It's been one setback after another for the Spanish music industry recently. The latest groundshaking event is the news of the dismissal of one of its most charismatic executives, Carlos López, president of Sony Music Spain. From now on, the label will be a unit answering to the Miami delegation. For the last decade, Sony Music Spain had been part of what the corporation calls the Europe Region Office, based out of London.

Considered a "company of artists" that maintained long-running relationships with its musicians, the Spanish branch of Sony has a stable of national stars such as Joaquín Sabina, Ana Belén, Manolo García, Estopa, Russian Red, Víctor Manuel, El Canto del Loco, Luis Eduardo Aute, Sidonie, Pereza and, until recently, Joan Manuel Serrat, Vicente Amigo and Los Planetas.

Historically very oriented toward the Latin American market, it also managed world hits such as Macarena , by Los Del Río, and Lágrimas negras, by Diego El Cigala and Bebo Valdés, which has sold over a million copies worldwide.

Although the staff of Sony Music Spain has been reduced to around 90 people, the company still occupies an entire building in Conde de Orgaz park in Madrid. It is the legacy of a past failure: the building was once the imposing headquarters of Discos Columbia, a pioneering label from San Sebastián. Besides the Columbia catalogue, Sony Music also inherited the archives of memorable music labels such as Zafiro and Vergara.

A journalist by training, Carlos López began working at the press department of Hispavox, one of many Spanish labels that were bought up by multinationals. His career is a reminder of the once open nature of the business, when you could rise from the bottom all the way to the top.

President of Sony Music Spain since the turn of the 21st century, López was never one to mince his words. When a judge acquitted an internet user charged with illegally downloading 7,000 albums, he declared: "You can be a judge and an imbecile at the same time."

López had to lead Sony Music during the worst possible years. One of the solutions he came up with was to make Sony a participating manager in a few bands, so as to get some revenues from their live tours.

"We are no longer music labels; now we have become music companies and we seek to share in anything that generates a career in the 21st century."

López insists that this is not some sort of revolutionary tax. "If we launch new artists, we need to recoup the costs from somewhere. With the way sales are going, an album could be a hit yet remain in the red. But concerts on the other hand cannot be pirated."

It is still not known whether López will be replaced with someone else in Madrid or whether Sony Music Spain will be run directly from Florida. Afo Verde, the Miami chief of Sony's Latin division, did not respond to repeated inquiries as to whether this is a simple cost-cutting measure or the beginning of a radical restructuring process in one of the markets that's been hardest hit by free music downloads. Verde happens to be in Spain at the moment, visiting all the main artists (including Julio Iglesias, whose contract is handled directly by the company's headquarters in New York).

Verde, a successful Argentinean producer with a penchant for tropical music, is sending out a dual message. On one hand, it is a message of calm: he was a reggae musician himself and he understands artists' concerns. But on the other, he is here to ask them for some belt-tightening, which in the words of singer-songwriter Manolo García, former lead singer of El Último de la Fila, means "reducing our fees and their commitments."

For José María Cámara, a former president of Sony Music, the situation is delicate: "Perhaps the company has stopped producing fresh new talent that is exportable, and that directly affects profits. It is also the responsibility of a few artists who would rather live comfortably than risk sweating it out in Latin America.

"In the worst of cases, Sony could stop investing in Spanish artists and their presence could be reduced to little more than a marketing department, there to work on other people's hits."