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CISAC readies sanctions against SGAE

Cisac – the association representing the world’s copyright collection societies – has announced plans to impose sanctions against SGAE, amid continued alleged rule-breaking by its rogue member from Spain.

At a meeting of its board of directors yesterday (4 December), Cisac (the International Confederation of Societies of Authors and Composers) resolved to initiate its sanctions process against SGAE, which could result in the Spanish society’s expulsion.

“Cisac’s board of directors, at its meeting of 4 December 2018, discussed the serious situation at SGAE and the society’s breaches of Cisac rules,” reads a statement from the association. “In view of SGAE’s failure to remedy these breaches, the board decided to launch a sanctions procedure under Cisac’s statutes.

“This procedure could result in various sanctions and measures, including the expulsion of SGAE from Cisac.”

SGAE (Sociedad General de Autores y Editores) has been embroiled in controversy since June 2017, when police raided its offices in search of documentation relating to an alleged scam dubbed ‘the wheel’ (‘la rueda’), in which SGAE members and TV execs allegedly conspired to create “low-quality music” – often reworked versions of songs in the public domain – then broadcast on late-night TV, generating performance royalties collected by SGAE.

SGAE maintains it is “totally willing to comply” with Cisac’s recommendations

Royalties from music licensed under la rueda account for around 70% of monies collected by SGAE from television, despite reaching only around 1% of the TV audience, according to Spanish paper El País.

In July, four of the five big music publishers – Warner/Chappell, Sony/ATV, Universal Music Publishing and BMG – along with the smaller, US-based Peermusic, wrote to the society requesting to pull their international catalogues, which include the likes of Bruce Springsteen, the Rolling Stones, Radiohead, Lady Gaga, Beyoncé and Enrique Iglesias, collectively comprising almost 60% of broadcast collections in Spain, from SGAE.

In a 65-page report published in May, Cisac found “serious concerns” relating to “distorted and inequitable distribution of royalties” at SGAE, and ordered the society to overhaul the way it does business.

While SGAE maintains it is “totally willing to comply” with Cisac’s recommendations – including the appointment of a new director-general (Gerardo Rodríguez, hired last month) and the creation of an external monitoring body, the association says SGAE has failed to fix its shortcomings. A final ruling is scheduled for Cisac’s annual general meeting in May 2019.

 


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Major publishers to pull catalogues from embattled SGAE

Four of the big five international music publishers have taken the first steps towards severing their ties with SGAE, as the fall-out from the alleged ‘wheel’ scam continues to plague the controversial Spanish collection society.

Warner/Chappell, Sony/ATV, Universal Music Publishing and BMG, along with US-based indie Peermusic, have each written to SGAE requesting to pull their international catalogues, which include the likes of Bruce Springsteen, the Rolling Stones, Radiohead, Lady Gaga, Beyoncé and Enrique Iglesias, collectively comprising almost 60% of broadcast collections in Spain – according to leading daily El País.

SGAE (Sociedad General de Autores y Editores) has been embroiled in controversy since June 2017, when police raided its offices in search of documentation relating to an alleged scam dubbed ‘the wheel’ (‘la rueda’), in which SGAE members and TV execs allegedly conspired to create “low-quality music” – often reworked versions of songs in the public domain – that was then broadcast on late-night TV, generating performance royalties collected by SGAE.

Royalties from music licensed under la rueda account for around 70% of monies collected by SGAE from television, despite reaching only around 1% of the TV audience, says the paper. “Our repertoire, however, receives about 1%,” says Santiago Menéndez Pidal of Warner/Chappell Spain and Portugal. “It’s a joke.”

Publishers’ association ICMP warned last month that, despite having being reprimanded by the international publishing community and a World Intellectual Property Organisation (WIPO) arbitration panel, SGAE continues to operate a version of the alleged scam.

“We need the people who have brought corruption to this house gone”

When the purported scheme first came to light, SGAE said it had introduced measures to address the ‘wheel’. However, ICMP suggested the society never intended to eliminate the scheme completely, and a Spanish court has since rejected the WIPO panel’s decision (which would have restricted the percentage of ‘wheel’ music on TV to 20%) entirely.

An ICMP source said, pending a wholesale “revision of the society’s governing structure”, publishers may be forced to seek “alternative licensing options in order to protect their repertoire in Spain.”

In identical letters sent to SGAE last Friday, the five publishers accuse the organisation of “mistreating” their international/‘Anglo-Saxon’ repertoire, and lay out their intention to take their catalogues elsewhere.

According to El País’s sources, the most likely destination for those rights would be a “well-known Italian entity”, with public performance and live/popular music royalties set to follow as part of a period of “decolonisation” of all rights currently administered by SGAE, starting in January 2019.

“For us to stay [with SGAE], we need the people who have brought corruption to this house gone,” says Rafael Aguilar, Peermusic’s regional president. “Fire the president, José Miguel Fernández Sastrón, and ensure that real musicians are represented in the [SGAE] governing body – not the wheel.”

SGAE did not respond to a request for comment.

 


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Artists urge sweeping changes at “fraudulent” SGAE

More than 150 Spanish musicians have signed an open letter calling for government action against SGAE, as controversy continues to rage over alleged corruption at the beleaguered collection society.

In a manifesto titled En defensa de nuestros derechos (In defence of our rights), the signatories – who comprise dozens of major local artists, including Alejandro Sanz, Pablo Alborán, Antonio Orozco, Dani Martín, Malú, Juanes, Bebe, Fito and Los Ilegales – urge the ministry of culture to prevent SGAE being used as a “fraudulent instrument” (“instrumento fraudulento”) against songwriters, with many also calling for the society to be shut down and re-founded under new management.

SGAE (Sociedad General de Autores y Editores) was brought into disrepute in June when police raided its offices in search of documentation relating to an alleged scam dubbed ‘the wheel’ (la rueda), in which SGAE members and TV execs allegedly conspired to create “low-quality music” – often reworked versions of songs in the public domain – which was then broadcast on late-night TV, generating performance royalties collected by SGAE.

18 arrested in raid on Spanish PRO SGAE

“We request authorities and the ministry of culture to act against the bad practices, taking into account their obligation to regulate the SGAE,” reads the letter, seen by El País.

Among the signatories’ demands for a ‘new’ SGAE are the “equitable and proportional allocation of rights” in line with to the contributions of each songwriter/author; an “urgent reform”, in the wake of la rueda, of the distribution of royalties from television; a reform in authors’ representation at the society, including extending the right to vote to a greater number of members; and a code of conduct to promote transparency and best practice.

Some artists and associations have also reportedly approached law firm MA Abogados for legal advice as to the return of monies “allegedly defrauded” by SGAE.

 


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