The SUISA Board of Directors dedicated its December meetings mainly to the 2021 budget. During the current crisis situation due to the pandemic, the projections are even more difficult, compared to 2019. It is possible that there may be major deviations regarding the degree of how the budget is met. In addition, the 2020 budget was revised last year at the end of April during the running financial year and the Executive Committee worked on the basis of a corona budget with new targets for the remaining eight months.
In December, the Board of Directors approved the following cornerstones for the 2021 budget:
2021 income has been budgeted at 20.7% less than the results from 2019, i.e. the financial year before the start of the crisis. Compared to the very cautious corona budget for 2020, however, it is 6.7% higher. The income from performing rights is set at 37% below the 2019 figures. This is due to the event bans resulting from corona ordinances and regulations.
The 2021 costs were budgeted at about 5% less than those for 2019. They are, however, 20% lower than the figure provided in the revised corona budget 2020.
Several factors play a role when it comes to how cost is developing: Apart from savings in terms of personnel, there are significant cost segments in the IT and securities expenses. Savings are planned for personnel costs, on the one hand due to retirements and associated restructuring, and on the other hand due to the outsourcing of 11 staff into the subsidiary Mint Digital Services AG.
When it comes to the IT segment, the Board of Directors thinks it is more important to maintain innovation and to partially expand on it in order to retain competitiveness than to just implement mere saving measures. Efforts to save money which are too strict often backfire and lead to an unwanted slowing down of the development of our service ranges.
Finally, the securities expenses are a budget item which is very hard to estimate per se. Luckily, the Board of Directors could establish that the financial markets have meanwhile recovered from their collapse in March 2020 and that financial investments are thus again back on the levels of last year. For 2021, the Board has budgeted a much lower finance expenditure than in the 2020 corona budget.
Despite the bleak budget outlook, the Board of Directors decided that the cost deductions for the 2021 distributions should remain unchanged. Executive Committee and Board of Directors expect that the amounts from released liabilities can compensate for the decrease in revenue and thus for an increase in the cost to revenue ratio.
New service range catalogue and minimum fee for SUISA membership
The Board of Directors also covered the service range offered to members and principals in its December meeting. SUISA now holds more than 12,600 members who are entitled to vote and 26,700 principals. Unfortunately, of the 40,000 rights holders, only 60% generate significant income. More than a third of all entitled rights holders never receive a distribution because their works are neither performed, recorded, broadcast nor used online. All rights holders were able to use all of SUISA’s service ranges in the past. The digitisation led to the creation of online services (“My account” portal). Self-service options available in the portal for rights holders are going to be further expanded.
The Executive Committee thus worked out proposals how costs could be saved by offering service ranges to principals only via online features. This measure would save working time and thus staff costs. As a consequence, the Board of Directors now decided to adopt the conditions for membership. From now on persons who have been principals with SUISA for at least one year and have been paid out a minimum of CHF 3,000 (previously CHF 2,000) will become members of SUISA. Principals shall, from 2022 onwards, only be able to access SUISA’s range of services via the online portal “my account”.
Changes in the distribution and investment rules
Further business discussed at Board level was the approval of new distribution rules, among other for the collections from blank media levies and the change of the investment rules regarding the criterion of sustainability of financial investments.
Flexible management in times of crisis
Finally, the Board of Directors decided to create a conference of Presidents which is meant to replace the previous corona task force. Based on the reporting of the Executive Committee, it is scheduled to determine the impact of the ordinances and regulations by the authorities on SUISA’s business on a monthly basis and highlight need for action to the Board of Directors. Members of the conference of Presidents are Géraldine Savary, Roman Camenzind, Rainer Bischof, Marco Neeser and Xavier Dayer.