Now is the right time to become an American Federation of Musicians member. From ragtime to rap, from the early phonograph to today's digital recordings, the AFM has been there for its members. And now there are more benefits available to AFM members than ever before, including a multi-million dollar pension fund, excellent contract protection, instrument and travelers insurance, work referral programs and access to licensed booking agents to keep you working.

As an AFM member, you are part of a membership of more than 80,000 musicians. Experience has proven that collective activity on behalf of individuals with similar interests is the most effective way to achieve a goal. The AFM can negotiate agreements and administer contracts, procure valuable benefits and achieve legislative goals. A single musician has no such power.

The AFM has a proud history of managing change rather than being victimized by it. We find strength in adversity, and when the going gets tough, we get creative - all on your behalf.

Like the industry, the AFM is also changing and evolving, and its policies and programs will move in new directions dictated by its members. As a member, you will determine these directions through your interest and involvement. Your membership card will be your key to participation in governing your union, keeping it responsive to your needs and enabling it to serve you better. To become a member now, visit www.afm.org/join.

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President’s Message

AFMPresidentRayHairW

Ray Hair – AFM International President

    Donate to AFM’s Hurricane Irma Relief Fund

    On September 6, Hurricane Irma passed just north of Puerto Rico with ferocious winds of 185 miles per hour as a category 5 hurricane, then roared past Cuba and ashore onto the US mainland Sunday, September 10, battering the entire state of Florida with an enormous reach of more than 400 miles. Irma made landfall on the southern tip of Florida as a category 4 hurricane with sustained winds in excess of 130 miles per hour, causing massive flooding and storm surges, resulting in more than five million power outages, and creating catastrophic tornadoes. The fury of Hurricane Irma occurred on the heels of Hurricane Harvey, which made landfall August 25 on the Texas Gulf Coast, between Port Aransas and Port O’Connor, Texas, just east of Houston and Galveston as a category 4 hurricane as well, marking the first time in recorded history that two hurricanes as powerful as category 4 made landfall in the same year, in the United States.

    These disasters have hit AFM members hard. Hurricane Harvey displaced more than one million people along the Texas Gulf Coast. The storm affected all Houston Arts District organizations, flooding Jones Hall, the home of the Houston Symphony. It totally devastated Wortham Center, which hosts performances by the Houston Ballet and Grand Opera. “No one knows when the opera and ballet can get back in there,” Local 65-699 (Houston, TX) President Lovie Smith-Wright reported.

    The Houston Symphony has managed to continue operations by moving concerts to other locations around town, pending Jones Hall repairs. The homes of dozens of Houston AFM members were totally destroyed. In South Texas and across Florida, scores of freelance musicians who work steady and short-term casual club dates and single engagements in restaurants and nightclubs have suffered loss of work.

    Hurricane Irma’s trail of wind and storm surge destruction in Puerto Rico, the Florida Keys, Miami, Naples, and up the east and west coasts of Florida resulted in a coast-to-coast pummeling. Officials are still trying to assess the extent of damage. A stunning
    13 million Florida residents were without power for days. Irma’s parting blow to Florida, as it moved on to Georgia and South Carolina, was record flooding in the Jacksonville area. Together, Irma and Harvey may have caused up to $200 billion in damage in Texas and Florida, according to Moody’s Analytics.

    In one bit of good news, Local 389 (Orlando, FL) Secretary Sam Zambito reported that Disney advised that it will pay its Orlando theme park employees, including musicians, for all shifts cancelled as a result of the storm. Bravo Disney!

    How You Can Help

    In an effort to respond to the epic devastation and to help affected AFM members and their families residing in federal disaster areas in Puerto Rico, Florida, and Texas who are fighting to recover from one of the most destructive US natural disasters in history, we have established the AFM Hurricane Relief Fund. It’s more important than ever that we stand together and help our brothers and sisters. Please open the afm.org home page and click the “DONATE HERE” link.

    If you prefer to write a check, send it to:

    AFM Hurricane Relief Fund
    American Federation of Musicians,
    1501 Broadway, Suite 600
    New York, NY 10036

    Please note: contributions to the AFM Hurricane Relief Fund are not tax-deductible.

    How to Get Help

    If you are a victim of Hurricane Harvey or Irma, here’s how you can get help.

    AFM Hurricane Relief Fund

    Download the instructions and application for hurricane assistance here:

    http://www.afm.org/hurricane-disaster-
    assistance/

    The Actors Fund

    Musicians affected by Harvey or Irma should contact The Actors Fund for information on emergency financial assistance and other resources.

    For Harvey assistance: The Actors Fund’s Los Angeles office at intakela@actorsfund.org or 323.933.9244, ext. 455.

    For Irma assistance: The Actors Fund’s New York office at intakeny@actorsfund.org or 212.221.7300, ext. 119.

    AFL-CIO Union Plus

    Musicians who have been impacted by Hurricane Harvey or Irma, and who are participating in certain Union Plus programs may be eligible for financial assistance through the Union Plus Disaster Relief Grant program. Please visit the Union Plus Disaster Relief Fund at unionplus.org/disaster to learn more about Union Plus benefits and eligibility requirements.

    Texas AFL-CIO

    Union musicians affected by Harvey may apply for assistance from the Texas Workers Relief Fund established by the Texas AFL-CIO here: http://www.texasaflcio.org/relief/

    If we stand together and act now to take care of each other, we can make a difference. Please donate to the AFM Hurricane Relief Fund today by visiting AFM.org and clicking “DONATE HERE.”

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    Unallocated Contributions Support Each Participant’s Pension

    Note: Fund updates appearing in this column are not applicable to the AFM’s Canadian pension fund, known since August 2010 as Musicians Pension Fund of Canada. 

    To improve its funded status and restore its health over the long term, the American Federation of Musicians and Employers’ Pension Fund (Fund) needs additional employer contributions as well as good investment returns. For the plan year that ended March 31, 2017, higher employer contributions and strong investment performance kept the Fund out of critical and declining status for the plan year that began April 1, 2017. Whether the Fund can stay out of critical and declining status in the future will depend in part on income each year from employer contributions and investment returns.

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    Public Radio, Live TV, and Relocation

    I am pleased to report that, after two rounds of negotiations, the Federation has reached a successor public radio agreement with representatives of American Public Media and Minnesota Public Radio, which will set the pattern for wages and conditions for musicians who perform services for some two-dozen producers of public broadcasting programs, including Performance Today and Prairie Home Companion. Our successor public radio agreement becomes effective upon ratification and extends three years to January 31, 2019, with wage and applicable benefit contributions retroactive to February 1, 2016.

    Important to this agreement are groundbreaking new media provisions that establish use fees and residual payments for musicians whose public radio performances are licensed to interactive digital service providers such as YouTube, Hulu, Amazon, and Netflix. In addition to a new use fee payable to each musician whose performance is embodied in any clip or program exhibited via new media, 5% of producers’ gross receipts derived from the license for exhibition of any clip or program will be distributed half (2.5%) to the AFM and Employers Pension Fund, unallocated to any particular individual, and half (2.5%) to musicians.

    Thanks are in order to AFM Secretary-Treasurer Jay Blumenthal, In-house Counsel Jennifer Garner, Electronic Media Services Division Director Pat Varriale, Symphonic Services Director Rochelle Skolnick,
    Symphonic Electronic Media Director Debbie Newmark, and Local 802 (New York City) President/AFM IEB member Tino Gagliardi for their invaluable help with
    these negotiations.

    Live TV Negotiations

    The Federation will convene its fourth round of negotiations with the NBC, ABC, and CBS television networks August 14 toward a successor agreement covering musicians performing in live television variety shows like Saturday Night Live, The Voice, and Dancing with the Stars; late night shows like The Tonight Show Starring Jimmy Fallon, Jimmy Kimmel Live, and The Late Show with Stephen Colbert; and specials like the Academy Awards and Grammy Awards shows.

    As we all know, employers in all quarters of the commercial television industry have continued the fight to deny fair compensation to musicians, to expand their own production rights, and to deny union jurisdiction (and thus the path to negotiating fair deals) over products made for new media platforms.

    Unfortunately, with previous AFM administrations, television employer intransigence was never met with a firm union-like resolve to fight through to reasonable conclusions. As a result, my administration inherited a tangle of television agreements that were expired and/or enmeshed in years-long and seemingly endless negotiations.

    It has taken time to put our television house in order, but we have done so. We took on the tough negotiations, fought nose-to-nose when necessary, and showed the various employer groups an unflagging commitment to asserting our rights and obtaining fair deals. Using an approach that has been both militant and deliberate, we worked through the AFM’s outstanding television agreements and concluded deals—including successors to the TV Videotape Agreement, the Country Music Television Agreement, and the Basic Television Film Agreement—that benefited musicians and put the Federation on a firm footing for the current round of negotiations.

    Of highest priority in our current TV negotiations are our efforts to improve coverage and residual compensation for musicians when programs are exhibited and streamed in new media. With the viewing public transitioning away from traditional linear television, switching off their sets in favor of on-demand online video alternatives, the watching of regularly scheduled broadcast television is dying. Against this background, the Federation’s TV new media proposals, which mirror provisions bargained successfully by our sister entertainment unions, have taken on added importance.

    We have advised the networks that any successor agreement must contain on-demand streaming revenue participation for musicians at least commensurate with levels enjoyed by other workers in the industry. We will be negotiating hard for fair TV new media provisions this month, and given the networks’ difficult attitudes, I expect additional negotiating sessions will become necessary later this year, most likely in Los Angeles.

    Headquarters Relocation

    With the Federation’s lease at 1501 Broadway in the heart of New York City’s Times Square set to expire January 2019, and with full authorization by the International Executive Board, Secretary-Treasurer Jay Blumenthal and I have entered into negotiations to purchase an office condo in the financial district in lower Manhattan to serve as the Federation’s new home.

    After comparing the costs of leasing versus purchase, we have determined that owning our offices is significantly more cost effective and will stabilize and reduce office occupancy expenses in the years and decades to come, putting to rest the Federation’s decades-old struggle over acquiring and owning its International Headquarters.

    Protecting the Federation’s long-term financial interests by owning our headquarters office is a no-brainer. We will create equity, and reduce costs. We will reduce liability and increase Federation assets, all made possible by the Federation’s improved financial condition—a direct result of the hard work of our staff and the diligence, dedication, and fiscal responsibility of our magnificent International Executive Board. Watch for more details in this column next month concerning Federation media negotiations and our relocation journey.

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    Pension Fund Avoids Critical and Declining Status Due to Higher Investment Returns and Increased Employer Contributions

    Note: AFM-EP Fund updates appearing in this column are not applicable to the AFM’s Canadian Pension Fund, known since August, 2010 as Musicians Pension Fund of Canada. 

    At its May 2017 Board of Trustees’ meeting, AFM-EP Fund actuaries advised that better than expected investment returns and increased employer contributions—most notably, $20 million in new contributions over the next three years from the Sound Recording and Motion Picture industries negotiated by the Federation—enabled the plan to avoid “critical and declining” status for at least another fiscal year.

    Although the odds are that the Fund may become critical and declining at some point in the future, even as early as the next fiscal year (beginning April 1, 2018), that status will depend on investment returns, employer contributions, and other results during this fiscal year.

    Busting the Myths

    With the speed of today’s Internet, inaccurate information can be disseminated quickly. Here are a few myths I’ve seen, along with the facts.

    Myth #1: The Fund is not critical and declining so we’re “safe.”

    Though plan status has been certified critical each year since 2010, avoiding critical and declining status this year doesn’t mean the plan is healthy. High investment returns coupled with innovative increases in Federation-negotiated employer contributions kept the Fund out of critical and declining status this fiscal year. As recently as the plan year concluding March 31, 2016, employer contributions covered only 42% of benefit payments.

    Increases in the percentage of employer contributions are essential to the health of the Fund. This cannot be accomplished if members opt to work off-contract without pension contributions for signatory employers, rather than insisting that Federation and locally-negotiated agreements with pension benefits be honored.

    Myth #2: The Keep Our Pension Promises Act (KOPPA) proposed by Senator Bernie Sanders is good for participants.

    Fund trustees would strongly support legislative changes that would help the Plan secure participants’ pensions without relying on benefit cuts. Unfortunately, KOPPA as currently drafted and sponsored by Senators Bernie Sanders (I-VT), Al Franken (D-MN), and Tammy Baldwin (D-WI) provides the Fund with no relief whatsoever.

    Why not? Because a key provision in the bill disqualifies the plan from coverage. Relief provided by KOPPA pertains only to plans with a certain percentage of their funding problem attributable to employers who withdrew from the fund without paying their withdrawal liability. One example of this was the 2011 Philadelphia Orchestra bankruptcy. However, because the plan does not meet the bill’s required threshold percentage, KOPPA, if enacted, would fail to provide any relief.

    KOPPA would also eliminate the plan’s ability to avoid insolvency (running out of money) by reducing benefits. While no one wants to see benefit reductions happen, that option is important as a last resort. Benefit reductions could allow the plan to continue paying higher benefits than if it became insolvent. As written, Congressional adoption of KOPPA, though highly unlikely in the current Congressional climate, would shorten the life of the plan.

    Local 802 (New York City) President and Fund Trustee Tino Gagliardi and I met with senior staffers for Senators Sanders, Franken, and Baldwin in Washington, DC, June 6 to discuss what changes to their proposed KOPPA legislation would be needed to permit the plan to benefit from it. Unfortunately, none of those staffers believed that KOPPA would ever move through required congressional committee hearings where amendments could be made, let alone be adopted.

    Myth #3: The plan lost 40% in investment returns when other plans lost 25%.

    The Plan lost 29% in investment returns for the 12 months (fiscal year) ending March 31, 2009, not 40% as some have alleged. This misunderstanding was tracked back to the trustees’ December 2016 letter to participants that said plan assets declined by 40% over 18 months. Some have read this to mean the plan’s investment return was negative 40% over that period—but that was not the case. 

    Myth #4: The Fund office received huge staff pay increases in 2009.

    This misunderstanding was tracked back to the change in IRS reporting requirements for the compensation numbers shown on IRS Form 5500 Schedule C. The rules changed in 2009 to expand the definition of compensation to include, not just salary, but all payments made on behalf of staff—including, for example, health insurance and other benefit costs, travel reimbursements, and other expenses incurred while performing their jobs.

    Fund Office staff cost increases have averaged only 2.16% a year from fiscal year 2009 to 2016. This modest increase, only slightly more than CPI, includes an increase in staff health care premiums over a period when premiums rose on average more than 25%.

    What’s Next?

    Because the Fund remained in critical status this year, benefit reductions to already earned benefits, which might be necessary if the Fund becomes critical and declining, will not be considered this year. Next year, the Fund will go through the same process—as it has every year in the past—to determine the plan’s status. Critical and declining status could be in the Fund’s future at some point and appropriate preparations will be made. Until then, the Fund will continue to monitor its progress, review its investments, collect employer contributions, and manage expenses.

    The Federation, in each of its negotiations, will push hard for increases in employer contributions to increase the plan’s overall funding percentages and improve assets available for distribution.

    I am committed to keeping you updated with the most current information about the Fund’s status. In addition, please visit the Fund website, www.afm-epf.org, register and log on for easy access to FAQ’s and updated information as it becomes available.

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    Unity Is Key in Our Struggle for Fairness

    Following is the text of my opening remarks to the 4th International Orchestra Conference in Montreal, Canada, May 12.

    On behalf of the entire membership of the American Federation of Musicians of the United States and Canada, I am pleased to welcome you to Montreal for the 4th International Orchestra Conference, presented by the International Federation of Musicians (FIM) and the Quebec Musicians Guild, AFM Local 406. We are gathered here in this wonderful city, in this beautiful country, to share information, experiences, and ideas that will benefit and enlighten musicians performing in symphonic institutions around the world.

    As we talk about some of the challenges we face, I want us to do so in the context of the greater challenge that affects relationships between all of us—the same challenge we’ve always faced.

    Those of us in this room who are musicians understand our passion as musicians to perform perfectly, not just because that is our livelihood, but because that’s what gives meaning to our lives. It’s who and what we are. It’s also about the pride we feel when we can control our own destiny through the making of music, and when we believe we are reaching our potential as musicians. It’s about being fairly compensated for the artistic excellence and the joy we bring to the world.

    From the time we began to organize sound, we eventually understood that strength and harmony came from unity, from aligning ourselves together perfectly as musicians because we are stronger together.

    Our issues always rest on that greater challenge—how can we achieve fair compensation and fair treatment commensurate with the power of our music?

    What we’ve struggled with since the beginning—we make all the music, while everybody else makes all the money—is our eternal contest. How can we achieve fairness for what we do? We can get there if we apply the same principle that we live by when we perform as musicians, and if we have the will to do it. The answer is unity.

    There Is Strength in Unity

    AFM was born in 1896, just as innovative technology began to alter how the public consumed music, from the live stage, concert halls, and theater pits to analog audio and visual broadcasting in the 1920s and 1930s; high fidelity in the 1950s to digital distribution in the 1980s and 1990s; and now, satellite and web radio with Sirius XM and Pandora, and on-demand audiovisual streaming with Spotify, Apple, YouTube, Hulu, Amazon, Netflix, and others.

    For musicians in the US and Canada the opportunity to drive a fair bargain with well-capitalized media companies depends largely on collective agreements bargained by the AFM.

    A fair bargain for media was far easier in the day when the means of production and distribution of music was less efficient, more expensive, and less integrated.

    The technological landscape is far different today. In the 21st century, we live in a time of convergence, where the marriage of digitization, production, and transmission technology has blurred the lines between broadcasting, streaming, and social new media. We are experiencing an unparalleled surge of innovation, resulting in a global techno-economic paradigm shift.

    Today, control over the means of production and distribution, formerly separate in the analog world, but now digitally unified, has produced winners and losers. All you have to do is follow the money.

    Let’s look at Google, YouTube, and Facebook. Last month, CNBC reported that Google and Facebook together will earn $106 billion from advertising this year. Analysts expect Google-owned YouTube to top $10 billion in ad revenue in 2017. How many of you in this room today work with orchestras that have clips on YouTube?

    A couple of days ago, I went to YouTube and searched for the Chicago Symphony Orchestra (CSO), clicked on CSO’s May 8, 2015 performance of Beethoven’s 9th. (Very popular clip—more than
    6 million hits.) Before I was able to access the Beethoven clip, the first thing I got was an ad about nasal congestion relief. Funny, because I had recently searched online for information about allergy medicine. Google, YouTube’s parent company, remembered that and enabled YouTube to target my interest in CSO to spot-play a specific advertiser—Rhinocort Allergy Spray.

    I then searched for the New York Philharmonic, clicked on a clip of the orchestra performing Stravinsky’s Pulcinella. But first, I was forced to view an ad for a spelling and punctuation error application. Funny, because I frequently use free online spelling, dictionary, and thesaurus applications, when I’m writing my columns for the International Musician. Google knew that and targeted my search with related advertising.

    Then, to round out the exercise, searching for a foreign orchestra clip on YouTube, I clicked on the Iceland Symphony Orchestra’s Mozart Clarinet Concerto in A Major. There again was the same allergy medicine advertisement that I’d seen a minute earlier in front of the Chicago Symphony Orchestra video. I refreshed the page and got an ad for a website promoting six-pack abs.

    Years ago, there was very little money in clip and excerpt use online. Today, it’s been monetized into the billions. In its advertiser supported streaming model, YouTube is using content posted by the Chicago, New York, and Iceland orchestras to sell allergy medicine, and lots more. Do those orchestral institutions get a cut of YouTube’s
    $10 billion in ad money, and if so, will the musicians who performed so perfectly in those clips ever receive their fair share?

    The managers and agents certainly recognize the value musicians add to media. When our talent improves the financial well-being of the media industry, our livelihood should improve as well. If we surrender complete control over media production and distribution, we lose our leverage and our stake in the content and we cede higher economic ground to management, middlemen, agents, and others in the food chain. We lose control of our destiny and our ability to reach our potential as musicians. But we can fight this and win. We can make a difference if we work together, because we are stronger together and because in unity, there is strength. Through the power of our music, as Eric Clapton said, we can change the world.

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Official Journal of the American Federation of Musicians of the United States and Canada