Australian collection agency row

Tensions occasionally occur between agencies tasked to collect money for the use of copyrighted work and the artists they represent based on the manner in which these monies are distributed, and the cut the agencies allocate to themselves.

A major row on this delicate matter has erupted in Australia, according to a report in The Australian.

The Copyright Agency Limited (CAL), founded in 1989, is the Australian agency that collects money from institutions using copyrighted works. The newspaper alleged that CAL had paid itself more in salaries than it allocated to its authors and artists.

But the collection agency last year paid $9.4 million in salaries, compared with a $9.1m direct allocation for authors and artists.

Among the highest paid at CAL was its chief executive Jim Alexander, who earned more than $350,000 last year, while another senior staff member earned between $250,000 and $299,000, another between $200,000 and 249,000, and five others between $150,000 and $199,000. A further 21 staff earned between $100,000 and $149,000.

In addition, the agency spent more than $300,000 on travel for its top executives, including a trip for its three senior executives to an International Federation of Reproduction Rights Organisations conference in Barbados, and a trip for four employees and board members to the Beijing Writers Festival.

CAL responded angrily to the accusation with a rebuttal on its web site.

While it is true that only $9.1 million was paid directly to authors and artists, a further $75.9 million was paid to Australian publishers and then redistributed by publisher members to authors and artists under private contractual arrangements.  Indeed of the $114 million collected in 2008/9, 86% was paid to rightsholders.

As former ASA Executive Director Jeremy Fisher points out in the article, this system of direct and indirect payment is relatively opaque, and has the potential to lead to disputes between authors and publishers. That is why CAL is in the process of implementing a new distribution system, CALdirect, under which authors and publishers will be paid directly on the terms agreed privately between them. This system, which is specifically designed to allow authors and publishers the flexibility to implement individual agreements on a title-by-title basis, is a world first and places CAL at forefront of collecting agencies worldwide.

The article also suggests that CAL’s expenditure on salaries is disproportionately high. In fact CAL’s total operations budget in 2008/9 was $15.6 million, or 13.7% of total revenue. This marked a decrease in both real and percentage terms on the 2007/8 figure of $17.4 million, itself a decrease on the 2006/7 figure of $18.1 million, results achieved in the context of significant investment in developing CALdirect.

So the matter is not as straightforward as The Australian‘s article implies. However, I suspect most Australian writers would be delighted if their salaries were even a quarter of what the senior executives in CAL earn.