Business News Labels & Publishers Top Stories

CISAC readmits Spanish collecting society SGAE

By | Published on Thursday 11 March 2021

SGAE logo

The often controversial Spanish collecting society SGAE has been readmitted into global grouping CISAC nearly two years after it was temporarily expelled. The latter’s board decided to allow the former back into the club because of “a series of reforms that have transformed the society and its operations”.

There have been an assortment of controversies involving the Spanish song rights society over the years with dramatic police raids, corruption allegations aplenty and a sneaky little scam dubbed ‘the wheel’ which involved the redirection of TV royalties to certain SGAE members.

Those controversies unsurprisingly resulted in mounting criticisms of SGAE by both its own writer and publisher members, and also other societies around the world and global music publishers, all of which traditionally relied on the society to represent their catalogues in the Spanish market.

The global publishers became increasingly vocal with their criticism in 2018 after their Spanish reps were locked out of a SGAE board meeting. Many of those publishers started to look for alternative ways to license their catalogues in Spain, while also putting pressure on CISAC to take action against its rogue member.

Responding to those calls, CISAC made a number of recommendations for reforms that SGAE should make. When those reforms failed to be made, the global grouping threatened sanctions against its Spanish member. That ultimately led to SGAE’s expulsion from CISAC in May 2019.

SGAE’s leadership was also under pressure from the Spanish government to overhaul its governance and deal with the allegations of corruption. Meanwhile, it also faced new competition in the market place from a new society called Unison, offering writers and publishers another alternative for licensing their rights within the Spanish market. And around about the same time as it was expelled from CISAC, SGAE was fined by the Spanish competition regulator for anti-competitive conduct.

Despite all that, internal politics within the society’s membership meant that much-needed reforms continued to be resisted for some time. However, announcing the readmission of SGAE yesterday, CISAC said that significant changes were now underway at the Spanish society.

Among them: “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 rights-holders in the society’s management bodies; and introducing a new code of conduct to address conflicts of interest”.

In relation to the controversies around how broadcast royalties are distributed – and the alleged scams in that domain – there will be “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; and development of a technology project to address the distortions in royalty calculations caused by inaudible music in usage reports”.

Confirming SGAE’s readmission, CISAC’s Director-General Gadi Oron and board Chairman Marcelo Castello Branco said in a joint statement: “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”, they added. “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”.

Those publishers who were most critical of SGAE in 2018 will be following all of those reforms very closely indeed. While the various developments that have enabled the readmission of SGAE into CISAC will all be welcomed by the publishers, most likely see this very much as a work in progress, with plenty more still to be done.