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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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