A week before the Pirate Bay acquisition is set to take place the board of Global Gaming Factory (GGF) has presented plans for the site to its shareholders. If the deal goes through, GGF plans to install a torrent management system for the rights holders, which will allow them to remove infringing files or 'authorize' them.

In June GGF shocked many by announcing that it would acquire The Pirate Bay and turn it into a legal file-sharing site. According to the Swedish company everything is still on schedule, including the required funding. The only hurdle that has to be taken now is to get approval from the company’s shareholders.

Today, GGF shared its plans with the shareholders, who get to decide next week if the deal will go through or not. In a letter addressed to them, the company confirms that the new Pirate Bay will become a pay site while revealing some additional details on how GGF plans to legalize it.

To please the entertainment industry GGF will install a system that will allow the copyright holders to either authorize the ‘illegal’ torrent or have it removed from the site. If the copyright holder opts to choose the first option they will be compensated every time the file is downloaded. In addition, the board says that it will pay penalties if it has to.

“The holder will be able to leave the file and obtain compensation or ask for removal of the file. GGF will also pay any penalties that may arise,” the GGF board announced. There are no licensing agreements in place with the entertainment industry yet, but GGF hopes to partner with most of the major movie studios and record labels within a year.

One of the pitfalls of this new reactive system is of course that copyright holders might start to remove content en masse instead of authorizing it, so that there is nothing available for the (paying) users to download and share. Without content the users will walk away and The Pirate Bay will slowly die.

However, GGF’s board believes that this is not going to happen, and they base this on talks with entertainment industry representatives.

“The risk that rights holders will remove all content on The Pirate Bay at the date of acquisition is estimated as inexistent by GGF. GGF’s assessment after talks with the entertainment industry is that the majority of the content will remain on The Pirate Bay,” they say.

If the shareholders give the green light to the new plans, the Pirate Bay will be acquired on August 27. Whether or not any of the existing users will start to pay for the site is yet to be seen, but we estimate, based on talks with several Pirate Bay users, that the majority will wave goodbye and move on to the next torrent site.