Promoters To Get Rate Cut

The National Commission of the Markets and Competition has fined royalty collection agency SGAE euro 3.1 million ($3.9 million) and ordered it to take no longer than three months to stop charging 10 percent of the gross box office for concerts and other music events. It also ordered the Office of Competition to oversee the fulfillment of the ruling.

However APM, the Spanish promoters’ association, originally brought the case against SGAE (or Sociedad General de Autores y Editores) – Spain’s biggest collection agency – in 2005, and most of the major promoters expect the matter will rumble on for a few more years.

“We don’t know what will happen in future as SGAE will appeal the ruling, so I guess it will take at least another year, or even more, to see changes,” said Doctor Music chief Neo Sala. “What we feel is that SGAE should not be higher than the rate in the country of origin of a composer/performer. So if the composer/performer is from UK, the rate for his or her concerts in Spain should be a maximum of 3 percent, as it is in the UK.”

The promoters’ original case was at first thrown out by Spain’s Defence of Competition Service, a decision that was ratified by the Court for the Defence of Competition when the promoters appealed. Sala and his fellow promoters expect a further appeal from SGAE.

The SGAE itself has had a chequered recent history. In 2011 civil guard officers raided its headquarters at Palacio de Longoria in Madrid, looking for evidence of large-scale corruption. Nine people were arrested and charged with embezzlement, fraud and gross misadministration over a racket that allegedly diverted large sums from SGAE to private firms controlled by executives from the collecting society.

Between 2003 and 2009 these firms appear to have received euro 26.4 million ($31.1 million) from SGAE’s digital unit. The fraud’s still being investigated by the Anticorruption Attorney’s Office.