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President’s Message


Ray Hair – AFM International President

    The AFM-EPF and the Multiemployer Pension Crisis

    The United States currently faces a worsening multiemployer pension crisis. One recent report estimated that 114 multiemployer pension plans across the country will become insolvent over the next two decades. These plans cover nearly 1.3 million people and they are underfunded by more than $36 billion. The American Federation of Musicians and Employers’ Pension Fund (AFM-EPF, “the Fund”) is not immune to the forces driving this crisis.

    The AFM-EPF, like many other multiemployer funds, was a robust, healthy pension fund through the late 1990s. In fact, our fund was actually overfunded, meaning that assets exceeded liabilities (promised benefits to participants for service already performed). Simply put, the Fund had more money on hand than it was projected to need to pay out as benefits in the future. In 1999, the AFM-EPF was 139% funded.

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    Motion Picture and TV Film Agreements: One-Year Deal, 3% Raise

    I am pleased to report that on March 9, after a week of intense negotiations, an agreement was reached with major Hollywood-based film producers and their television film counterparts to extend the existing Theatrical and Motion Picture Film Agreements for one year with a 3% increase in wages. Upon ratification, the extension and wage increase will become effective April 5, 2018.

    The short-term contract solution was seen by both sides as an acceptable alternative to a positional deadlock that arose from the producers’ reluctance to address two important Federation bargaining objectives—the improvement of existing residual payment obligations when theatrical and TV films are streamed and the introduction of streaming residual payments when films are made for initial release on streaming platforms.

    The parties—the Federation on one hand and the producers, represented by the Alliance of Motion Picture and Television Producers (AMPTP) on the other—actually negotiate two separate agreements simultaneously, which become effective and expire concurrently. One covers the production of theatrical motion pictures and one covers television motion pictures initially released on free television.

    Despite the studios’ unwillingness to settle our key issues, and despite the tensions that were present (as they are in practically all negotiations, which by nature are consistently adversarial), the negotiating environment was decidedly different in this round compared to the last, where an agreement was reached after six rounds of bargaining spanning more than two years.

    This round, members of our team held meetings with bargaining unit musicians and representatives of other workplace unions well in advance of the bargaining sessions. Our team diligently researched and analyzed information necessary to formulate reasonable Federation proposals that would address musicians’ concerns over the rapid rise of viewer consumption of theatrical, TV film, and made-for-streaming productions on advertiser supported video streaming on-demand (AVOD) and subscription-based video streaming on-demand (SVOD) platforms.

    Every round of negotiations has a theme that dominates. The challenges we faced in this round were different from the previous round, but no less important. In the previous round, the prevailing themes were clip use, the banking of scoring hours associated with certain domestic and foreign productions, and language updates to the Film Musicians Secondary Markets Fund (FMSMF). This round was dominated by streaming.

    The Federation obtained coverage for new media in 2010. The term “new media” made sense to the entertainment unions a decade ago, after the 2008 Writers Guild strike, when it was coined to describe the online exploitation of recordings. In our film agreement, it refers to products made under the theatrical and television film agreements that are eventually streamed, and the making of original productions for digital (streaming) distribution in the first place. Hulu, Amazon, and Netflix are now producers and distributors of products we used to call “movies” and “TV shows.”

    As musicians, we can only feed our families and make a decent living, if we get paid fairly for our work. There are two components to that scenario—original session payments and FMSMF distributions. As entertainment consumption has shifted toward on-demand platforms, the Federation is rightfully concerned about how musicians will be paid in the digital future. We are determined to engage the film industry on these issues, drive a fair bargain, and obtain a fair agreement for our members.

    That said, the atmosphere in these negotiations was also decidedly different. Animosity from the conclusion of the previous round had subsided. In its place was an attitude of real respect. That difference, I believe is a product of the Federation’s program of contract compliance and enforcement toward these agreements.

    Six weeks after the 2015 film contracts were ratified, the Federation sued every major film studio, either for offshoring union jobs or for clip use violations, and some were sued for both. From those suits, we’ve collected money for our members and we’ve busted several of the studios for flagrant violations of domestic scoring obligations. Today, there is only one pending action against the producers. We will prevail on it, and they know it. They also know that, if our agreements are violated and no settlement is forthcoming, we will proceed directly into court against them.

    There is another factor that changed the negotiating atmosphere for the better—our side was extremely organized, well prepared, and completely, totally unified.

    In the meantime, the Federation will engage in negotiations with the media industries, we will follow the pattern examples of our sister entertainment unions, and we will aggressively bargain our digital future.

    I want to take this opportunity to offer my sincerest thanks to the many talented musicians, members of the AFM International Executive Board, and local union officers and representatives who spent countless hours working to identify, articulate, and prioritize workplace issues in advance of the negotiations. I would like to especially thank the small group we put together during the negotiations—Local 47 (Los Angeles, CA) President John Acosta; Local 47 Vice President Rick Baptist; Local 257 (Nashville, TN) President Dave Pomeroy; Local 802 (New York City) President Tino Gagliardi, Recording Musicians Association (RMA) President Marc Sazer, and rank-and-file representative and RMA Secretary Steve Dress.

    We had the benefit of superb legal representation from Federation in-house counsel Jennifer Garner and Russ Naymark, and outside counsel Susan Davis of Cohen, Weiss, and Simon. Lastly, my thanks go to Electronic Media Services Division (EMSD) Director Pat Varriale, EMSD Contract Administrator Matt Allen, and all the hardworking Federation staff for their valuable contributions throughout the process.

    We will reconvene these film negotiations in one year. It’s another opportunity to adapt, advance, and achieve improvements for the finest musicians in the world. I can’t wait.

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    New International Representative, TV Negotiations Update

    I am pleased to announce that Dave Shelton, former president of Local 554-635 (Lexington, KY), has become the newest member the Federation’s staff as an International Representative (IR), filling a field position that became vacant May 2017 with the departure of Barbara Owens.

    International Representatives are the first line of help and assistance for local officers in matters pertaining to day-to-day operations and governance issues in running a local. They are readily available to assist local officers with onsite training, preparation of operating plans, budgeting, and compliance issues relative to AFM Bylaws and Department of Labor regulations. IRs are a resource for the development and application of local bylaws, mergers, membership rosters, newsletters, membership meetings, and elections.

    New AFM International Representative for Midwest Territory Dave Shelton

    Dave Shelton is uniquely qualified for service as an IR with his broad experience as a versatile professional musician and as a local officer, symphonic negotiator, orchestra committee chair, union steward, and AFM conference officer. An outstanding musician with many years of orchestral horn and jazz piano performance experience, Dave graduated summa cum laude in 2007 from one of the world’s most respected music schools, the University of North Texas (UNT), with a Master of Music degree in Jazz Studies. At UNT, he served as a teaching fellow and a jazz lab band director. Prior to his study at UNT, Dave earned his bachelor’s degree at the University of Kentucky. He has performed as fourth horn with the Lexington Philharmonic Orchestra for nearly two decades, and also serves as pianist and arranger for that orchestra’s pops series.   

    During his years of service as a local officer with Lexington Local 554-635, Dave excelled in fundraising and development activities, public relations, collective bargaining, and contract negotiations. He was elected as an officer of the Regional Orchestra Players Association (ROPA) in 2016, and currently serves as its vice president.

    Dave now joins IRs Allistair Elliott (Canada), Wally Malone (Western Territory), Cass Acosta (Southeast Territory), and Eugene Tournour (Northeast Territory) who are each assigned a geographic territory of individual locals to maintain regular contact and visitation. The IRs’ activities are coordinated by Assistant to the President Ken Shirk, who is based in our West Coast Office, located in Burbank, California. We are delighted to welcome Dave as the newest member of the Federation’s staff. I know he will do an excellent job.

    TV Negotiations Update—Respect the Band!

    The Late Late Show band, members of Local 47 (Los Angeles, CA), (L to R) Tim Young, Hagar Ben Ari, Guillermo Brown, Reggie Watts, and Steve Scalfati demand fair pay when their work is streamed online.

    On December 15, 2017, the Federation resumed discussions in Los Angeles with representatives from CBS, NBC, and ABC toward a successor agreement covering the services of musicians engaged to perform on live television. Despite three rounds of negotiations, which began 18 months ago, the talks have been deadlocked over the networks’ refusal to bargain over the Federation’s proposals for progressive payment terms for advertiser-supported and subscriber-based streaming of live and on-demand TV. Our proposals for better terms for musicians engaged in the production of live television programs made for initial exhibition on streaming platforms such as Netflix, Amazon, and Hulu were also rebuffed.

    Despite the networks’ stonewalling, our team was determined to break the bottleneck and find ways to turn up the heat. At my request, AFM Organizing and Education Director Michael Manley, together with organizers from Local 802 (New York City) and Local 47 (Los Angeles, CA), Recording Musicians Association President Marc Sazer, and player representative Jason Poss of Local 47 worked to develop a plan of action by arranging a series of meetings with musicians working on late night shows, award shows, and prime time variety shows. The musicians identified, discussed, and prioritized issues surrounding the producers’ lack of additional payment when their performances are free to watch online.

    A concerted campaign with a catchy name, #respecttheband, emerged from those meetings and quickly gained traction. As the December negotiations got underway in Los Angeles, audience members waiting in line outside the studios on both coasts received leaflets outlining the issues. Musicians from the bands inside released statements to the press speaking out about producers’ lack of respect and fair treatment when their performances are streamed.

    The Late Late Show with James Corden musicians released a photo from their green room displaying a #respecttheband banner.

    “Other performers are all paid when Jimmy Kimmel Live! streams on YouTube or other online outlets, yet musicians are paid nothing. Musicians just want to be compensated for our likeness and our music,” says Cleto Escobedo III, musical director of Cleto and the Cletones. “I love Jimmy, the producers, and everyone we work with. We just need to make sure the networks treat us and all of our colleagues fairly.”

    “This is about fairness. It’s a travesty that musicians are being treated this way. We are just asking the networks for a little respect—and the networks can certainly afford to treat musicians with the respect we deserve,” says Harold Wheeler, who is well known in the Broadway and recording scene and will be the Oscar’s music director in 2018 for the third consecutive year. He was also the original Dancing With the Stars music director.

    Amen to brothers Cleto Escobedo III and Harold Wheeler, the Corden band, and our organizing team of highly motivated AFM staff, local officers and staff, and dedicated player representatives—bravo!

    With a publicity push from AFM Communications Director Rose Ryan, the musicians’ concerted activities in support of their bargaining objectives received extensive coverage in Deadline Hollywood and Variety.

    As a direct result, the networks have now agreed to engage and negotiate over the Federation’s proposals for fair and equitable compensation when musicians’ performances are streamed. Our next round of TV talks will occur this spring.

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    Big Radio: Deal with Us on Performance Rights Before It’s Too Late

    If you’ve been tuned in to the Federation’s congressional lobbying efforts, you know that our campaign for a performance right in AM/FM analog radio has been at the top of our legislative agenda for many years.

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    Media Talks Driven by Streaming Growth, Part 2

    This is the second of two articles on the continued rise of streaming and its effect on Federation media industry negotiations. Read the first here

    Last month, we discussed the Federation’s January 2017 deal with the sound recording industry, where major record labels agreed to earmark a percentage of domestic and foreign streaming revenue toward the American Federation of Musicians & Employers’ Pension Fund (AFM-EPF), Music Performance Trust Fund (MPTF), and the Sound Recording Special Payments Fund (SPF). We also discussed the skyrocketing growth of streaming revenue from recorded music, which now accounts for 62% of total record industry income.

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