President’s Message

On May 1, I traveled to Fort Wayne, Indiana, to stand with the musicians of the Fort Wayne Philharmonic as they rallied with hundreds of supporters and unionists to protest unfair treatment endured at the hands of the institution’s management and board of directors. 

Also standing with Philharmonic musicians were Fort Wayne AFM Local 58 President Sam Gnagey and Secretary-Treasurer Bruce Graham; AFM Director Symphonic Services Division (SSD) Rochelle Skolnick; SSD Negotiator Todd Jelen, Regional Orchestra Players Association (ROPA) President Mike Smith; International Conference of Symphony and Opera Musicians (ICSOM) President Paul Austin; local officers from Detroit, Louisville, Toledo, Chicago, South Bend, and Columbus; and AFL-CIO union officials from across the region. (See rally photos on page 12). 

Historically, May Day is a day of unity and togetherness, a symbol of springtime and rebirth, when we also celebrate the gains made by organized labor. But the Fort Wayne rally became a venue for Philharmonic musicians to publicly expose management’s heavy-handed union-busting tactics in their efforts to negotiate a fair contract. 

The most recent agreement expired in August 2019. The parties were close to a deal in February 2020. Then the pandemic hit. Management quickly realized that COVID was just what the doctor ordered—an excuse for “adjusting the business structure” of the institution. That’s management-speak for removing bread from the tables of musicians and placing it on the plates of the managers. 

Musicians and orchestras are invaluable artistic and cultural resources and they should be shielded from the whims of managers and board representatives who think that every dollar paid to a musician is a dollar the manager or the institution doesn’t get. And from what I’ve heard, there is no management plan other than to offer the orchestra less work and less money. 

Philharmonic musicians have been without a paycheck since being illegally furloughed late last summer. Confronted by an institution that saw the pandemic as a guise to obtain the concessions they’d always wanted, orchestra members are organizing to save themselves and the artistic excellence they bring to their great city. Their employer is intent on cutting production costs and imposing regression, thinking it won’t look so bad in a pandemic. Musicians are held hostage to continued salary and health care cuts unless deep contract regression is reached. 

Management is less interested in community care for the art form, but more about preserving capital at the expense of the musicians. The perfection of the orchestra is the reason that capital and assets were built and acquired in the first place, but now the orchestra is seen as disposable, as a liability. 

The trouble in Fort Wayne points to the leadership of the Philharmonic itself, particularly its manager, Jim Palermo, who is supposed to be doing everything possible to improve the relationship between the orchestra, management, and community. Instead, he does the exact opposite. 

Before the pandemic hit, Palermo was said to have remarked that for the size of the city of Fort Wayne, the orchestra was too expensive, had too many salaried musicians in it, and spent too much money on musicians’ health insurance. He failed to reveal that his own salary was $188,000 per year. Meanwhile, orchestra pay was less than it was in 2012. Palermo now hauls off 3.3% of total annual company expenditures, far more percentagewise than most managers do, and more than many institutions that kept their orchestras working during the pandemic. I’d say it is Palermo’s salary that is too expensive for the institution and the town. 

Philharmonic musicians were nearly done with a new contract when the pandemic broke out. Palermo and his board used the COVID emergency as cover to illegally furlough and starve them out, unless they agreed to regressive proposals that would have decimated the orchestra. That’s why the National Labor Relations Board is dragging management into trial to account for what they’ve done. 

Never mind that an overwhelming majority of American symphonic institutions found creative ways to sustain their orchestras and care for musicians while the pandemic raged and ravaged our lives. Many orchestras, similar in size to Fort Wayne’s, continued to perform, fulfilling their artistic mission toward their respective communities. Not so in Fort Wayne. In fact, every time musicians thought they had done the deals to resolve the mess, the company reneged. But not because of money. 

Here’s a company that reported net assets of over $26 million as of August last year, a $1.5 million gain over the previous year, and they had a one-million-dollar improvement the year before that. With a $5 million to $6 million annual operating budget, they have four to five years of cash in the bank to protect the institution, even if not one more dime came through the door. 

That’s certainly enough to take care of the men and women of the orchestra, even under duress, during COVID times. And yes, COVID did affect management’s financial position, but in a positive way. If you’re an orchestra manager, you can line your pockets when you quit paying an orchestra and then collect hundreds of thousands of dollars in PPP money. 

Then there is the Philharmonic’s board chair—Chuck Surack, owner of Sweet- 
water Sound—said to be the biggest online music retailer in the US today. I think it is ironic that someone who owes his success to revenue from sales to musicians and the live entertainment industry, who has built his empire by selling the tools of the trade to musicians across the country, and particularly to Fort Wayne musicians, is directing an attack on the livelihood of those who make the music. Talk about biting the hand that feeds you. 

The Fort Wayne Philharmonic is a community asset, not a liability. It has been silenced because of the misguided attitudes of management. If the dispute continues, there will be irreparable, inestimable loss to the community. 

The struggle in Fort Wayne is a struggle for musicians and workers everywhere. An injury to one is an injury to all. We can meet the challenge by being better and reaching for our potential. We make music to uplift the human spirit. We will uplift ourselves and we will perform perfectly for those who look to us for hope. 

Standing together, we can make a difference. We can make this world a better place. Nothing can withstand the power of our music and thousands of us working together for unity. 

More than a year after the COVID outbreak prompted the lockdown of global population centers, halting public gatherings, darkening entertainment venues of all sizes, locking out musicians and performers, and eliminating thousands upon thousands of jobs, wheels are now in motion for the reopening of the live entertainment industry and a mid-summer return for concerts, festivals, and Broadway touring productions.

The advent of a return to the road for Broadway touring shows is a welcome development for musicians who travel with the tours and for local musicians who augment the productions in certain locations where the shows are booked.

Last year, during the week of March 15, 2020, a total of 23 AFM-covered touring productions were suspended—shutdown on the road—as a result of the raging spread of coronavirus and government imposed social distancing regimens. The Federation negotiated a shutdown agreement with the Broadway League that provided for cancellation payments and necessary expenses for musicians to return home.

We are now preparing to bargain a successor Pamphlet B and Short Engagement Tours Agreement that will cover musicians who become engaged as the tours resume. It will also impact local employment at certain venues along the tour. AFM touring agreements are administered by our Touring, Theatre, Booking Division, managed and supervised by Director Tino Gagliardi and Associate Director George Fiddler.

Discussions with League representatives during the pandemic shutdown concerning a timeline for a return to the road varied with each conversation. Estimates ranged from late 2020 to early 2021, then late 2021 to early 2022, but were never certain due to the alarming spread of infection, the severity of the disease, and changing expectations for relaxation of social distancing.

The current planned ramp-up for a comeback of Broadway tours coincides with an accelerated vaccination rollout and congressional stimulus money, spurring confidence in a more rapid pandemic recovery and improved economic outlook. Optimism from these developments has prompted performance venues to plan for a return of indoor, full-capacity productions. Regional arts centers want Broadway tours to resume as soon as possible, pointing to the tours as being critical to their recovery.

With vaccines available by mid-May to everyone, regardless of age, producers and venues hope that a safe return to full venue capacity can happen soon thereafter, pending any major problem caused by COVID variants. Arts center managers are indicating that a return to profitability cannot be accomplished unless they can sell 100% of the house. With profits from food and beverage sales still curtailed by pandemic regulations, selling only 80% of the house may not be enough.

Optimism that the resumption of tours can succeed is based on audience retention of pre-COVID tickets. Reportedly, a large percentage of ticket holders did not request a refund on tickets to canceled performances, holding on to their prepandemic tickets to use for rescheduled shows. Venues and presenters see the retention and volume of presold tickets as a sign that substantial consumer demand exists for the return of shows.

In April, theatrical presenters across the country were selling subscription packages and single tickets for 20 Broadway touring productions, some with engagements advertised as early as mid-June. An eight-show subscription series package pitched to theatergoers by a Dallas venue opens with a resumption of the Wicked tour on August 4, for five weeks, followed by touring productions of Hamilton, Hadestown, Frozen, Jersey Boys, Mean Girls, Oklahoma, and Jesus Christ Superstar.

In the Dallas package, the promoter has restricted its single ticket sales. Admission to the most popular shows, such as Wicked and Hamilton, is available only by purchasing a subscription package that includes access to a bundle of other shows. Popular shows are in control of the venues, with promoters using the hit shows to sell tickets to those that are less popular.

While tour producers, venues, and managers believe that demand for Broadway tours is robust and has not diminished during the pandemic shutdown, promoters are wary of taking any kind of hit when reopening their businesses. Negative publicity—increased health risks from COVID variants or press coverage of pending labor disputes—could provide a reason for attendees to avoid the shows, interfering with a clean return to the venues and creating additional financial risk during precarious times.

Despite the optimism from accelerated vaccine programs and economic stimulus, we might still be in limbo. The safety of our talented musicians who travel far from home, performing for diverse audiences, night after night, is of paramount importance. We are musicians. We do not produce the shows and we do not operate the venues. We will not assume the producer’s risk. But, as we all struggle to emerge and return to some sense of normalcy and security in our artistic lives and livelihoods, we realize that the day of absolute certainly may never arrive.

When we meet the League for our Pamphlet B discussions, our negotiating team will include members of the International Executive Board, Division Director Tino Gagliardi, Associate Director George Fiddler, a representative from the Theatre Musicians Association (TMA) player conference­, led by TMA President Tony D’Amico of Local 9-535 (Boston, MA), together with the presidents of Local 5 (Detroit, MI), Local 6 (San Francisco, CA), Local 9-535, Local 10-208 (Chicago, IL), Local 47 (Los Angeles, CA), Local 72-147 (Dallas-Ft. Worth, TX), Local 149 (Toronto, ON), plus rank-and-file traveling musician representatives Susan French of Local 802 (New York City) and Elaine Davidson of Local 72-147.

As the Federation prepares for these negotiations, our team will meet to identify, articulate, and prioritize our members’ needs and develop plans of action to address those needs. To achieve our goals, we will compile and analyze necessary information. We will use every means at our disposal to focus, sharpen, and deploy union power.

We will employ every pound of leverage we have to obtain a fair agreement, not only for those who perform in the orchestra pits, but in the interests of patrons and the public as well.

As I write this column (March 12, 2021) the $1.9 trillion American Rescue Plan, with its relief provisions for multiemployer pension plans, has passed the Senate, was approved by the House of Representatives, and was signed into law by President Biden. If there were ever a day to celebrate the power of collective action and concerted activity, to pay tribute to grassroots political organizing, to unionism and the determination by organized labor to protect and improve the lives of tens of millions of workers and preserve the dignity of retirees, today is that day.

When the Butch Lewis Emergency Pension Relief Act of 2021 was introduced by House Ways and Means Committee Chairperson Richard Neal (D-MA) and was included as part of the larger COVID-19 supplemental bill (now known as the American Rescue Plan), I huddled with Federation National Legislative Director Alfonso Pollard and asked him to head up an “all hands on deck” Federation-wide lobbying effort to help keep the pension provisions in the omnibus supplemental bill, and then push the final legislation across the goal line.

Alfonso and his team rose to the occasion. Our voices, and those of other union members, were heard. AFM members, active and retiree participants, and employers in the American Federation of Musicians and Employers Pension (AFM-EP) Fund will feel the positive effects of the American Rescue Plan for many years to come.

Despite the deeply divided partisan attitudes in Congress toward the American Rescue Plan, 61% of Americans supported its passage. It includes direct stimulus payments and supplemental unemployment benefits—all desperately needed by out-of-work musicians and performers who may be the last to return to work when the pandemic eventually recedes. It also sends billions in aid to hard-hit state and municipal governments to offset COVID costs and to provide help with delinquent mortgage payments, back rent, and utility payments for the jobless, including struggling gig workers.

Passed under the leadership of Senate Majority Leader Chuck Schumer (D-NY), House Speaker Nancy Pelosi (D-CA), and their leadership teams of Richard Neal (D-MA) and Bobby Scott (D-VA) in the House and Patty Murray (D-WA) and Ron Wyden (D-OR) in the Senate, the American Rescue Plan contains a number of provisions that provide substantial relief to multiemployer pension plans that have been adversely impacted by the COVID-19 pandemic, including the AFM-EP Fund. Employer contributions to our Fund have been decimated by job losses from government-imposed pandemic-related shutdowns caused by an abrupt halt in employment in the live entertainment industry last year.

The COVID crisis increased the urgency for pension relief. It has been estimated that absent this critical legislation, millions of Americans would have eventually lost significant percentages of their retirement incomes. Thousands of businesses would have been forced into bankruptcy costing tens of thousands of workers their jobs.

But for participants in our pension fund, the American Rescue Plan, with its embedded pension fund assistance, could not have been adopted a moment too soon because it eliminates the need for benefit reductions. The legislation creates a new special program of financial assistance at the Pension Benefit Guaranty Corporation (PBGC) to provide troubled plans with funds needed to pay full, unreduced participant benefits for 30 years (until 2051).

We want to thank every senator and member of Congress that voted to adopt this important legislation. These lawmakers knew what we needed. They knew what we were up against, and they chose to help professional musicians and the working people of our country. We all also owe a huge debt of gratitude to all of our Federation officers and staff for their steadfast support, and particularly Alfonso Pollard, who designed and oversaw AFM’s massive lobbying effort that mobilized thousands of members and Fund participants to contact Capitol Hill during the crucial weeks leading up to final Congressional consideration. That effort brought together Director of Organizing Michael Manley, Lead Organizer Alex Tindal Wiesendanger, and player conference heads John Michael Smith (Regional Orchestra Players Association), Meredith Snow (International Conference of Symphony and Opera Musicians), Marc Sazer (Recording Musicians Association), and Tony D’Amico (Theatre Musicians Association), who together spearheaded a Zoom call outreach, targeting support from lawmakers in key congressional districts.

While we rejoice in this historic legislative success, we are also mindful of our responsibility as a union to protect the Fund from future shortfalls by negotiating increased employer contributions in successor collective bargaining agreements. To do that, we have to get back to work. Still, no one can say with any degree of certainty when social distancing restrictions will be lifted, or when our various communities will be deemed safe enough to risk reopening our performance venues so that professional musicians can begin to recover from the disruption of this pandemic.

But when you are back on the concert stage, in the theater pits, in the arenas, restaurants, and clubs, performing in venues of every size and shape, please remember that the American Rescue Act protected your pension. It happened because of Unity. We never took our eye off the ball. We elected lawmakers who cared about us, and they had the courage to act. Unity is our power. In Unity there is strength.

Participants in the American Federation of Musicians and Employers’ Pension Fund were notified in January that the Fund filed a second application with the US Treasury Department to reduce benefits under the Multiemployer Pension Reform Act (MPRA). This month, I’ll explain the decision by the Fund trustees to file another MPRA application, the difference in this application from last year’s, and where we are with this year’s application.

I’ll also discuss the all-out lobbying efforts by the Federation and the Fund to mobilize rank and file and participant support for the Butch Lewis Emergency Pension Plan Relief Act of 2021, which would eliminate the need for benefit reductions and provide the Fund with enough money to pay benefits for the next 30 years. Unions have been lobbying hard for pension relief legislation for years. We are very hopeful that soon, with the support of the new Biden Administration and a new Congress, legislative relief will finally become a reality.

Previous Application

The trustees filed an MPRA application on December 30, 2019, which was denied because Treasury disagreed with two actuarial assumptions related to mortality and new entrants into the Fund. We considered our options and decided that, without pension relief legislation, the only way to save the Fund was to file another application soon, for the same reasons as we decided to file last year. We re-filed on December 30, 2020.

Reason for Filing

Without a reduction in benefit payments, or a pension relief bill, the Fund will eventually run out of money. All that would be left for retirees would be amounts payable by the federal insurer, the Pension Benefit Guaranty Corporation (PBGC). As the law now stands, that would amount to about $12,800 a year for a participant with 30 years of service. Also, under PBGC rules, the benefits of all pensioners can be reduced, even if you’re 80 years of age or older. But, even worse, the PBGC itself is projected to run out of money by 2026, which would mean that the benefits of participants in insolvent plans would be reduced to almost nothing. That’s why MPRA benefit reductions are a better option than insolvency.

Changes from Last Year’s Application

The second application has the same design as the previous one. A notable difference is the size of the flat reduction for multipliers other than $1, which went from 15.5% to 30.9%. The reason for the increase in the reduction is the advent of COVID-19, which caused an abrupt halt in employment in the live entertainment industry and led to a substantial reduction in employment in media production.

Despite the Fund’s strong investment performance during the pandemic period—the Fund returned 17.1% from March 1, 2020, to December 31, 2020, which beat our benchmark (and it returned 32.3% in the first nine months of its fiscal year, from April 1, 2020, to December 31, 2020)—employer contributions have been decimated by job losses from government-imposed pandemic-related shutdowns. From April to September of 2020, the Fund received about $22 million in contributions, compared to about $48 million in 2019.

With the arrival of vaccines to help prevent the spread of the virus, we are hopeful that the economy and the entertainment industry will recover sooner than it would otherwise. Nonetheless, we are projecting that employer contributions will be substantially reduced for several years. The dramatic pandemic-driven decline in employer contributions entirely upended our original projections
and led to the increase in the flat reduction percentage.

Benefit Reduction Design

Just as with last year’s application, the trustees were determined to make the cuts as fair as possible and were also determined to protect the $1 multiplier, the core promise of the Fund. In addition, the trustees recognized that participants who had worked more recently already had huge cuts to their pensions due to the reductions of the $4.65 multiplier to $1 and the elimination of the early retirement subsidy and other subsidies.

Faced with these painful reductions, the trustees developed a plan to apply reductions as equitably as possible by eliminating the early retirement subsidy, and the re-retirement and re-determination benefits. The trustees decided to retain the cap on anyone’s benefit reduction at no more than a 40% reduction. There are other statutory protections for older and disabled retirees.

Retiree Rep

You might also remember that the trustees appointed Brad Eggen as the independent “retiree representative” to advocate for the interests of retired and terminated vested participants and beneficiaries. Brad is a 50-plus-year member of the AFM and is the current president of the Twin Cities Musicians Union, AFM Local 30-73 in Minneapolis-St. Paul, Minnesota. He and his “equitable factors panel” of several retired participants from different parts of the industry will communicate directly with participants concerning the pending MPRA application. Brad has retained his own independent lawyers and actuaries to assist in assessing the application.

Pension Legislation

But MPRA cuts may not be necessary. Immediately following President Biden’s inauguration, House Education and Labor Committee Chairperson Bobby Scott (D-VA) and House Ways and Means Committee Chairperson Richard Neal (D-MA) introduced pension relief legislation to save troubled multiemployer pension plans like the AFM-EP Fund. The bill was then revised and introduced as the Butch Lewis Emergency Pension Plan Relief Act of 2021, as part of the larger COVID supplemental relief bill, a priority in the new Congress. With Democrats controlling the White House and both houses of Congress, the bill has a far better chance of becoming law than any prior legislative attempt to address the multiemployer pension crisis. By the time this column reaches your mailbox, the bill may have already become law.

The COVID-19 economic catastrophe has increased the urgency for legislative multiemployer pension relief. According to Congressman Neal, pandemic-driven job losses and the related reduction in employer pension contributions could cause an additional 180 multiemployer plans to become insolvent, “bringing the total of plans facing failure to 300 plans covering 2.5 million participants.”

This new bill is structured differently from the original Butch Lewis Act that was introduced in 2019, but, like the prior version, we believe it would eliminate the need for the AFM-EP Fund to apply for benefit reductions. The bill would provide the necessary funding through the general fund of the US Treasury to permit the Fund to pay all of its liabilities through 2051. The trustees of the Fund are studying the new bill with our actuaries, and if it is as good as it looks, and it passes, the trustees plan to withdraw the pending MPRA application and apply for pension relief.

Visit http://ow.ly/e89L50DBZ2Q to review the congressional legislative summary of the new Butch Lewis Act.

The Federation is all-in with other unions in the campaign to enact the new Butch Lewis Emergency Pension Plan Relief Act. Please join with the hundreds of AFM members who are contacting their legislative representatives by following the links in our email blasts and at www.afm.org as we coordinate the push to renew the health of the AFM-EP Fund and protect all participants.

On January 7, I issued the following statement in the aftermath of the mob attack on our capitol:

“The American Federation of Musicians of the United States and Canada condemns in the strongest terms the mob assault upon the US Capitol building, which was an attempt to subjugate our democracy and the peaceful and constitutional transfer of power after a lawful presidential election. The attack resulted in desecration, injury, bloodshed, and death in a place that is a symbol of hope and unity.

“For the sake of our democracy, we urge the immediate end to the incitement of politically motivated violence and we pray for the restoration of order. We implore members of Congress and all other elected officials to speak out against violence in all forms. We ask that all involved in this unconscionable attack be held accountable. 

“We thank law enforcement for keeping our elected officials and their staff safe. We urge everyone, everywhere, to stand together for democracy and the rule of law and against political violence.”

In the weeks, months, and years ahead, we will see how the earth-shattering events of January 6, 2021 in Washington, DC, will be treated. At the very least, the incident will be seen as infamously as 9/11 or the Kennedy assassination. On January 6, we watched the arsonists fan the flames of disunity, division, divisiveness, and dangerousness, all in service of political ambition.

Despite the horror of the destruction, looting, injury, and loss of life at the hands of armed insurrectionists intent on hunting down elected officials and staff, people continue to push the lies that led to the mob attack on our democracy. Web chatter abounds and the FBI has confirmed that violent threats have been made about recreating the incident to coincide with Martin Luther King Day on January 18, and with armed protests on Inauguration Day on January 20, not just in DC, but at state capitols in all 50 states. Washington Mayor Muriel Bowser urged citizens to stay away from DC during President Biden’s inauguration, as protesters and hate organizations continued to promote terrorism and violence rather than the peaceful democratic process as a platform to settle political differences. Some wonder whether the attack on the Capitol was the end of the violence or the beginning of ongoing terroristic threats against Congress.

David Gergen, a political commentator and former adviser to four presidents, referred to January 6 as a “naked moment,” affording a rare open window into an embedded toxic legacy of white supremacy and racism in our society. I believe you can draw a straight line from January 6 all the way back to the conclusion of the US Civil War and forward through the reconstructionist aftermath of southern race riots, the establishment of Jim Crow laws, the Tulsa Massacre of 1921, the Ku Klux Klan, its resurgence in the 1920s, 1950s, and 1960s and its lethal violence toward Blacks and Jews, the John Birch Society, the 2017 Charlottesville riot, and the recent police killings of unarmed Black people.  While the US Civil War ended 150 years ago, the violence and the seething hatred beneath it all has not. It has survived attempts at reconciliation to remain a platform for ambition.

Have we entered an era where politicians place their political ambitions above the safety and welfare of our democracy, our institutions, and even the lives of our elected officials? Does the fomenting of disunity and division as a means of political control, and the anger, hatred, and spectacle that result from it, improve our government, our security, and welfare? We are watching raw, naked political ambition and the use of violence in pursuit of political power, not for the people, but for the acquisition of power itself.

What kind of politician would give voice to violence, violate their oath of office, and sacrifice the institution, its constitution, rules and laws, and the lives and livelihood of those who elected them to serve, all in the name of power and ambition?

The events of January 6 and the continuing threat of armed political warfare could not come at a worse time, against the background of a surging COVID pandemic, a slowdown in vaccine distribution, rampant unemployment, and the transition to a new pro-labor administration that holds promise for working people, and our union. In the face of this wave of political violence and disruption, never have we needed steady leadership, political stability, good governance, unity, and strength more than we do today.

At stake and at risk in our political process is the health and longevity of the American Federation of Musicians and Employers’ Pension Fund (AFM-EP Fund). Omitted from last year’s mid-year and year-end Congressional COVID relief bills were proposed legislative solutions including the Butch Lewis Act that would have restored the financial health of critically underfunded multiemployer pension funds, including AFM-EP Fund, with long-term, low-interest government loans. Under the proposed legislative relief, there would have been no benefit cuts for participants.

With a new administration and a new Congress with a Democratic Senate majority as a result of the Georgia January 5 runoff elections, the odds of adopting a meaningful pension relief package have risen dramatically. The lives of thousands of our members and retirees depend on legislative success. That success necessarily depends on bipartisan support for a healthy democracy and the prevention of governmental collapse.

Political chaos and rioting in Washington, DC, and across the country will not help make our lives better. Neither will the ambitions of politicians who would sacrifice their institutions, the rule of law, and their constituents’ welfare for the advancement of their own self-serving political interests. It’s bad for the country. It’s bad for the union, too.