Deadlock at SGAE as general assembly fails to vote in favour of reform proposals

by Emmanuel Legrand

SGAE's crisis reached a tipping point after the struggling Spanish rights society's general assembly failed to endorse on June 24 the proposed changes to its statutes that would have made the organisation compliant with European Union regulations and in conformity with the requirements asked by the International Confederation of Societies of Authors and Composers (CISAC).

  Members of SGAE participating in the AGM did not deliver the votes necessary to ratify the changes proposed by proposed by SGAE President Pilar Jurado, who was elected in February 2019. SGAE said there were 24.691 voters who took part in the process, with 15,502 (62,8%) who supported the changes, 8,907 (36%) who voted against and 282 (1,1%) who abstained. The reforms and changes in statutes required a qualified majority of 66.6% to be adopted.
 

  The negative vote seems to have come mostly from SGAE's Madrid representatives as regional assemblies voting on the new statutes in the week before the June 24 assembly have backed the proposals put forward by SGAE's management with an 86% approval of the proposed text. (The same assembly voted in favour of the accounts presented by the leadership by a 59.6% majority. SGAE collected €1314.4 million in 2017, up 18.2% over 2016, and distributed €302.2m.)

Finding solutions

  SGAE was temporarily expelled by CISAC at the organisation's AGM at the end of May, and the June 24 meeting was seen as the last opportunity for SGAE to adopt reforms that would keep the Spanish government at bay and start a process that would have seen the society comply with the requirements contained in the CRM Directive and CISAC's demands.

  The lack of majority in favour of the reforms puts SGAE to a situation that could require the intervention of the Spanish government. Minister of Culture José Guirao had previously said that failure to makes changes could trigger the need to put SGAE under government supervision, or have its administrative license being revoked. Following the vote from the assembly, the Ministry of Culture urged the various stakeholders to find a solution.
 

  On June 25, Jurado to invited music publishers and authors to "start a dialogue with SGAE on the reforms needed to take the society out of its current situation." SGAE said it reached out to Juan Ignacio Alonso, from Sony/ATV and Santiago Menéndez Pidal, from Warner Chapel (sic) to join the "dialogue table."

Coordinated action

  In a June 27 statement, SGAE said that Jurado had "hoped that the joint dialogue with stakeholders that form a blocking minority to the resolution of the approval of the new statutes, which have the support of most of the authors, would have come to fruition." The statement continues: "Unfortunately, multinational publishers have been trying to pressure the entity in many ways for a long time so that the entire author community gave in to its claims."
 

  SGAE doubled down on June 28 by accusing the music publishing affiliates of multinational companies of conducting "a coordinated action" to "pressure" authors to leave SGAE. "This mouvement organised by multinational companies Warner, Sony, Universal, BMG and Peermusic, regrouped in the Professional Organisation of Music Publishers (OPEM), has been supported by some of the authors of the entity, who are subject to the position of power that these large companies exercise, contractually, on the market," said SGAE. According to news agency EFE, some 100 authors are understood to have expressed the desire to leave SGAE.