Monday, April 20, 2020

SGAE President Pilar Jurado pushed out in boardroom coup

By Emmanuel Legrand

The SGAE saga has now more episodes and twists than a Latin American telenovela. The latest development has seen the board of directors of the Spanish rights society voting to replace its President Pilar Jurado with playwright Fermín Cabal, who will be acting president of the Spanish Society of Authors and Publishers until a new election is called. Jurado has been in the position for about 14 months.

  During an extraordinary board of directors called April 15 by the society's general secretary, Eduardo Ezpondaburu, Cabal was elected by 22 votes in favour and 13 for the soprano and orchestra composer and conductor. Jurado had been in the job since February 2019 when she took over following a vote a defiance against the then President Hevia. The April 15 vote followed a motion of censure against Jurado presented on April 13 by 22 of the 35 members of the board of directors.

  As established by the SGAE bylaws, the oldest vice president, in this case Cabral, becomes the President for a maximum period of one month until the Board of Directors appoints the President of the organisation from among its members. The 35-member Board of Directors has representatives from the four main chapters: Major Rights, Minor Rights, Audiovisual and Publishers, each one of which hold a vice presidency.

Address all the challenges

  Paris-based CISAC (the International Confederation of Societies of Authors and Composers) suspended SGAE's membership to the organisation in May 2019, requesting urgent changes to its statutes and its operational practices.  

  At the meeting held April 15, the Board of Directors "expressed its will to unite and collaborate in this new stage with the Ministry of Culture and CISAC to find solutions to all the issues affecting the organisation and successfully address all the challenges facing intellectual property in the current situation," according to a SGAE statement.

  The Board also thanked Jurado "for her service during her tenure as president and wishes her every success both in her personal and her professional endeavours."

Failure to report new appointments

  According to Spanish daily Diario Publico, what led to Jurado's downfall was the recent appointment of Clifton Williams López as deputy director general of SGAE and Enrique Soria García-Ramos as economic and financial director. 

  These appointments where questioned by the Ministry of Culture, whose director general for Cultural Industries, Intellectual Property and Cooperation, Adriana Moscoso, pointed out that the society "can neither modify the organisational chart of the entity, nor hire new management personnel" without receiving notification from the Ministry to proceed. Jurado failed to inform the Ministry of the changes despite having to do so before their appointment.

  Newspaper ABC also suggested that the Board of Directors of the entity gave the go-ahead in early April to the distribution of some advance payments on rights whose beneficiaries appear to be...members of the board themselves. This would also contravene instructions from the Ministry of Culture.

Not sufficient remedies

  CISAC is understood to have sent a letter to SGAE's board on April 9 outlining a series of shortcomings from the rights society. The letter, seen by this writerstated that while CISAC was "encouraged to hear about the adoption of new Statutes on January 30th by SGAE’s General Assembly," they "have not been sufficient to remedy many of the issues highlighted by CISAC as violating the Confederation's Professional Rulest."

  In the letter, CISAC Director General Gadi Oron highlighted a series of pending issues to be resolved, including insufficient progress in governance and in documentation and distribution.

  On the governance aspect, CISAC's analysis is that "several new provisions introduced in the Statutes raise new concerns. We refer specifically to new rules on the eligibility of members to serve on SGAE’s Board of Directors and Supervisory Board." CISAC points out two issues: "Members who have withdrawn part of their rights from SGAE are not eligible to join the Board of Director" and "internal members of the Supervisory Board must be former Board members." 

Flawed decision-making processes

  Oron also addressed an "inherently flawed" decision-making processes at SGAE, in particular the exclusion of music publishers from fair representation in governance structures, and the "large number of people who are in a conflict of interest and serve on SGAE’s decision-making bodies." For CISAC, "many decisions are effectively taken by a small group of people who are not sufficiently representative of the interests managed by SGAE. This raises serious concerns with respect to the credibility of such decisions." 

  CISAC offered a way out: “The only viable solution to this ongoing situation is to conduct full Board elections as soon as possible, in order to establish a fair and balanced representation of the various categories of rights holders, in accordance with Spanish Law, and to restore the trust of the international community."

  On the documentation/distribution side, CISAC welcomed the start of a partnership with BMAT to monitor music use on TV, but "other measures taken by SGAE are insufficiently convincing and should have gone further."

A fully reappointed board

  CISAC said it asked "for a revision of genre weightings and coefficients to eliminate significant imbalances in distribution results," but even if weighting of symphonic music and video clips has been reduced, the Confederation has "not been provided with a clear analysis of how it will impact distribution and ensure a fair distribution, without abusing other works categories."

  In addition, CISAC is asking for the establishment of "a separate Dawn Time slot Distribution Pool with a maximum of 15% of royalties paid to the works exploited during that period" and asked for "the distribution cap issue to be addressed again as soon as full elections have taken place."

  Finally, CISAC asked for "the creation of separate Music and AV Distribution Pools to enhance distribution transparency and also to reflect different tariffs applied for the repertoires," and also suggested that "such a decision should have been formally discussed by a fully reappointed Board before being eventually submitted to the GA, to ensure approval by all categories of right holders."

  Oron concluded that "there remains a lot to do in order to bring SGAE into compliance with CISAC’s Professional Rules and to address the Confederation’s key Governance and Distribution recommendations of April 2018, in a manner that would justify a recommendation that  SGAE be re-admitted to the Confederation."

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