Global Music Publishers Threaten to Leave Spanish Royalty Collecting Society

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Madrid, Spain

Warner/Chappell, Peermusic, Sony/ATV, Universal Music Publishing Group and BMG could look for other options to manage their authors’ royalties in 2019.

Multinational publishers Warner/Chappell, Peermusic, Sony/ATV, Universal Publishing and BMG could leave SGAE as early as January 1, 2019. The companies have informed the authors rights' society of their intention in separate letters last Friday (June 29), according to Spanish media reports. The publishers are required to give SGAE six months notice that they will not renew their contracts.

The publishers' catalogues, which of course include major international artists who sing in English like Beyonce, the Rolling Stones and Bruce Springsteen, as well as Latin superstars, make up some 60% of the total 246 million euros in royalties collected by SGAE last year, with television and radio royalties alone for artists and composers signed to multinational publishers amounting to almost 30 million euros last year. At least 80% of music on Spanish radio is by American or British artists, according to SGAE President José Miguel Fernandez Sastron.

As reported by Billboard on June 28, multinational publishers have been fiercely battling with SGAE since late last year, when Warner/Chapell, together with Peer Music and EMI Songs, were ejected from the SGAE board of directors for surpassing term limits, a decision the publishers contest. This past May, a Madrid court rejected an appeal from the multinationals, ruling they not return to the board ever because they “could not be clients and businesses at the same time.”      

Rafael Aguilar, the president of Peermusic Spain, told Billboard in an interview last month that Sastrón was playing with fire by campaigning against the multinationals at the dawn of a new competitive era for rights collection in Spain, thanks to an EU rights management directive and new Spanish law which allows for competition in the rights collection marketplace.  The first private collective rights management entity in the Spanish market, Unison, debuted in January 2018.     

“The removal of the Anglo-American repertory from SGAE is collateral damage that they are not measuring,” Aguilar told Billboard.

Aguilar added that a threat to the long-established entity also exists from unhappy owners of music in Spanish: “The rights of ‘Despacito’ are not represented by a Spanish publisher.” He warned that the potential exodus of authors with important catalogues would signal a “kind of a self-destruction of SGAE.”

The international publishers were replaced on the board by representatives of publishers owned or affiliated with Spanish television stations involved in a scheme widely known as La Rueda (“the wheel”). In an interview with Billboard, Warner/Chappell Spain President Santiago Menendez-Pidal described those actions by SGAE’s current administration as “Corrupt.”