The Congress of South African Trade Unions (Cosatu) has accused the Gallo music group of trying to ”rip it off” over a venture involving the recording of workers’ songs.
The venture, which was the highlight of Cosatu’s eighth national congress this year, hit a snag because of several disagreements between Cosatu and Gallo, which is majority owned by media and entertainment group Johnnic Communications (Johncom).
Johncom CEO Connie Molusi has been drawn into the dispute, which revolves around money. Differences between the 1,8-million-member union federation and Gallo began to simmer on the eve of the congress in September, and subsequently boiled over into a heated row.
Details of the dispute are contained in a memo written two weeks ago by Cosatu general secretary Zwelinzima Vavi to national, regional and local general secretaries of the union federation’s 21 affiliates.
In the memo, dated November 4, Vavi charges that ”Gallo and other recording companies have for years been ripping off artists … They cannot do that to Cosatu as well.”
The memo claims Gallo initially came in as a ”sponsor” but the music group later demanded that amounts originally sponsored be refunded from the proceeds.
Cosatu and Gallo announced the music deal with much fanfare in September before Cosatu’s congress. The deal was trumpeted by Cosatu as the ”first of its kind”.
”For the first time in the history of world labour movement, a union federation, music icons and a titanic recording institution have come together to produce a workers’ music recording,” Cosatu said in a statement in September.
South African musicians who participated in the venture include Hugh Masekela, Chicco, Letta Mbulu, Jonas Gwangwa, Busi Mhlongo and Sibongile Khumalo.
The musicians, who entertained about 3 000 Cosatu delegates on the first day of the three-day congress, recorded a number of songs.
The plan was to release the songs on CDs, DVDs and cassettes by the end of October. None of the material has been released so far.
In his memo Vavi said that ”a major disagreement between Cosatu and Gallo has arisen”, and that the problem started after Gallo offered Cosatu 7% of royalties, less production costs, from the turnover.
Cosatu rejected Gallo’s offer. Vavi wrote: ”When we exposed the fact that, while the figures associated with this 7% appear mouth-watering — assuming the sales break records and we sell half a million — Gallo was going to receive the lion’s share of what remained, following the allocation of all royalties to artists, producers and other record companies to which some of the artists are contracted.”
After Cosatu rejected Gallo offer, the music group came with a new proposal, which was rejected, the memo said.
The new proposal, on the eve of the congress, Vavi said, offered Cosatu a 50% share of the turnover, in addition to a 7% royalty.
Vavi said Cosatu handed a counter-proposal to Gallo suggesting that Cosatu gets 80% and Gallo 20% of the turnover. Cosatu also suggested that royalties for the artists be increased.
Vavi said Cosatu had also raised concerns because Gallo’s initial role had been as a sponsor.
Gallo and Johncom collectively spent about R700 000 to cover the costs of the recording and the production of CDs, videos, DVDs and cassettes.
Another R300 000 was spent on editing. Vavi said: ”Both Gallo and Johncom had insisted that their portion of ‘sponsorship’ be refunded from the first sales of the product, which we [Cosatu] agreed to.”
Vavi said Cosatu’s counter-proposal suggested that reference to ”sponsorship” in the draft contract be removed ”in view of their [Gallo] demand to have all the amounts originally sponsored refunded”.
Sponsors, Vavi said, ”cannot ask for refunds but still insist on calling themselves sponsors”.
”We proposed that we should instead be talking of partnership,” Vavi said. Cosatu, Vavi said, also ”made it clear that this is a Cosatu venture, into which they originally came as sponsors”.
Vavi said Cosatu insisted that the trade union federation be the ”major beneficiary, not Gallo and, indirectly, Johncom”.
Gallo had not responded to its proposal, Vavi said. ”We have reason to anticipate that they will reject it.”
The union federation had called for a meeting with Molusi. It is not clear whether the meeting has taken place.
Cosatu spokesperson Patrick Craven this week said Cosatu was engaged in ongoing negotiations with Gallo.
Although the parties have agreed to release the songs on December 1, Craven said, there are still some outstanding matters.
Pressed to reveal what these matters are, he said: ”They relate to royalties and other issues.” Craven said Cosatu had met Gallo management on Wednesday this week to discuss the matter, but he was not sure what the outcome was.
Several attempts by the Mail & Guardian to get comment from Gallo Music Group chief executive Charles Kuhn proved fruitless.