President’s Message

The Federation will meet with sound recording industry representatives this month to continue discussions toward a progressive successor Sound Recording Labor Agreement (SRLA). The existing predecessor agreement covered the period February 1, 2017, through January 31, 2020. It was extended by written agreement between the parties on the eve of the deadly COVID-19 pandemic that swept across the world, eliminating in-person negotiating sessions and affecting traditional business models in the production and consumption of media content and live entertainment. The 2017 agreement continues in full force and effect until a new agreement is reached.

That current agreement was bargained in six separate, difficult rounds beginning in September 2015 until its conclusion in February 2017. The Federation’s hard-fought gains in the negotiations leading to the current SRLA included ensuring that the Sound Recording Special Payments Fund (SPF), Music Performance Trust Fund (MPTF), and American Federation of Musicians and Employers’ Pension Fund (AFM-EPF) would receive sizeable payments, securing a portion of industry’s revenue from its exploitation of recordings through interactive streaming and licensing.

Leading up to the 2015-2017 negotiations, a two-decade slide in recording industry revenue had leveled off. However, physical product sales, which had continued to provide a small royalty to both SPF and MPTF, had been drastically reduced. Digital download sales, which benefitted SPF only, had declined as well. The consumption shift toward interactive and noninteractive streaming had begun. This business model represented solid revenue growth for the music industry. The Federation saw the industry’s new and growing revenue model as way to preserve and protect SPF, MPTF, and AFM-EPF, each of which, like the industry, had suffered from decades of decline in the music business, and the near-extinction of physical sales.

In addition, the Federation bargained innovative new use licensing provisions to further benefit MPTF, SPF, and AFM-EPF. Broadening existing provisions for licensing sound recordings into consumer products and consumer sync licenses on the internet, the Federation expanded nontraditional licensing provisions. This included licensing into podcasts and webisodes (excluding made-for-internet television programs, which require traditional new use payments), mobile applications, and life cycle videos (weddings, bar/bat mitzvahs, etc.), and foreign use.

Those additional licensing provisions with revenue percentages allocated toward strengthening MPTF, SPF, and AFM-EPF, together with revenue from the music industry’s subscription-based, on-demand streaming distributions, have produced a demonstrable positive impact on the financial viability of those benefit and residual funds. Instead of risk from financial uncertainty, the road ahead appears far more encouraging.

Soon, the AFM-EPF will apply for Special Financial Assistance (SFA) from the Pension Benefit Guarantee Corporation (PBGC), made possible under the provisions of the American Rescue Plan Act (ARPA). SFA funding, together with the streaming and licensing income afforded to AFM-EPF by the provisions of SRLA, are expected to restore the health of the fund through 2051 and beyond. Legacy benefit payments due current retirees will be safe and secure. New musicians who have begun their performing careers, when vested, can look forward to receiving a pension benefit payment upon reaching retirement age.

At the close of 2016, MPTF was on life support, with practically no further royalty income available to fund free public live performances due to the steep decline in its only source of income—sales of physical recorded product. The MPTF was set to wind up its operations unless a new source of income could be found. In 2023, MPTF will allocate $2.5 million in support of performances throughout the US and Canada, thanks to the 2017 SRLA. What an improvement.

Also in 2016, SPF was suffering similar declines in royalty payments from downturns in sales of physical products, digital downloads, and ringtones. Today, with the additional negotiated SRLA revenue, total special payment distributions to musicians working under the terms of the SRLA have tripled. SPF distributions will continue as a real incentive to encourage musicians to demand AFM coverage of sound recording sessions.

We were able to achieve these important SRLA contract improvements in 2017, together with increases in wages, pension contributions, and health and welfare payments because of the solidarity we brought to the table. The Federation, local officers, player conferences, and rank-and-file representatives all worked in unity to focus on growing all sources of industry income and creating new ones that would benefit our musicians, and the funds upon which they rely.

A resumption of in-person bargaining sessions this month will provide an opportunity to continue the trend established in 2017, with advances in wages, pension, and health and welfare contributions, and support for MPTF, SPF, and AFM-EPF.

I also want to extend to each of you my very best wishes in every way for a happy, healthy, and productive new year!

Part 2 of 2: Last month, my column discussed how former AFM President James Petrillo’s proposals to end two strikes against US recording companies—in 1942 and in 1948—led to the establishment of the Music Performance Trust Fund (MPTF).

This month, I will describe how MPTF became a royalty feature of other major Federation media agreements, and how it was eventually restructured to create the AFM US and Canadian pension funds and royalty and reuse funds that are attached to the Federation’s Sound Recording, Motion Picture Film, Television Film, and TV and Radio Commercial Announcements (jingle) agreements.

The settlement of the first strike in 1944 led to a 2.5% royalty obligation on the record labels’ gross revenue paid into a fund known as the Recording and Transcription Fund, which was located in the AFM’s treasury. Those payments accumulated $4.5 million through 1947 and were distributed on a per capita basis among all locals across the US and Canada for use in arranging admission-free public performances of live music.

The Taft-Hartley Act, passed by Congress in 1947, forbade employer payments to unions except for joint health and welfare funds and pension funds. It made the Federation’s trust fund illegal, as it was originally set up.

In January 1948, the Federation called another strike in response to the labels’ refusal to explore legally permissible ways to continue the trust fund. Lasting 11 months, the second strike was resolved when agreement was reached to establish the Music Performance Trust Fund as an independent entity, jointly overseen by the Federation and the recording industry.

The parent firms of RCA Victor and Columbia record labels—the National Broadcasting Company (NBC) and the Columbia Broadcasting System (CBS)—were the last holdouts in settling the 1944 strike. They were concerned that any such royalty arrangement would spread to their broadcast divisions. That turned out to be an accurate prophesy. In its first fiscal year ending June 30, 1950, revenue for the newly reconfigured MPTF was received solely from recording and transcription industries. Payouts to musicians that year totaled $900,000.

As 1952 dawned upon the phonograph, television, and motion picture industries, four distinct trust funds were consolidated into the MPTF, which received percentages of industry revenues as follows:

•3% from record sales

•5% from movie producers’ release of theatrical films to television

•5% from producers making films exclusively for television

•$100 per spot from producers of jingles in radio and television

By the end of the 1950s, with income multiplied by the three additional funds, annual disbursements would reach $6.325 million. Total funding from MPTF jobs over the entire decade of the 1950s would exceed $28 million.

In spring 1958, Petrillo announced his decision to forgo nomination as president at the forthcoming June AFM Convention in Philadelphia. He recommended the delegates choose Vice President Herman Kenin of Portland, Oregon, as his successor. Kenin was elected as the AFM’s fourth president in a landslide vote.

Kenin went to work bargaining successor industrywide agreements in the sound recording, motion picture film, television film, and jingle industries, with the prospect of reducing the employers’ trust fund obligations, in favor of developing pension benefits and residual payments that could supplement musicians’ income from original session work long after the recordings were performed.

In 1959, Kenin and the recording industry established the AFM and Employers’ Pension Welfare Fund (AFM-EPW Fund), which later became the AFM-EP Fund. The pension fund became a feature of the AFM’s successor Phonograph Agreement in 1959, with MPTF contributions reduced from 3% to 1%, and pension fund contributions established at 8%.

At first, the pension fund was available only to musicians doing record label sessions, but it was eventually incorporated into all Federation media and touring agreements and became available for inclusion in local collective bargaining agreements.

In January 1961, Kenin negotiated a new TV film and motion picture film scoring contract featuring a 12% raise in minimum scoring pay, residuals on TV theme use, and a historic new provision permitting the licensing of film to television for a 1 2/3% residual payment. Known as a “secondary market payment,” the new film-to-television residuals were paid to musicians who performed the original score through a new fund known today as the Film Musicians Secondary Market Fund. Pension fund obligations were set at 3%.

In the AFM’s successor television network agreement, pension contributions were set at 5% of scale. The new pension contribution and TV replay residual payment features were adopted in lieu of MPTF contributions.

Also in 1961, Kenin announced his intention to create a new residual fund for musicians who performed sessions for the record labels. The AFM and the recording industry agreed to establish the AFM Phonograph Record Special Payments Fund, where the 1% revenue-based MPTF obligation was split—50% to MPTF and 50% to the Special Payments Fund. It made an annual payment to each session musician based upon the cumulative number of session hours worked each year.

The $100 per jingle spot payment to MPTF was converted to a producer obligation to make a 13-week or 52-week cycle reuse payment to each musician who recorded the spot announcement.

And so it went. From the early 1960s onward, the Federation negotiated groundbreaking contract provisions introducing pension contributions, jingle 13- and 52-week use payments, film and TV film secondary market payments, phono residuals, and new use payments for sound recordings licensed into film and other media. These priceless fringe benefits improved the lives of musicians whose recordings continued to bring joy to the consumer long after the conclusion of production. It all began with the creation of MPTF in settlement of the two legendary strikes in 1944 and 1948.

The MPTF will celebrate its 75th anniversary in 2023. Its evolutionary relationship with AFM’s pension fund, Sound Recording Special Payments Fund, Film Secondary Markets Fund, and all other AFM ancillary residual funds should be celebrated as well.

The Music Performance Trust Fund (MPTF) will celebrate its 75th Anniversary in 2023. This article explores the establishment of the MPTF, which led to the formation of the AFM’s pension and residual funds.

If you receive benefit payments from the American Federation of Musicians and Employers’ Pension Fund, residual distributions from the Sound Recording Special Payments Fund and Film Musicians Supplemental Markets Fund, or new use, reuse or other residual payments from work covered by Federation media agreements, you may be surprised that funding for those payments originated from two epic strikes in 1944 and 1948 between the AFM and US record labels. Federation proposals, accepted by the recording industry, ended those strikes and created what we know today as the MPTF, the ancestor of all AFM pension and residual funds.

The strike actions followed technological advances and legal challenges throughout the 1920s and 1930s that resulted in dramatic job loss suffered by musicians working in motion picture theaters, on radio networks, and on local radio stations. The unresolved conflict between the AFM and the broadcasters, record labels, and film companies dated from the earliest days of recording and sound reproduction technology because there were never any performance rights for musicians. There were only limited performance rights reserved for composers at the beginning of the 20th century.

Musicians were left out of the 1909 US Copyright Act, which created the first compulsory mechanical license permitting anyone to make a mechanical reproduction—a phono record, phonogram, tape, compact disc, or other audio file—of a musical composition without the consent of the composer who owned the copyright. But in 1909, no one dreamed the reproduction of music would reach the level of audio fidelity and worldwide popularity enjoyed today.

The 1909 Act memorialized the composer as the owner of a mechanical performance right, but left professional musicians, who bring the composer’s ideas to life, without a right in the reproduction of their recordings. As technology vastly improved the fidelity and popularity of recordings, the AFM was left to bargain restrictions with the early users—the radio broadcasters and the film industry—over the use of member recordings.

With the sound recording industry, the Federation sought to negotiate a royalty on record sales to account for the fact that radio promotion and airplay generated enormous revenue for broadcasters, record companies, and for the composers, but provided no additional money for musicians.

From its beginnings, the AFM grappled with technology in much the same way we do today. We strive to maintain a level of control over what we do as musicians, as we attempt to retain a measure of ownership and control over what we have created. We seek to participate in the revenue streams that continue to enrich those who exploit our music long after we have created it.

The AFM eventually applied its considerable leverage to establish a royalty system with the sound record industry. The two strikes in the 1940s, including one during the Second World War, forced the record industry to accept a groundbreaking royalty on its gross sales.

In June 1942, AFM President James Petrillo notified the sound recording industry that musicians would no longer perform recording sessions after existing agreements expired. In September 1942, the AFM called its first strike, which targeted radio broadcasters, not recording companies. Broadcasters needed new recordings for programs. Because of a war-related vinyl shellac shortage and musicians’ refusal to record, the record companies could not supply records. As a result, employment for musicians on live network and local radio programs increased.

The record labels anticipated a work stoppage in the production of recordings and had been stockpiling master discs produced prior to the strike. The labels also sought, unsuccessfully, to break the strike by using musicians and recording studio facilities in Cuba and Mexico. By the summer of 1943, the sound recording industry was in free fall.

That same year, Petrillo proposed a royalty system that would require the labels to pay into a trust fund located within the AFM’s treasury. In September 1943, Decca Records became the first record company to settle with the Federation. That settlement provided a 2.5% royalty payment into the AFM’s trust fund, based on annual gross sales.

By June 1944, all but RCA Victor and Columbia Records had capitulated. The parent firms that owned them—National Broadcasting Company (NBC) and Columbia Broadcasting System (CBS)—were concerned that any such royalty arrangement would spread to their broadcast divisions, a premonition that would later become reality.

In October 1944, Petrillo rejected an appeal by US President Franklin D. Roosevelt to end the strike. NBC and CBS had no choice but to settle and sign the Decca deal (2.5% of the labels’ gross revenue). From 1943 to 1947 the royalties accumulated to the tune of $4.5 million, which was distributed among all locals on a per capita basis across the US and Canada to be used for free-to-attend public performances of live music.

Also in 1947, Congress passed the Taft-Hartley Act, which forbade employer payments to unions except for joint health and welfare funds and pension funds. Taft-Hartley made the Federation’s trust fund illegal as originally designed during the 1942-1944 strike resolution.

In January 1948, the Federation called another strike in response to the labels’ refusal to explore legally permissible ways to continue the trust fund. Lasting 11 months, the second strike was resolved when agreement was reached to establish the MPTF as an independent entity, jointly overseen by the Federation and the recording industry.

--Next month, we will examine how MPTF became a royalty feature of all existing Federation media agreements and how it was eventually restructured to create the pension and residual funds we know today.

Note: As I am preparing this column for the October edition of the International Musician—today, September 11, 2022—America and the world pause on the 21st anniversary of the vicious attacks in New York City; Washington, DC; and Shanksville, Pennsylvania. Reprinted below is an article I wrote for our local newsletter as president of Local 72-147 (Dallas-Fort Worth, TX) three weeks after the 9/11 attacks.

My travel to New York City to attend the October 3, 2001, opening of the AFM’s Pamphlet B negotiations had assumed an entirely different demeanor in the aftermath of the September 11 attack.

The plane from DFW to La Guardia, a Boeing 757, was only 25% full. During the usual pre-takeoff announcements, the flight attendant stated that “failure to comply with crew member instructions is a federal crime.” I had never heard that before. I wondered if the plane had a sky marshal, and if so, where that marshal might be.

Three hours later, as the plane descended toward the city, we flew over the southeast corner of Manhattan and then Long Island. After recognizing the familiar outlines of the Statue of Liberty and the Empire State Building, I looked to find ground zero from among the infinite jungle of skyscrapers, as did everyone else. We could not see it.

On the ground at La Guardia, customer density mirrored that of DFW, as it was amazingly slow.

I was one of only two passengers on the airport bus from La Guardia to the Port Authority terminal. Before the bus entered the Midtown Tunnel, we slowed for the “checkpoint” but avoided the long line of cars being searched. We proceeded on, arriving at 42nd Street after a short 15-minute ride from the airport. It definitely was not the city I remembered.

I had clear and vivid memories of the city, particularly the Times Square and Midtown Manhattan areas, from numerous trips I had made over the years as an AFM officer. I remember the energy and the dynamic of the town. On my way from the hotel to Local 802 that afternoon, I could feel the change in vibe.

There was an overwhelming sense of sadness. Walking past FDNY Ladder Company Number 54, located at 48th Street and 8th Avenue, a block away from Local 802, I was struck cold by the array of flower arrangements, cards, signs, photos, and other memorials left by a grieving public. Fourteen union firefighters from that firehouse alone had given their lives to save the thousands who escaped the twin towers.

The executive board of Local 72-147 had convened on October 1, the night before, and resolved to donate $1,000 to Local 802’s relief fund to help members adversely affected by the tragedy. I met with the Local 802 board that afternoon and presented the donation.

Broadway theater musicians, in concert with union actors and stagehands, had voluntarily reduced their salaries by 25% to keep the houses from going dark. Those reductions would last four weeks. Two shows, Blast and Rocky Horror Picture Show, had closed.

“We were massacred,” said one musician, referring to the September 11 attack. I was beginning to understand the depth of the anger and depression that gripped the city, but it was not until I saw the remnants of the carnage itself that I was able to approach any sense or comprehension of the horror of it.

Local 5 (Detroit, MI) President Gordon Stump and I decided to try to visit ground zero on Wednesday, October 3, after the conclusion of the opening day of negotiations. “Take us as far as you can to ground zero,” I told the cab driver. We proceeded south a good long way until I could see what would be the first checkpoint that marked the 12-block perimeter.

Thick with US Marshals, State Police, and NYPD, the checkpoint stopped all traffic, letting through only residents, property owners, or employees. Gordon and I walked into a world that resembled an episode of The Outer Limits.

No traffic, no noise, very little pedestrian activity, and people wearing masks to help them breathe. Others, who had obviously been working near the site, had breathing apparatus hanging around their necks.

It was an eerie scene. After we walked another six blocks or so, we came upon another series of checkpoints across which we could not pass. From there, we stood in silence and looked down the final four blocks to ground zero.

None of the photos or TV images could impart the graphic horror of the destruction that lay there. The debris mound from which the large cranes were removing smoldering rubble was several stories tall. The charred hull of one of the towers stood as a backdrop to the thousands of tons of wreckage. There, as we stood frozen and speechless, President Bush’s motorcade exited from a side street and sped away.

We had been there about 15 minutes when I noticed that I had begun to cough. Gordon’s eyes were burning. The air was a mix of smoke and dust, with a noticeable odor of concrete.

On the A train back to Times Square, I could overhear the residents talking with each other in snippets about the tragedy. Some discussed friends who were still missing, what they had done, and where they had been to help. People were doing what they could to deal with their personal losses. You could see in their eyes that they had been forever changed. You could also see and feel their spirit and determination to rise above the sorrow.

That spirit and determination of the people of New York City is what I brought back from the opening meetings of our Pamphlet B negotiations, which would continue for quite some time. The employers had informed us that technology had recently become available that could almost perfectly replicate the sounds of an accompanying pit orchestra for the production of theatrical musicals. The Broadway League suggested that the technology could be used to break any impasse in the negotiations.

“We don’t need you,” said the League employers, referring to our attempts to blunt their efforts to impose reduced orchestrations with fewer musicians in major markets. Their attitude was more than cold. More like subzero.

Those employers, like the board of directors of The Dallas Opera, shamelessly used the events of September 11 to adopt a conservative economic stance toward professional musicians, who bring such joy into the world, and at a time when the public needed it the most.

“We are all here because music has brought us here,” I told the employers on the third day of the Pamphlet B sessions, “and music is about man’s inhumanity to man. You have a responsibility to protect the livelihood of those of us who create it.”

There are lessons to be learned from the resilient human spirit we see today in New York City, and that exists everywhere in this great country. Triumph over tragedy, victory in the face of adversity, have been recurrent themes since the first caveman whittled a songflute from the carcass of a dead antelope.

Our music contains that spirit. It is what saves us.

Despite such coldness, we will find that spirit, as we always do, as we confront the producers and employers in New York City and here at home in Dallas-Fort Worth.

Note: As I am preparing this column for the October edition of the International Musician—today, September 11, 2022—America and the world pause on the 21st anniversary of the vicious attacks in New York City; Washington, DC; and Shanksville, Pennsylvania. Reprinted below is an article I wrote for our local newsletter as president of Local 72-147 (Dallas-Fort Worth, TX) three weeks after the 9/11 attacks.

My travel to New York City to attend the October 3, 2001, opening of the AFM’s Pamphlet B negotiations had assumed an entirely different demeanor in the aftermath of the September 11 attack.

The plane from DFW to La Guardia, a Boeing 757, was only 25% full. During the usual pre-takeoff announcements, the flight attendant stated that “failure to comply with crew member instructions is a federal crime.” I had never heard that before. I wondered if the plane had a sky marshal, and if so, where that marshal might be.

Three hours later, as the plane descended toward the city, we flew over the southeast corner of Manhattan and then Long Island. After recognizing the familiar outlines of the Statue of Liberty and the Empire State Building, I looked to find ground zero from among the infinite jungle of skyscrapers, as did everyone else. We could not see it.

On the ground at La Guardia, customer density mirrored that of DFW, as it was amazingly slow.

I was one of only two passengers on the airport bus from La Guardia to the Port Authority terminal. Before the bus entered the Midtown Tunnel, we slowed for the “checkpoint” but avoided the long line of cars being searched. We proceeded on, arriving at 42nd Street after a short 15-minute ride from the airport. It definitely was not the city I remembered.

I had clear and vivid memories of the city, particularly the Times Square and Midtown Manhattan areas, from numerous trips I had made over the years as an AFM officer. I remember the energy and the dynamic of the town. On my way from the hotel to Local 802 that afternoon, I could feel the change in vibe.

There was an overwhelming sense of sadness. Walking past FDNY Ladder Company Number 54, located at 48th Street and 8th Avenue, a block away from Local 802, I was struck cold by the array of flower arrangements, cards, signs, photos, and other memorials left by a grieving public. Fourteen union firefighters from that firehouse alone had given their lives to save the thousands who escaped the twin towers.

The executive board of Local 72-147 had convened on October 1, the night before, and resolved to donate $1,000 to Local 802’s relief fund to help members adversely affected by the tragedy. I met with the Local 802 board that afternoon and presented the donation.

Broadway theater musicians, in concert with union actors and stagehands, had voluntarily reduced their salaries by 25% to keep the houses from going dark. Those reductions would last four weeks. Two shows, Blast and Rocky Horror Picture Show, had closed.

“We were massacred,” said one musician, referring to the September 11 attack. I was beginning to understand the depth of the anger and depression that gripped the city, but it was not until I saw the remnants of the carnage itself that I was able to approach any sense or comprehension of the horror of it.

Local 5 (Detroit, MI) President Gordon Stump and I decided to try to visit ground zero on Wednesday, October 3, after the conclusion of the opening day of negotiations. “Take us as far as you can to ground zero,” I told the cab driver. We proceeded south a good long way until I could see what would be the first checkpoint that marked the 12-block perimeter.

Thick with US Marshals, State Police, and NYPD, the checkpoint stopped all traffic, letting through only residents, property owners, or employees. Gordon and I walked into a world that resembled an episode of The Outer Limits.

No traffic, no noise, very little pedestrian activity, and people wearing masks to help them breathe. Others, who had obviously been working near the site, had breathing apparatus hanging around their necks.

It was an eerie scene. After we walked another six blocks or so, we came upon another series of checkpoints across which we could not pass. From there, we stood in silence and looked down the final four blocks to ground zero.

None of the photos or TV images could impart the graphic horror of the destruction that lay there. The debris mound from which the large cranes were removing smoldering rubble was several stories tall. The charred hull of one of the towers stood as a backdrop to the thousands of tons of wreckage. There, as we stood frozen and speechless, President Bush’s motorcade exited from a side street and sped away.

We had been there about 15 minutes when I noticed that I had begun to cough. Gordon’s eyes were burning. The air was a mix of smoke and dust, with a noticeable odor of concrete.

On the A train back to Times Square, I could overhear the residents talking with each other in snippets about the tragedy. Some discussed friends who were still missing, what they had done, and where they had been to help. People were doing what they could to deal with their personal losses. You could see in their eyes that they had been forever changed. You could also see and feel their spirit and determination to rise above the sorrow.

That spirit and determination of the people of New York City is what I brought back from the opening meetings of our Pamphlet B negotiations, which would continue for quite some time. The employers had informed us that technology had recently become available that could almost perfectly replicate the sounds of an accompanying pit orchestra for the production of theatrical musicals. The Broadway League suggested that the technology could be used to break any impasse in the negotiations.

“We don’t need you,” said the League employers, referring to our attempts to blunt their efforts to impose reduced orchestrations with fewer musicians in major markets. Their attitude was more than cold. More like subzero.

Those employers, like the board of directors of The Dallas Opera, shamelessly used the events of September 11 to adopt a conservative economic stance toward professional musicians, who bring such joy into the world, and at a time when the public needed it the most.

“We are all here because music has brought us here,” I told the employers on the third day of the Pamphlet B sessions, “and music is about man’s inhumanity to man. You have a responsibility to protect the livelihood of those of us who create it.”

There are lessons to be learned from the resilient human spirit we see today in New York City, and that exists everywhere in this great country. Triumph over tragedy, victory in the face of adversity, have been recurrent themes since the first caveman whittled a songflute from the carcass of a dead antelope.

Our music contains that spirit. It is what saves us.

Despite such coldness, we will find that spirit, as we always do, as we confront the producers and employers in New York City and here at home in Dallas-Fort Worth.