CISAC Launches Sanctions Procedure Against SGAE

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Madrid, Spain 

The international body of authors rights societies action could result in the expulsion of the Spanish society

The International Confederation of Societies of Authors and Composers (CISAC) has launched a sanctions procedure against SGAE, the Spanish rights society, which could result in the expulsion of SGAE from the global organization.  

“CISAC’S Board of Directors, at its meeting on 4 December 2018, discussed the serious situation at SGAE and the society’s breaches of CISAC rules,” said a communication sent to Billboard by the global network of authors societies, a non-profit organization representing 238 societies in 181 countries, who in total manage the rights of the work of 4 million creators worldwide. “In view of SGAE’s failure to remedy these breaches, the Board decided to launch a sanctions procedure under CISAC’s Statutes.” 

SGAE responded to the news of the CISAC sanctions process through the organization's publicist, telling Billboard that “SGAE is totally willing to comply with the requirements of CISAC and the new Board of Directors has already let them know that.”

CISAC’s action is a follow-up to an investigation into questionable practices at SGAE earlier this year. In a 65-page report published last May, CISAC revealed "serious concerns" about SGAE's conflicts of interest, "distorted and inequitable distribution of royalties" and "lack of regard for the common good." The commissioned report included strong recommendations for SGAE to fix the shortcomings in its governance and distributions.

SGAE has been dogged by problems which have heated up since the summer of 2017, when Spanish agents again raided the organization’s Madrid headquarters, and arrested 18 people suspected of involvement in la rueda (“the wheel"), a royalty scam involving an unproportionate amount of music placed on little-watched late night television programs. According to police documents, the music habitually includes classical public-domain compositions by Mozart, Vivaldi and other composers that have been registered as copyrighted arrangements by participants in the scheme — not only in their own names but in the names of their mothers, children and even their dogs — to downplay the volume of their output. 

In another SGAE scandal, multinational publishing companies Warner/Chappell, peermusic and EMI Songs have threatened to pull their catalogues from SGAE after they were all ejected from the entity’s board.

In October, Eduardo “Teddy” Batista, the former longtime president of SGAE who is awaiting trial on charges of misappropriation of funds which authorities say cost the organization €20 million (almost $26 million), attempted to make a comeback at the organization by running for a seat on the board and a possible return to the presidency. In the end, Bautista did not get enough votes to bring him back to SGAE.

José Ángel Hevia, an Asturian musician who plays the gaita (a Spanish bagpipe), was elected president, taking the entity’s top job in November, elected by a new board that was appointed in elections that had a record low turnout.

According to an investigative report published by the Spanish newspaper El Mundo, Hevia himself has earned almost €2 million (almost $2.3 million) in royalties from late night television programs implicated in la rueda.

Spain’s Ministry of Culture has given SGAE authorities until Dec. 28 to make changes in its statutes, voting and distribution system, before requesting judicial intervention.

On Nov. 27, Spanish Congress passed Intellectual Property Law reforms that included measures specifying that rights societies cannot distribute more than 20% of each author’s earnings for the emission of their work in hours “without a significant audience,” a measure whose language specifically addressed la rueda.

The statement from SGAE in reposnse to CISAC's announcement assured that "...many of these requirements, like those affecting the norms of distribution, the naming of a Director General, the creation of an external supervising organ, the control of conflicting interests among members of the board and the request for greater transparency, are measures that have already been adopted in the first days of the new government of SGAE or which will be implemented in the statutes after a special general assembly on December 27.”

In the past, rights societies in India and Kenya have been expelled from CISAC. According to the international organization’s statement, the current sanction process Spanish Rights Society “could result in various sanctions and measures, including the expulsion of SGAE from CISAC.”