress by SGAE on CISAC’s requirements, the CISAC Board of Directors announced the opening of its sanction procedure.
CISAC says it is now expelling SGAE after an ‘in-depth analysis of reforms set in motion by SGAE’s new President’.
“CISAC welcomes the positive steps recently taken to improve the situation. However, it believes that the right path to a truly lasting solution is to ensure these reforms are completed, fully endorsed by SGAE’s assembly and meaningfully implemented by SGAE’s governing bodies.”
In a statement, CISAC said: “While a number of welcome changes have been proposed, they have not yet been approved by the SGAE General Assembly. Further important technical work and changes are needed and expected by CISAC to ensure SGAE’s compliance with the Confederation’s professional rules for member societies.”
It added: “CISAC welcomes the positive steps recently taken to improve the situation. However, it believes that the right path to a truly lasting solution is to ensure these reforms are completed, fully endorsed by SGAE’s assembly and meaningfully implemented by SGAE’s governing bodies. This will strengthen the position of SGAE’s management and convince Spanish rights holders and the international creative community of SGAE’s commitment to reform.
“CISAC recognises and welcomes the steps taken for SGAE over the last few months in order to improve the situation but believes that the right path to a truly lasting solution is to ensure the necessary reforms are completed, fully endorsed by SGAE’s assembly and meaningfully implemented by SGAE’s governing bodies. This will strengthen the position of SGAE’s management and convince the international community of SGAE’s commitment towards local and international creators.”
There is a lifeline for SGAE, however: the CISAC General Assembly has agreed that the sanction can be adjusted or lifted at any time, as soon as the CISAC Board of Directors concludes that enough progress has been made to implement CISAC’s requirements.
CISAC says it will continue to offer “full support” to SGAE’s management team “in the hope of being able to re-admit SGAE to the confederation as soon as possible”.Music Business Worldwide