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SGAE members vote against reforms demanded by CISAC and Spanish government

By | Published on Tuesday 25 June 2019

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Members of the always controversial Spanish collecting society SGAE have voted against a set of reforms designed to placate the country’s culture ministry and the global collective licensing community.

Pressure has been piling on SGAE for some time, of course, in response to allegations of incompetence, bad governance and outright corruption, most recently regarding the distribution of TV royalties.

The global music publishers, who traditionally rely on SGAE to license their rights to large groups of licensees in the Spanish market, became increasingly vocal in their criticism of the organisation in 2017. They subsequently called on the global body for song right collecting societies – CISAC – to take action, while adding that they were now looking into alternative licensing options in Spain.

CISAC then made a number of recommendations for reforms at SGAE to deal with the criticisms, and later stated that if the Spanish society didn’t implement those reforms sanctions could follow. It then made good on that threat last month, suspending SGAE’s membership of SGAE for a year.

At the time, CISAC chief Gadi Oron said of the expulsion: “This regrettable step is the culmination of a crisis that has harmed Spain’s hard-working musicians, songwriters and music publishers for many years. It is a story of unfair distribution practices, discriminatory treatment of rightsholders, conflicts of interest and governance weaknesses”.

He added that in the weeks running up to CISAC’s annual General Assembly, where the decision to expel SGAE was made, the Spanish society’s new President, Pilar Jurado, “took some encouraging steps to start addressing CISAC’s requirements. These were highly publicised, but they were, in reality, not enough. Also, there was and continues to be doubt as to whether the SGAE assembly which meets on 24 Jun will support these reforms, as previous attempts to pass reforms were rejected when the decisive moment arrived”.

Those doubts were justified. According to El Pais, only 1356 of the 18,000 SGAE members with voting rights took part in the vote on Jurado’s proposals to reform the society in line with CISAC’s demands. Of those who voted, 62.78% supported the reforms, but under the organisation’s constitution a two thirds majority was required.

While the result means a quick readmission into CISAC is now unlikely, in the short term SGAE management will be more bothered about the Spanish government’s next move. Like CISAC and the global music publishing community, the country’s culture ministry has been demanding reforms at the collecting society. It has been empowered in this regard by the European laws on collective rights management that were passed at an EU level in 2014.

The culture ministry has been pursuing legal action in a bid to force reforms and could go as far as seeking to withdraw SGAE’s licence to operate as a collective management organisation in Spain entirely.

A rival society has already been established in the country called Unison, which was behind the recent complaint to Spain’s competition regulator that resulted in SGAE being 2.95 million euros. The longer the SGAE membership resists reforms, the more likely it is that major writers and publishers will seek alternative options for licensing their works in Spain, and the greater the risk becomes of the 120 year old society disappearing altogether.