LAANE: New US Film Scoring Policies and Incentive Rules Are Key to More Work

February 25, 2015

by Marc Sazer, RMA President and Member of Local 47 (Los Angeles, CA)

As AFM President Ray Hair has reported, the American Federation of Musicians recently concluded negotiations with the Alliance of Motion Picture and Television Producers for our collective bargaining agreements covering theatrical motion pictures and television film. We are relieved to have gotten past the negotiating process, and can now set our sights on a top priority for affected musicians: employment. As we have reported previously, the AFM has relatively far fewer signatory producers than any other union in the film and TV industry, and the number of signatories has not grown for decades. This affects our whole union—our pension funds, our relationship with corporate media, and our position with sister media unions.

The Los Angeles Alliance for a New Economy (LAANE) is a renowned (and sometimes feared) research and public policy powerhouse based in Los Angeles. Recently LAANE released a nearly 60-page report titled Keeping the Score, covering the state of AFM film scoring, its relationship to tax credits, and the offshoring of AFM musician employment.

Because LAANE is based in Southern California, this report focuses on the Los Angeles AFM experience. However, this project has created a role model for analysis through depth of research, and understanding of relationships between unionized musicians and the companies that employ them throughout North America. You can read an executive summary or the full report by clicking here.

Some of the key findings are startling: “The cost to production companies of employing recording musicians at the top industry standard is equivalent to 0.36% to 0.52% of a typical film’s production budget. By offshoring this work, production companies save less than one-quarter of 1% of the film’s production budget—or $143,000 on a typical $65 million film—yet the workers and the community lose $1.2 million.”

“Production companies avail themselves of tremendous taxpayer-provided benefits in the name of quality employment, making all Americans de facto film and television producers. Federal subsidies have historically provided over $200 million annually. State subsidies provide $1.7 billion annually. Consumers are paying more at the box office, as ticket prices have outstripped inflation. Yet production companies may skirt the law with their score-recording practices, if they are not paying required taxes when they import a score that was recorded with foreign subsidies, or when musicians are misclassified as independent contractors or paid under the table.”

The report makes a series of policy recommendations. I have highlighted a few here. Implementation of these policies would do more than create AFM employment. These policies would strengthen our pension funds, provide health care for musicians who depend on this work, and empower musicians in all areas of performance.

Recommendations to policy makers:

• State tax credits should require domestic score recording.
• The US should shift from state tax incentives to a single federal tax incentive.
• It is time for the US federal government to replace section 181 with tax credits for US production costs. The credit should be assignable in order to provide actual financing for production.
• A national approach should be combined with a requirement for domestic recording. A bill was recently introduced in the
  US House to amend section 181 along these lines.
• The federal government should enforce countervailing duties on imported scores. A recent legal analysis demonstrated that film and television companies are trying to have it both ways: after recording overseas they reimport extensively-subsidized scores with no payment of additional duties, but they want the federal government to use the very same “countervailing duty” law they are allegedly violating to simultaneously protect them against subsidized imports.
• State and federal governments should enforce all applicable employment laws. Some of the degradation of standards in film and television recording work is because work is happening “under the table,” often involving the misclassification of employees as independent contractors. Misclassification
  is a problem that cost the federal government more than $2.7 billion in lost revenues in 2006.
• Governments should ensure public incentives provide a sufficient return to the community.

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