President’s Message

As Easter weekend came amid the global pandemic, with virus infections on an upward curve and the spread accelerating across America, Canada, and the world, prayers of hope, healing, and redemption were part of the rituals of professional musicians and their families, all locked down in their homes, locked away from live interaction with their audiences, and locked out of their jobs. The weeks leading up to Easter were also marked by a flurry of interest in raising funds for entertainment industry workers—including professional musicians—whose jobs were among the first to disappear due to social distancing measures and emergency governmental restrictions, and who will likely be the last to return to gainful employment.

No sooner had the pandemic Easter celebration concluded than I received a call from Ray Chew, a distinguished member of Local 802, New York City, whom I met early on in my presidency during his benefit performance for Local 802’s Musicians Assistance Program. Later, I ran into Ray Chew again when ABC television attempted to downsize its orchestra and implement licensed pre-recorded tracks on Dancing with the Stars. And yet again, when our campaign for streaming residuals in film and live television kicked into gear last year, Ray Chew did not hesitate to stand up and speak out in support of his colleagues, his union, and musicians everywhere during the process.

Ray Chew is one hell of a musician. He recently celebrated his 10th season as music director for Dancing with the Stars. Previously, he served as music director for Fox TV’s American Idol, and Showtime at the Apollo. He has helmed award-winning musical events with Carrie Underwood, Rihanna, Aretha Franklin, Justin Bieber, Lenny Kravitz, James Taylor, and Quincy Jones, and has directed such prestigious events as the 2008 Democratic National Convention, the 65th Primetime Emmy Awards, the President’s Neighborhood Inaugural Ball, and Macy’s Thanksgiving Day Parade.

So when Ray Chew called, I answered and listened. Ray wanted to partner with the Federation to develop a four-part virtual series featuring a fundraising portal that would accept donations for relief funds to help AFM freelance musicians whose jobs were lost due to the COVID-19 lockdown.

“I want to do something to bring people together to raise funds for my musician brothers and sisters who are struggling right now because of the pandemic,” Ray said. “Freelance musicians are in an unprecedented crisis. The overnight loss of work has left thousands of musicians unable to pay their rent or buy food to feed their families. I am inviting my musical friends and fellow musicians to join me in putting together a series of shows that will bring us together to sing, perform, laugh, and share stories that will uplift us, inspire us and raise funds at this critical time.”

To help accomplish these vital and timely goals, I appointed a team of AFM staff to work with Ray, led by my assistant and former Local 802 president, Tino Gagliardi. Our team included International Executive Board member Dave Pomeroy (also president of Nashville Local 257), Secretary-Treasurer Jay Blumenthal, AFM counsel Jennifer Garner and Russ Naymark, Communications Director Rose Ryan, and Electronic Media Services Division Director Pat Varriale.

Jay and Jennifer worked with the AFL-CIO’s Union Community Fund to establish a sub-fund to accept tax-deductible donations for the benefit of AFM members. Dave, Pat, and Russ Naymark developed an appropriate media agreement and waiver option for use by the show to cover the performances of AFM and SAG-AFTRA members. Rose Ryan helped promote the series through social media and internal communications. In the space of little more than two weeks, the first of four fundraising “Ray Chew Live Freelancer Fundraiser” episodes aired at 9 p.m. EDT, Thursday, May 7, on Facebook Live. Additional episodes aired on successive Thursdays, May 14, 21, and 28.

Ray’s musical guests thus far (as of press time) have included performances by legendary jazz pianist Chick Corea, bassist Marcus Miller, P-funkster George Clinton, and interviews with TV newser Soledad O’Brien and New York Times best-selling author Iyanla Vanzant.

To donate to this special AFM Musicians Relief Fund, go to https://bit.ly/2ylzxs2 and enter the amount you wish to contribute. All donations are tax deductible.

The effort has raised thousands of dollars for freelance musicians. “We’ve raised awareness and lots of support for musicians in the industry who are suffering,” said Ray Chew. “I want to thank the person who gave one dollar, and also the person who gave a thousand dollars. I know they gave from the heart. When musicians have the opportunity to go back to work and perform again, it’s going to be great. I also want to thank my union for working to make this possible,” he said.

If you are a freelance musician and wish to apply for relief from AFM’s Musicians Relief Fund, go to https://bit.ly/3bOdw2F, download the application and follow the instructions.

Ray Chew rolled up his sleeves to help our members. On behalf of the entire membership of the American Federation of Musicians of the US and Canada, I want to thank him, his production team, AFM staff and the good folks at the AFL-CIO for their swift and exceptional response at a critical moment in the lives of musicians whose prayers of hope during Easter weekend may now be answered.

With the continued spread of the coronavirus outbreak, governments throughout the world have implemented various forms of lockdown, now affecting a third of the global population including the major cities of North America. The impact of the pandemic on musicians and performers, due to the ban on public gatherings, has shut down entertainment venues of all sizes, halted nearly all media production, and eliminated thousands upon thousands of jobs.

The live entertainment industry has gone dark. In the freelance gig economy, we are 100% unemployed. Under emergency governmental restrictions, we are unable to publicly perform. The virus has locked us out—employees, employers, and audiences alike. We are all in limbo. No one knows when or where the infection curves will “flatten.” No one can tell us with any degree of certainty when restrictions will be lifted. No one can say when our communities will be deemed safe enough to risk restarting non-essential businesses and performance venues with the resumption of live entertainment.

Today, as we ride out this deadly virus, we are in uncharted territory. Nobody—the musicians in the gig economy, the promoters, the audiences who support us—none can hazard a guess where or when the venue doors might re-open. Where will the next paying live gigs be? What will they look like? Fear is the stalking horse of uncertainty.

More broadly though, what short- and long-term consequences will we endure from this severe economic shock, and how will we recover? Will we return to our level of pre-shock earnings and productivity? Will the social distancing legacy of the COVID crisis choke economic activity in the live entertainment sector? If so, it could adversely affect our workplaces—the theaters, the concert halls, the convention dates, the nightclubs, the bars and restaurants.

In every economic downturn, winners and losers emerge. How will our employers and those who control our work behave toward us as the lockout ends and the economy comes back to life? Will employers see a window of opportunity from depression-level unemployment to depress wages, extend profit margins, and gain more power over musicians’ lives?

These are hard questions for hard times. Our individual and collective strength will be tested as the pandemic eventually recedes. The decisions we make as the smoke clears may profoundly shape the rest of our lives.

While musicians are sheltering in place, venues closed, worried about the next gig and long-term shifts in live entertainment spending, there remain some positive relationships between musicians, employers, and the Federation as of this writing, April 20. I hope they will outlast the coronavirus.

Symphonic

There are no symphonic concert performances, but the majority of the 52 major US symphony orchestras affiliated with the International Conference of Symphony and Opera Musicians (ICSOM) are continuing to pay rostered musicians in accordance with agreements governing the shutdowns negotiated with their respective local unions. Some agreements continue wage payments into the summer.

Touring Theatrical Musicals

A total of 23 Pamphlet B and Short Engagement Tours were suspended during the week of March 15. Together with other workplace unions, the Federation negotiated a shutdown agreement with the Broadway League covering touring employees providing for cancellation payments and necessary expenses for musicians to return home. The unions are expected to meet and discuss workplace issues in connection with the resumption of touring production prior to the end of suspensions.

Motion Picture/TV Film/Live Television

Film producers and TV networks halted all production in mid-March. Company heads are now in discussion about easing back into production and what content to show in a society changed by the pandemic. Despite the hiatus, some films and dramatic TV series had finished production before the emergency declarations. Scoring sessions have continued for those shows with the Federation facilitating contract applications during the crisis (also applicable in sound recording) for the use of remote recording sessions, where individual musicians perform simultaneously, captured alone in safety, but all mixed together for the soundtrack master. In live TV, the late-night bands have continued to be paid, with some shows hosted live, and others remotely, using clips from previous episodes. Primetime TV shows like The Voice are airing prerecorded shows. Musicians in live TV production receive substantial payments for re-runs.

Sound Recordings

With the proliferation of home studio technology, remote recording sessions have continued and are being processed through the Federation’s Single Song Overdub Agreement and Sound Recording Labor Agreement remote recording applications for use during the crisis.

Commercial Announcements (Jingles)

While slowdowns in local and regional media advertising have taken hold, national accounts are continuing to advertise via online and traditional media. New original sessions will likely decline short-term, with increased use of licensed pre-recorded content such as legacy sound recordings. Musicians whose performances are embodied in original and licensed recordings will receive new use and reuse payments as ad cycles continue.

The pandemic and its social distancing regimen will alter how consumers consume, work, and play. In America, the virus has killed over 46,000 people in just two months. It has also killed businesses and it has killed our jobs.

Live musical performances are social by their very nature. Through our performances, we are social and cultural drivers. The disease has already caused the adoption of unfamiliar ways of doing business, but it won’t stop the power of our music. And it won’t stop our union. When the lockout ends, we will adapt, we will perform, and we will thrive.

As of the date of this writing, March 21, the entertainment industry throughout the world, with few exceptions, has been shut down. Today, emergency governmental stay-at-home orders have been issued in New York, Connecticut, Illinois, and California, affecting 75 million Americans. A national emergency declaration issued on March 13 placed severe restrictions on public and private gatherings, effectively eliminating audiences; canceling concerts and shows for every symphonic, opera, and ballet orchestra in the US and Canada; shutting down festival performances; and closing live venues of every size. Thousands of gigs that otherwise would have been performed were wiped out. TV networks ended all live television production except news. All other media production has been postponed.

Broadway, Las Vegas casinos, and every other showroom, right down to neighborhood restaurants and bars, are dark. Touring theatrical productions have either closed or shut down pending an all-clear signal for audience gatherings. The threat to the entertainment industry across North America and worldwide, to the business it creates and musicians it employs, could stretch beyond these immediate days and have disastrous consequences for months or years to come. As the disease began its spread here, your union took immediate action to safeguard our staff, provide advice and counsel to our locals and our members, while negotiating with signatory employers to preserve and protect employment, extend health benefits, and return touring musicians safely to their homes.

Federation offices—in New York, DC, Toronto, and Los Angeles—are located in the current epicenters of COVID-19 infections. We got ahead of the situation on March 12, implementing work-from-home plans for most staff, and staggering hours for essential staff in all Federation offices, which were eventually shuttered due to additional emergency orders.

Federation staff has risen to the occasion, working around the clock to design and implement new streaming provisions for use to keep live performances alive, to preserve employment. Legislative Director Alfonso Pollard and I have been in direct contact with Congress to push for immediate relief for members who have borne the brunt of these shutdowns. We will not rest until we achieve this goal.

I’m dedicating the balance of my column space this month to accommodate special coverage of the Federation’s response to the crisis. As the outbreak continues, I will communicate frequently via Federation-wide email blasts. Please stay safe. My prayers are with each of you.

To view the article on this month's special coverage on COVID-19, click here.

As many of you
know, on December
30, 2019, the AFM-EPF Trustees filed an application to reduce benefits under
the Multiemployer Pension Reform Act (MPRA). The decision was reached after the
trustees had engaged in more than two years of difficult discussions. The
reductions are projected to allow the Fund to avoid insolvency and preserve a
meaningful benefit for Fund participants and their beneficiaries. Far more
drastic benefit reductions would result if the Fund were to become insolvent.

More
work is needed in order to strengthen the Fund, particularly by bargaining
improvements in employer contributions into the Fund, as the Federation has
done over the past several years, and by earning good investment returns, as we
have since the 2008-2009 financial crisis—an average annual return of nearly
9%. But the benefit increases that were adopted repeatedly through the 1990s
and other generous benefit features provided by the Fund have ultimately proven
unaffordable after the 2001 dot-com bubble burst and the 2008-2009 financial
crisis. This has left us no alternative but to reduce benefits in order to keep
the Fund solvent for future generations of participants.

The MPRA application is a very long and complex document, running over 1,500 pages. You can review it on the US Treasury website at www.treasury.gov/services/Pages/American-Federation-Of-Musicians-And-Employers-Pension-Fund.aspx, but in this month’s column, I will summarize the main features of the proposed benefit reductions and answer some questions we have received from a number of participants.

There
are three underlying principles in our proposed reduction plan: level the
playing field, protect the $1 multiplier, and minimize benefit reductions as
much as possible.

Removing the Subsidies and Other Costly Features

The
first principle involves leveling the playing field by reducing costly benefits
and features of the plan that are richer than the regular pension benefit
payable at age 65. These include the early retirement subsidy and certain other
generous plan features that the trustees considered to have the same effect as
subsidies. The trustees decided that the fairest way to distribute the
reductions was first to eliminate the subsidies and other costly features that
are not applicable to all participants. That allowed us to minimize the
reductions to multipliers other than the $1 multiplier, which we decided to
protect, without any reduction.

As
we have informed participants, the flat percentage cut to the multipliers above
$1 was 15.5%. If we had not removed the early retirement subsidy (which only
those who started to collect before June 2010 have been eligible to receive),
the flat percentage cut for multipliers above $1 would have been 17.3% instead
of 15.5%. Since the regular pension benefit—the age 65 benefit—is the Fund’s
core promise, we determined that it was fair to protect that to the maximum
extent possible.

There
have been lots of questions about the early retirement subsidy. An early
retirement benefit is “subsidized” if it is not reduced as low as the actuarial
equivalent amount that would cost the plan the same as the regular pension
benefit payable at age 65 over the expected lifetime of a participant. Because
the benefit begins earlier, it is payable for a longer period of time and, over
thousands of participants, the costs quickly become significant. And, because
the money is being paid earlier, the Fund cannot earn investment income for
those years prior to normal retirement age.

For
Benefit Period A (through 12/31/2003) at age 55, the multiplier was $2.33 for
retirements before June 2010, while the unsubsidized multiplier that went into
effect for retirements on and after June 1, 2010 was only $1.70. The $2.33
multiplier is subsidized because it is 37% higher than the $1.70 multiplier.
This means that the early retirees who started collecting before June 2010 are
receiving more than the actuarial value of their age-65 benefit.

Like
many other Taft-Hartley funds, the AFM-EPF has offered a subsidized early
retirement benefit since at least 1972. However, the Fund can no longer afford
this subsidy. The trustees also determined it would be unfair to continue this
subsidy for those who are receiving it and who retired before June 2010 because
it was already taken away from everyone else, even those who worked prior to
2003 while the subsidy was in effect, if they did not retire before June 2010.
Moreover, those who will lose their early retirement subsidy by the 2021
effective date of the change if the application is approved will have already
received the subsidized early retirement benefit for 10 years, and in some
cases many more years. The Fund is not taking back that “excess” value. The
trustees are very aware that this change, as well as other changes described
below, will adversely affect the retirement benefits for a number of
participants, but we believe that eliminating subsidies is the most equitable
way to distribute the benefit reductions.

The
proposed reduction plan also removes certain other generous, subsidy-like
benefit features in order to reduce benefit costs, help preserve the $1
multiplier, and minimize the flat percentage reduction. The two most prevalent
and expensive are the re-retirement benefit and the re-determination benefit.

The
re-retirement benefit is the additional benefit participants earn if they
retire before age 65 and then return to work. It is a very unusual benefit for
a pension plan. Under existing rules, when such a retiree reaches age 65, the
total benefit is recalculated as if the individual were first retiring at age 65,
using the age-65 multiplier for all benefits. That amount is then reduced to
reflect the early retirement benefits actually paid to the person during the
years before age 65. The existing methodology produces an increased benefit
that is like a subsidy because it provides a larger re-retirement benefit when
compared to the benefit based solely on the new contributions earned during
post-retirement employment.

If
the proposed MPRA application is approved, re-retirement benefits would be
calculated based only on the contributions earned after the early retirement
pension begins, until age 65. For virtually all musicians not yet in pay
status, the re-retirement benefit for service in and after June 2010 will use
the $1 multiplier for contributions credited after the person’s early
retirement through age 65, which amount will be added to the amount of the
early retirement benefit, and adjusted for the forms of benefit selected.

Another
costly benefit that would be modified if the application is approved is the
re-determination benefit. The re-determination benefit is the additional
benefit that a musician earns by working in covered employment after age 65 and
after starting to collect a pension. Currently, the re-determination benefit is
based on contributions received in the prior calendar year, reduced by the
value of all re-determination benefits received in the year before that. Many
pension plans do not permit participants to receive pension benefits while also
earning additional pension credit. Under the proposed MPRA suspension,
participants will still be able to return to work after age 65 while receiving
their pensions, but their re-determination benefits will be offset by the total
amount of all benefits already received from the Fund, rather than just the
re-determination benefits in the year before. If the application is approved,
current re-determination benefits will be reduced to $0, and re-determination
benefits after January 1, 2021 will likely not result in any additional
accruals.

Protecting the $1 Multiplier

The
trustees concluded that the fairest way to design the proposed reduction plan
was to protect the $1 multiplier from any reduction. We believe this is of
paramount importance in order to maintain Fund support from active participants—those
who are still employed and earning contributions but not yet retired. We know
that the $1 multiplier, which has been in effect since 2010, is not a rich
benefit. But it can provide a meaningful benefit payable over a lifetime
starting at age 65. We also know that further reductions to this already
reduced amount would jeopardize not only ongoing contributions, but also
increases to contributions, which are critically important to the Fund.
Eliminating the subsidies and the costly features that are effective subsidies
helped us maintain this basic benefit.

Minimizing the Flat Percentage Reduction

After
eliminating the subsidies, the central feature of the proposal is a flat 15.5%
reduction to all multipliers other than the $1 multiplier. Each of the higher,
pre-2010 multipliers would be reduced by 15.5%, although various statutory
protections apply to different participants, resulting in either no reductions
for some participants or reductions for many that amounted to less than 15.5%
in total.

Benefit
estimate statements were mailed to all participants on January 6. These
statements provide participants with current and estimated future reduced
benefits, if the MPRA application is approved and plan reductions become
effective. We know that the information included on the statements does not
provide the detailed calculation of your estimate. If you wish to receive a
statement that will include all calculation details, you can call the Fund
office at 212-284-1311 and request a detailed statement. When your detailed
statement is available, it will be posted to the benefit estimate icon in the
registered participant’s portal on the plan’s website. You will be advised by
email that it is available or you can request a copy to be sent in the mail to
you. Fund representatives will walk you through it and help you understand the
detailed calculations.

Removing
the subsidies is painful, and will be difficult for many participants, but the
regular pension benefit, that is, contributions from the $1 multiplier payable
at age 65, is the core promise of the Fund. We believe it would be unfair to
reduce that benefit or to reduce the other multipliers even more in order to
maintain the early retirement subsidy and other costly features that the Fund
can no longer afford.

No Easy Choices

The trustees agonized over decisions that we knew would affect the lives and families of thousands of participants, and we struggled over how to make those decisions in a fair and equitable manner. The trustees capped the MPRA reduction so that, even with the elimination of the subsidies, no individual benefit would be reduced more than 40%, and, as it turned out, the cap applied to only 0.35% of participants. The law provides protection for participants who receive smaller benefits, for disability pensions, and for people who are over 75 years of age.

The vast majority of the plan’s participants had either no reduction or a smaller than 20% reduction.

Here
is a breakdown of numbers of participants and percentage of benefit reductions:
The total number of Fund participants is 50,782. Of that number, 27,099 either
earned all their credit at the $1 multiplier or were protected by law and
received no benefit reduction. This meant that the money to address the
problem of fund sustainability had to come from the remaining 23,683
participants. Of those, 11,483 received a reduction of 0%-9%; 11,270
received a reduction of 10%-19%; 374 received a reduction of 20%-29%; 376
received a reduction of 30%-39%; and 180 participants received a reduction of
40%. 

Finally,
given the choice of preserving the Fund or letting it become insolvent, the
trustees chose to propose a benefit reduction plan that adjusts benefits in the
fairest way possible under the circumstances to allow the Fund to continue to
serve past, current, and new participants into the foreseeable future.

As previously reported, new streaming and licensing
revenue from the sound recording industry via the Federation’s 2017 Sound
Recording Labor Agreement (SRLA), has infused new money into the AFM-EP Fund
and has revitalized both the Sound Recording Special Payments Fund (SPF) and
the Music Performance Trust Fund (MPTF). MPTF, throughout its more than 70-year
history, has worked closely with officers and staff of AFM locals to co-sponsor
thousands of live, admission-free musical performances each year throughout the
United States and Canada.

MPTF was nearly out of money in 2016 and was forced
to plan for the unwinding of its operations and the eventual cessation of
business, pending the outcome of our negotiations with the labels. The problem
was the changing trends in music consumption. From its inception in 1944 in
settlement of a strike with the record labels, MPTF revenue was derived from a
small royalty on sales of physical product, such as vinyl records, cassette
tapes, and compact discs. Today, with 90% of label revenue attributable to
streaming, MPTF and SPF would be out of business without streaming royalties to
replace and reverse the decline in revenue from physical product.

Here is the good news: By the March 31, 2020 close
of its current fiscal year, MPTF will have provided over $1 million in
co-sponsorship funding during that 12-month period, compared to less than
$500,000 in funding during the 2016 period. MPTF Trustee Dan Beck has advised
that the April 2020 funding allocations will continue to rise due to the growth
of streaming revenue.

The favorable developments concerning future MPTF
funding underscore the need for locals and their members to work together to
develop popular, successful performance programs that will benefit your
community and generate new employment. Dynamic and diverse programs will build
appreciative audiences, and promote recognition for MPTF, the Federation, our
locals and our members year after year. A great local MPTF program works
wonders for membership recruitment and retention.

A well-rounded local MPTF program is built by
fostering a variety of constructive, enduring relationships with producers of
admission-free public events and with schedulers of entertainment for
institutional purposes, such as hospitals and assisted living centers. Local
community-based institutions, arts and civic organizations, neighborhood
associations and entities that manage entertainment events and recreational
programs for city parks, indoor and outdoor shopping malls, and suburban town squares,
are always on the lookout for dependable partners that can provide first-rate
talent for events that will promote goodwill for their venues.

How can you identify potential MPTF co-sponsors in
your area? Your local city, county, and state arts councils are a good place to
start. Arts councils, many funded in part by the National Endowment for the
Arts, provide foundational support for community-based arts organizations,
including some that may offer admission-free programs of professional musical performances.

A big buzzword in the arts council world is
“collaboration.” The prospect of access to MPTF funding could encourage arts
council officials to promote partnerships with locals and community affiliates
for the presentation of public musical performances.

Visit with your area shopping malls, neighborhood
associations, shop owner “main street” associations, and city parks and
recreation departments. Invariably, there is someone employed by those
organizations to create free entertainment programs for the enjoyment of
patrons and citizens of their communities. Find out who selects the musical
offerings for those programs and contact them to pitch the obvious benefit of
MPTF co-funding and local union talent. Any program coordinator juggling an
entertainment budget will listen intently when it dawns on them that not only
can you deliver first-rate talent, you’ll also help them pay for it.

Another area of interest is the promotion of
MPTF-funded programs of musical performances by professional musicians in
public schools. A programming opportunity may arise if an established ensemble
of professional musicians seeks to partner with a public school system to
present concerts for elementary, middle school, and high school students in the
public schools. MPTF can help where public school budgets have limited or no
money for such programs and, particularly, where music department directors and
school superintendents understand the educational benefit of enabling students
to see and hear musical performances presented by outstanding professional
musicians. In-school concerts by suburban symphony orchestras, jazz ensembles
and big bands, and other musical styles are another creative way to introduce
the community to the advantages of MPTF co-sponsorship.

Community leaders are always seeking recognition.
They receive it by sponsoring and promoting public events where families can
come together and enjoy good music in a community setting—the park, the town
square, the mall, the neighborhood, the school auditorium. Not only do we
perform the music, but, through MPTF, we can help our communities afford it.

Go out into your communities and look for opportunities to
apply the MPTF advantage. Build a balanced performance program by establishing
productive institutional, community-based, and business-related partnerships to
bring fine musical performances to an appreciative public. Build a program that
builds audiences, and every musician in town—and your community—will beat a
path to your door.

Legendary jazz drummer and University of North Texas
Professor of Music Ed Soph leads an MPTF project performance in Denton,
Texas, at the Denton Arts and Jazz Festival. He was accompanied by UNT jazz
faculty colleagues Mike Steinel, trumpet, and Rosana Eckert, vocals. All are members
of Local 72-147 (Dallas-Fort Worth, Texas).