SA’s Samro ‘loses $3m’ in aborted UAE tie-up
South African performance rights organisation (PRO) Samro has pulled out of a multimillion-dollar investment partnership with a mooted counterpart in the UAE, the Arab Emirates Music Rights Organisation (AEMRO), opting to “cut its losses” after its board ruled the deal was unprofitable.
AEMRO was established in 2015, with Samro (Southern African Music Rights Organisation) holding an 80% share in the new organisation. Samro at the time said the establishment of a new PRO in the Emirati market was “in line with [its] strategic growth priorities”, identifying a potential return on investment of more than R1bn ($71m).
However, in an extraordinary general meeting in Johannesburg on 27 October, Samro members were told the deal was being axed, with the organisation blaming difficult economic conditions and a lack of official recognition of AEMRO in the UAE: AEMRO applied to become a member of the International Confederation of Societies of Authors and Composers (Cisac) in 2016, but was reportedly rebuffed as it was not licensed to operate in the UAE.
“Although at another period in time this type of investment could have yielded great financial rewards, the board has decided to cut its losses”
“Samro has decided to terminate its investment in the UAE,” reads a statement from the PRO. “Although at another period in time this type of investment could have yielded great financial rewards, the board has decided to cut its losses in the interest of Samro members and focus on strengthening its southern African and African operations for now.
“This investment was made after due consideration at the time, but developments in the UAE with our global partner collective management organisations, coupled with an adverse economic environment in South Africa, has heightened the risks. Hence, in the interest of Samro members, Samro has decided to terminate this venture.”
According to City Press, Samro lost nearly R40m (US$2.9m) on the AEMRO venture.
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