CISAC votes the temporary expulsion of Spain's SGAE

By Emmanuel Legrand

SGAE has been given a year to clean up its act by the International Confederation of Societies of Authors and Composers. CISAC has decided to temporarily expel the Spanish music rights society during its general assembly in Tokyo on May 30. The decision was motivated by the inability from SGAE to implement CISAC’s requirements on governance rules, statutes and unfair royalty distribution practices.

  CISAC's Director General Gadi Oron said in his opening speech at the organisation's annual gathering that the measure regarding SGAE was a "deeply regrettable step. Particularly because SGAE is one of our most important societies and one of CISAC’s founding members. But our responsibility to our members globally, and to the integrity and image of the collective management system, mean that we have no choice."

  Oron said the measure was meant to be temporary, providing the society addressed the issues at stake. "We hope that all the concerns our community has will be addressed, and that SGAE will be readmitted in the coming months," said Oron.

A commitment to reform

  In a statement, CISAC noted that while "a number of welcome changes have been proposed by the current leadership, they have not yet been approved by the SGAE General Assembly." It added that "further important technical work and changes are needed and expected" by CISAC to ensure SGAE’s compliance with the Confederation’s professional rules for member societies.

  CISAC "believes that the right path to a truly lasting solution is to ensure these reforms are completed, fully endorsed by SGAE’s assembly and meaningfully implemented by SGAE’s governing bodies. This will strengthen the position of SGAE’s management and convince Spanish rights holders and the international creative community of SGAE’s commitment to reform." 

   SGAE's general assembly will take place on June 24 in Madrid and the society said it will address the situation created by CISAC's decision and put forward a series of reforms. "CISAC gives us the opportunity to decide about our future," said SGAE President PilarJurado in a statement. SGAE said that although it was expelled from SGAE, CISAC's decision was "a vote of confidence" regarding all the reforms that will be proposed to the vote at the June 24 gathering.

Call to ratify the new Statutes

  Among the measures proposed for ratification at SGAE's General Assembly are the modification of its Statutes to comply with the European Directive on collective management, the creation of an independent Supervisory Commission that will assume control of the governing bodies, and the development of the electronic vote for the assemblies and the different electoral processes. "I call for our members to ratify at the next General Assembly the changes introduced to meet the demands of CISAC, and leave this situation behind," said Jurado.

  However, Spanish daily El Periodico, noted that "with the board of directors totally divided, there is nothing to suggest that the new statutes will be approved on the 24th and that would require a call for new elections." Some like Antonio Onetti, vice president of SGAE's Audiovisual chapter called for Jurado to resign, while former President José Miguel Fernández Sastrón said SGAE's full board of directors should resign. 

  The crisis at SGAE stems from the scandal known as "La Rueda" (The Wheel), which saw some SGAE executives and a handful of local music publishers claim royalties on music played during late night TV programmes. In addition, several international music publishers such as peermusic or Warner/Chappell complained that SGAE had excluded them from the board, which led the International Confederation of Music Publishers (ICMP) to file with CISAC an official complaint in March 2018, requesting the Spanish society to comply with governance requirements. Leading publishers also threatened to leave SGAE if changes did not take place.

Leadership changes at SGAE

  Following an investigation into SGAE's practices, which raised "serious concerns", the board of CISAC asked SGAE in May 2018 to implement drastic reforms, including the immediate re-instatement of the expelled publishers. In December 2018, considering that SGAE had not complied with the requests, and noting that there was "no progress," CISAC put the society on notice and started sanction procedures, which led to the latest decision from the general assembly to expel SGAE.

  In parallel, SGAE went through significant leadership changes. In December 2018, SGAE President, songwriter José Miguel Fernández Sastrón, who led the society between April 2016 to October 2018, and whose presidency was marred by "La Rueda," was replaced by composer and bagpipe player José Ángel Hevia as the 41st president of SGAE for a four-year mandate. Hevia only served for three months before being replaced by Pilar Jurado as president in March 2019.

  Oron acknowledged in his speech that the situation around SGAE "has engaged CISAC in an unprecedented way." He elaborated: "Throughout this evolving crisis, we adopted a careful and balanced approach. We have offered support to the society and, at the same time, made sure that we maintain the integrity of our global community. This has been a complex and highly visible crisis – with implications for creators and for the reputation of collective management – far beyond Spain."

  Oron said SGAE could follow the example of India's society IPRS, which was expelled from CISAC two years ago and has now been re-admitted. "We helped to change the statutes of the society, their distribution rules and we helped in many other aspects," said Oron in his speech. "The turnaround that was achieved enabled the society’s readmission to CISAC. This is a real success story and we are very happy that IPRS representatives are with us here today. This success reflects our approach and our objective – to assist underperforming societies, to support, to reform and restore confidence in them."