As I write this column, preliminary caucus meetings have just concluded in preparation for the opening round of talks with major labels representing the sound recording industry toward a successor Sound Recording Labor Agreement (SRLA). The existing agreement was reached October 2011, expired February 2015, and has been extended indefinitely while negotiations are in progress. Formal across-the-table negotiations begin September 28 in New York City.
In addition to setting wages and conditions covering musicians performing sessions called by the big three labels (Universal/Capitol/EMI, Sony/BMG/Columbia, and Warner/Atlantic), their owned subsidiaries, Disney’s Hollywood Records, and other covered independent labels, the agreement provides additional special residual payments to session musicians for five years following an original session through the Sound Recording Special Payments Fund (SPF). It also establishes a royalty from sales revenue for the Music Performance Trust Fund (MPTF), which is of critical interest to the Federation, our locals, and our members.
The current round of negotiations will convene against a backdrop of litigation recently initiated against the major labels by the Federation and by the American Federation of Musicians’ and Employers’ Pension Fund (AFM-EPF). The pension fund’s legal action centers on the labels’ failure and refusal to make appropriate pension payments on foreign streaming. The Federation’s action concerns Sony Music’s failure to comply with contract provisions that require additional payments for new use, domestic, and foreign licensing. The day of turning a blind eye toward industry’s noncompliance with the SRLA is done; thus, as a last resort and to demonstrate our resolve toward strict contract enforcement, the Federation and the AFM-EPF have turned to the courts for relief from the games the labels play to avoid paying our members the wages and benefits due.
The negotiations will also take place amidst rapid changes in the public’s consumption of music—away from physical products like compact discs and DVDs, and away from permanent downloads, toward web-based digital distribution that includes interactive and noninteractive streaming. In the realm of interactive streaming, digital service providers like Spotify, Apple Music, and YouTube are paying labels hundreds of millions of dollars for rights to access entire catalogs of tunes, but most featured artists do not have the leverage to demand and obtain a fair royalty from the labels. Session musicians, the unsung heroes behind the labels’ treasure trove of hits, get nothing.
The bottom line is that consumer spending on recorded music and record industry revenue are moving swiftly from physical product and digital downloads to streaming. And as we watch our traditional royalty positions in physical and download sales decline precipitously, threatening the very existence of MPTF and SPF, pursuit of new money for those funds will prompt a new sense of urgency in the upcoming negotiations.
Our negotiating team is an inclusive, well-rounded mix of international officers, local officers, rank-and-file recording musicians, AFM staff, and attorneys. It includes AFM International Vice President Bruce Fife, Vice President from Canada Alan Willaert, Secretary-Treasurer Sam Folio, International Officers Tino Gagliardi of Local 802 (New York City) and Dave Pomeroy of Local 257 (Nashville, TN), Recording Musicians Association (RMA) President Marc Sazer, RMA rank-and-file representative Neil Stubenhaus of Local 47 (Los Angeles, CA), Local 47 President John Acosta, Local 10-208 (Chicago, IL) President Gary Matts, Local 9-535 (Boston, MA) President Pat Hollenbeck, Local 10-208 Electronic Media Director Dean Rolando, and Local 802 Electronic Media Director Steve Dannenberg.
Also represented in our SRLA negotiating team are a host of talented rank-and-file recording musicians whose knowledge and experience from the field is essential in building a credible approach toward industry. We will have expert assistance from AFM EMSD Director Pat Varriale, and an invaluable trio of lawyers featuring AFM General Counsel Jeff Freund, Associate Counsel Trish Polach, and In-House Counsel Jennifer Garner.
We expect that negotiations with industry will be long and difficult. For the first time in recent history, the Federation and AFM-EPF have initiated legal action to enforce compliance with SRLA provisions. Those actions have served notice to industry that, when we are left without proper paychecks and benefit payments, and attempts to correct those actions are stonewalled, there will be consequences. The industry also knows that the Federation is acutely aware of the rapid changes in consumer spending and how those changes have adversely affected MPTF and SPF.
Your negotiating team will bargain hard to ensure that our successor SRLA will be a progressive agreement and will promote, preserve, and protect the interests of the Federation, our locals, and our talented recording musicians both today and throughout the years ahead.