Archive for the ‘Uncategorized’ Category

AB5 WORK LOSS – Comments

Saturday, January 18th, 2020

AB5 WORK LOSS – COMMENTS

…Absolutely guaranteed anonymity – Former Musician’s Union officer


…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician


Dear Editor, 

Just received a call from an enraged fellow musician…an opera that was scheduled for all next week has been cancelled due to AB5!  Here is a musician that relies on this type of community gig to pay the bills!  How will this musician cover this loss? So sad and will not be the only one….so many other persons in other fields are already feeling the pain of jobs lost and a mad scramble to get anything to keep money coming in.  As one person wrote re: Repeal AB5 ….in answer to Assembly Member Lorena Gonzalez’s (who introduced the bill) comment, “People shouldn’t need to have two or three jobs…” “Thanks, now I have no jobs!”

Dark Dates will go Black Market and musicians will be relegated to the same status as the day laborers at Home Depot…illegal and working for cash! Sickening!

47 Member

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It is pathetic that the musician union that suppose to defend the interest of musician is doing nothing to oppose this law that the only thing it will do is damage the entire music business.

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Many musicians woke up on January 1, 2020 without a clue that their way of life was going to be in jeopardy. AB5 is a drastic game changer for people who are used to owning their own lives and livelihoods. This bill is a power grab by big labor and a money grab by an out of control legislature. Don’t whine…get busy and exercise your civic rights! Our government works best when it fears its voters!

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This law is extremely harmful to the entire music community and will cause harmful consequences to the people working in this industry as well as for the general population who will be deprived of music because there just won’t ba any way to produce it any more. Venues will close, people will go broke with all the challenges that insures on the health of a human being.

I urge you to reconsider and amend this law to take our specific industry into consideration and leaving it out of this legislation.

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We’ve also received word from another member who writes text for a publishing company on the side. Turns out the company has decided to leave California, eliminating whatever work was done by folks here.

Nice going AB5 supporters. (You listening John?…. Ray?)

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There was a recent interview with one of the legislators who had to hear complaints from constituents whose work has disappeared directly because of AB5.

Her Response? “They’re lying.”

With friends like these….

Till next time.

THE COMMITTEE

UPDATE ON AB5

Wednesday, January 15th, 2020

Freelancers Angry Over Assemblywoman Gonzalez’ False Claims About Benefits

“The terms of AB 5 are so murky that many companies are choosing to not work with anyone living in California.”

Newsom Budgets Millions to Hunt Down AB-5 Violators

By Michelle Mears, January 14, 2020 6:51 am

“Like the old Soviet Union you will be allowed to work only if government allows it—under their conditions, not yours.” ~Stephen Frank

Part ll of those hurt by AB 5.

Part l is here: Democrat Assemblywoman Gonzalez Says There Is No Data Proving Thousands of Freelancers Are Losing Work Due to AB-5

Assemblywoman Lorena Gonzalez (D-San Diego) and Governor Gavin Newsom (D)  are digging in as freelancers fight back against AB 5. On Friday, Jan. 10 Gonzalez appeared on KUSI in San Diego and made numerous false claims about workers in the gig economy not paying taxes or having benefits. The same day,  Gov. Gavin Newsom allocated $20-million to target and investigate contractors, not in compliance with the law that took effect New Year’s Day.

California is estimated to have nearly two million residents who choose to work as an independent contractor, according to the  2018 U.S. Bureau of Labor Statistics Economic Release. Two million however is a conservative estimate because the report did not include the number of individuals who supplement their income with online platforms.

Gonzalez has angered not just thousands but possibly millions of voters. Self-proclaimed hard core Democrats have said this is the straw that broke the camels back.

A group of contractors met with Assemblyman David Chui (D) in San Francisco on Monday. Chui told contractor Emily Price and others that a repeal of AB-5 is unlikely but he is keeping a binder of people’s stories on how the bill is affecting them.

Meanwhile, rally’s are being planned up and down the state, freelancers and independent contractors are writing letters, and making phone calls to state representatives. Gonzalez however remains firm AB 5 and says the new law is best for the state.

AB 5 stems from the  The Dynamex Operations West, Inc. v. Superior Court decision by the California Supreme Court in April 2018 that overturned three decades of California employment law that allowed individuals to work as independent contractors.

According to Imindependent.com, “This decision could upend how millions of Californians earn a living and nearly every industry due to its new restrictive ABC test. The ABC test is the first time in U.S. history that such a test has been imposed by a court, without legislative approval, with three independently disqualifying factors.“

Newsom who is pro-union like Gonzalez, said he will use part of the $20 million for training staff to allocate the ABC test and to allocate funding to investigate and hold hearings on compliance. A reporter from California Political Review compared Newsom’s tactics to the those of a communist regime.

“Like the old Soviet Union you will be allowed to work only if government allows it—under their conditions, not yours,” wrote Stephen Frank.

The terms of AB 5 are so murky that many companies are choosing to not work with anyone living in California.

AB5 / REDUCED BENEFITS / STREAMING / COMMENT

Wednesday, January 8th, 2020
  1. AB5 UPDATE, LOCAL 47
  2. MUSICIANS’ UNION TO TREASURY: LET US REDUCE BENEFITS IN 2021.
  3. UNION FAILS TO WIN STREAMING RESIDUALS
  4. MEMBER COMMENT

…Absolutely guaranteed anonymity – Former Musician’s Union officer


…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician


Editor’s Comment: As anyone who’s followed the AB5 story knows by now, The AFM and Local 47 made no request to exempt freelance musicians from AB5. In fact, they support it. Word is they support it because they think it’ll force those who’ve gone Fi-Core or are non-union to re-join or join the AFM. That’s not going to happen, and as you will read below, the AFM and Local’s conduct is coming home to roost in a big way, affecting us all.

READ ON…….

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  1. AB5 Update LOCAL 47

Originally posted December 31, 2019 by AFM Local 47 President John Acosta [johncoz2022]:

Many of you may now have heard of California legislation AB5 which was created to ensure that most workers in California are classified as employees, not independent contractors. Introduced by California Assemblymember Lorena Gonzalez, AB5 was created to incorporate the Dynamex ruling, which was a California Supreme Court decision from last year, into state law. That decision limited an employer’s ability to classify certain types of workers as independent contractors. Some members have asked if this new law will negatively impact the practice of using loan out companies as a way of ensuring fair tax treatment for our members. It is our view that AB5 will have no impact on the use of loan outs. AFM Local 47 along with DGA, WGA, IATSE and SAG-AFTRA have done exhaustive due diligence with counsel to come to this conclusion.

Another hot topic with AB5 is the so-called “end of the music business as we know it” tagline that some organizations are touting. Nothing could be farther from the truth! While AFM agreements clearly establish that musicians are employees and not independent contractors, there were many instances where employers attempted to misclassify musicians. Leading up to the bill’s adoption we worked closely with SAG-AFTRA to ensure that musicians and singers were properly covered under this new legislation. With the backing of the California Labor Federation, our Secretary/Treasurer Gary Lasley along with AFM reps all over California reached out to elected officials to seek continued support for this important legislation.  

There are current talks underway with the California legislature and employer partners to clarify AB 5’s impact where necessary, but AFM Local 47 will always do what is in the best interest of its members first and foremost.

Whether it is a community orchestra, small theater, or a live performance, California law requires employers who hire musicians for performances, which meet the AB5 threshold, to pay the appropriate taxes and make the necessary withholdings. This way, musicians can apply for disability, unemployment, Social Security or workers’ comp when necessary and applicable.

This entry was posted in All News, Legislative News (Deadline.com) and tagged AB 5, AB5 on January 2, 2020.

  1. Comment on the site for this story:

January 4, 2020 at 10:12 am

Horrible stupid bill and shame on the “union” for backing it!!!! The union represents less than 5% of the music industry but they don’t give a crap about anyone else. I’m going to-core

  • Additional Local 47 member comment:

Really?  Someone who has been a desk jockey for nearly two decades has the balls to tell the rank-and-file the Union is working for us?!!

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2. Musicians Union’s Pension Plan Asks Treasury Department For Permission To Reduce Benefits In 2021

By David Robb (Deadline.com)

VIEW ALL

January 7, 2020 9:00am

Trustees of the American Federation of Musicians’ troubled Pension Plan have asked the U.S. Treasury Department for permission to reduce thousands of musicians’ monthly pension benefits in order to keep the “critical and declining” Fund from becoming insolvent within the next 20 years.

The Plan is in trouble because as of March, its $3 billion in liabilities exceeded its $1.8 billion in assets, meaning that the Plan is underfunded by about $1.2 billion. Ironically, many musicians facing pension cuts were once employed on films executive produced by Treasury Secretary Steven Mnuchin, who was a prolific movie producer and investor before joining President Donald Trump’s Cabinet in February 2017.

See the trustees’ FAQ here.

U.S. Department of the Treasury

The trusties, who determined that the Plan had entered “critical and declining status” last April, told their participants today that “This means that the Plan is projected to run out of money to pay benefits – or become ‘insolvent’ – within 20 years under the Multiemployer Pension Reform Act (MPRA), a law enacted in December 2014. Under MPRA, if a fund enters critical and declining status, the trustees can apply to the U.S. Department of the Treasury for approval to reduce participants’ benefits by an amount sufficient to avoid insolvency.

“Although reducing earned benefits will be painful, the trustees have submitted an application to do so because the alternative of running out of money would leave participants with a much greater benefit reduction in the future. The trustees have no other viable way to save the Plan for the long term – that is to say, realistic investment returns and contribution increases will not avoid insolvency.”

According to the trustees, nearly half the Plan’s 50,782 participants are expected to see some reduction of benefits beginning early next year, and some will be harder hit than others. Pensioners who are 80 years old and older, for instance, won’t see their pensions reduced at all, nor will those who receive disability pensions. Those who receive relatively small pensions won’t be affected either, or will be affected the least. The reductions will fall mostly on younger retirees – current and future – and on those who receive the largest pensions.

The trustees estimate that 22,753 participants (44.8%) are expected to see reductions of 20% or less, with 930 (1.8%) seeing reductions of 20-40%. They estimate that 27,099 participants (53.4%) won’t see any reductions at all.

If approved by Treasury and by the participants, the benefit reductions, which will kick on Jan. 1, 2021, will affect a broad mix of musicians who work or have worked in the film and television industry under the union’s contract with management’s AMPTP; on sound recordings; at symphonies and operas; on Broadway, and in regional and traveling musical productions.

20,000 Musicians To Receive “Painful” Pension Cuts To Keep Benefit Fund Solvent

The decision to apply to the Treasury Dept. for benefit reductions “was painful, but it is essential that we do everything possible to put the Plan on stronger financial footing,” the trustees told participants today in personalized statements telling each participant how much, if any, their benefits will need to be reduced to keep the Plan solvent.

“Doing nothing also results in benefit reductions,” they said. “This isn’t a choice between reducing benefits and not reducing benefits. It is a choice between reducing benefits now, or reducing benefits later, but to a greater extent. No one wants to reduce benefits. But, if we don’t reduce benefits now, at some point in the future, the Plan won’t have enough money to pay benefits.”

The Pension Benefit Guaranty Corporation (PBGC), which was created by an act of Congress in 1974, is supposed to protect multiemployer pension funds like the AFM’s, but facing a record-breaking deficit of more than $65 billion itself, has said that it could run out of money by 2025.

“The PBGC’s multiemployer program is projected to become insolvent by 2025,” the trustees noted. “If that happens, then there will be little to no PBGC guarantee to fall back on. In this scenario, if the Plan became insolvent, then participants’ benefits would be reduced dramatically. That’s why it’s so important for us to ensure that the Plan avoids insolvency. While there is no doubt that benefit reductions for participants will be difficult, they cannot be worse than the catastrophic reductions that would take place for participants if the Plan and the PBGC both ran out of money.”

And even though the PBGC’s own financial problems make it an unreliable guarantor – with more than 100 multiemployer pension plans across the country currently facing insolvency – they’re required to pay into it, regardless of their funding status. For 2020, multiemployer plan have to pay $30 to the PBGC per plan participant – nearly quadrupling from $8 per plan participant in 2007. For the AFM Plan, that means that its required PBGC premiums increased from approximately $400,000 a year in 2007 to $1,450,000 last year “due to the enormous increases in the per-participant annual premium,” the trustees said.

Musicians Union Failed To Win Streaming Residuals – Its Main Goal In Film & TV Contract Negotiations

“Some legislative proposals in Congress have included significant increases to PBGC premiums, including a November 2019 proposal by Senators Charles Grassley and Lamar Alexander,” the trustees said. “If passed, such increases would drain the assets of troubled plans like the AFM Plan even faster, thereby hastening possible insolvency. The trustees oppose these increases.”

“We have a real opportunity to save the Plan,” the trustees said. “There are a number of other financially troubled plans that are too far gone to even apply” to the Treasury Dept. for benefit reductions. “We believe that our proposed reduction will reposition the Plan to be around to pay benefits to current and future retirees for decades to come.”

But that will require the Plan’s participants to approve the reductions if Treasury gives the okay. And if everything goes according to plan, Treasury will post the AFM’s application on its website on Jan. 29, and will have completed its review of the application by Aug. 11, approving or denying it. If the application is approved, the Treasury Dept. will mail ballots to all participants and beneficiaries of deceased participants within 30 days of approval. Voters will then have at least three weeks to cast ballots, with those who don’t vote being counted as “yes” votes to reduce benefits. Treasury must then announce the outcome of the vote within seven days of the voting deadline, and for a plan of benefit reductions to be voted down, a majority of eligible voters must vote against it, meaning that a low-voter turnout will guarantee approval.

It’s also possible that Treasury will identify changes that need to be made in the application before it can be approved. In that case, the Plan may withdraw the application and resubmit it, which would restart the timeline. This has occurred for many other pension funds that ultimately have had their applications approved. “To reduce the likelihood of this scenario,” the trustees said, “we have had numerous communications with Treasury about its expectations.”

“Nobody wants to see benefits reduced,” the trustees stressed. “But unless Congress steps in with a legislative solution, something it has so far refused to do, the options boil down to reduced benefits now or running out of money and having a much higher reduction in benefits later. We understand that participants don’t want to hear that we need to take away a portion of the pension they have been relying on, but that’s the awful choice we face.”

COMMENT ATTACHED TO THE ARTICLE

“Good morning, thanks for calling the AF of M”

Yeah hi, this is runaway scoring calling. I’m here in Seattle, tomorrow I’ll be in London at Abbey Road with all your musicians. We’re scoring all your films non union now. I think you might have a long term problem coming on your hands and I want to give you the heads up”

“I’m sorry, we’re busy at the moment right now with pressing matters”…click.

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3.Musicians Union Failed To Win Streaming Residuals – Its Main Goal In Film & TV Contract Negotiations

The American Federation of Musicians failed to achieve its main goal in its recently concluded negotiations for a new film and TV contract – winning residuals for musicians’ work on episodic TV shows made for streaming services. Even so, the 80,000-member union says it will keep fighting for those payments when the contract comes up for renewal in two years.

The negotiations with management’s AMPTP concluded with a tentative agreement on Friday, but terms of the deal weren’t released until today.

The new two-year contract, which still must be ratified by the union’s members, “includes many substantive improvements and no significant concessions,” the AFM said, “yet still does not include residuals for work on films and episodic TV shows made for streaming.”

The union added: “For the first time in history, musicians will receive screen credits when they perform on theatrical and streamed film scores. Also for the first time, the proposed deal establishes fair wages and conditions for high-budget shows made for streaming platforms.”

Other economic improvements include an increase in musician residual payments for shows rented and purchased online, as well as 3%-a-year wage increases. According to the union, “Musicians successfully resisted attempts by the studios to impose unjustified concessions, including those that would allow studios to score more TV shows and films abroad.”

The AFM added: “While these unprecedented achievements are significant wins for musicians, their biggest demand — residuals for work in new media — was not included in the final offer by the Alliance of Motion Picture and Television Producers. While the studios continue to refuse industry-standard residuals for new media projects, musicians have made it clear that this is still a priority and that they will continue to fight for this basic standard.”

AFM president Ray Hair called the deal a temporary “truce” in its ongoing battle for streaming residuals:

“The campaign for fairness in our contract with the studios, particularly on the issue of compensation and residuals for content made for streaming, has energized not only our film and television musicians in Los Angeles, New York and Nashville, but musicians throughout the country. The tentative agreement, if ratified, will be viewed as a short-term truce. While we’ve made meaningful progress on how we are recognized and treated when we perform scoring sessions for theatrical and long form new media productions, our musicians’ concerted activity will continue as the backdrop to our ongoing efforts to obtain fair residual terms whenever we are engaged to score content made for streaming.”

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4. MEMBER COMMENT

Great blog! I agree with and support both articles by Ari and the one with the letter. However, I think the most compelling article is the one written by the current AFM member. I’ve spoken with many union members about AB5 and learned that many of them did NOT support this bill. Very little information was shared prior to September 18, 2019 when the bill was signed by Governor Newsom. Even after the law was signed, the majority of music professionals I spoke to knew nothing about the law. If the AFM was truly “representing” the voice of their members and the music community, they should have done a much better job at educating everyone about the impending bill BEFORE it was signed into law. Now we must spend our precious time and resources complying with the law while also fighting for an exemption. Great job AFM!

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Until Next Time,

The Committee

THE AB5 EDITION

Tuesday, December 31st, 2019

HAPPY NEW YEAR FROM THE COMMITTEE!

THREE AB5 VIEWS

  1. THE INDEPENDENT MUSICIANS VIEW
  2. LOCAL 47 MEMBER VIEW
  3. ARI HERSTAND AB5 MEETING ARTICLE

[Firstly, what are the ABC rules?: a new test to determine whether a worker is an independent contractor or an employee.

A worker is an independent contractor ONLY if the company hiring the worker establishes the following:

  1. the worker is free from the control and direction of the hiring company “in connection with the performance of the work, both under the contract for the performance of the work and in fact”;
  2. “the worker performs work that is outside the usual course of the hiring company’s business”; and
  3. the worker is “customarily engaged in an independently established trade, occupation, or business of the same nature” as the work performed for the hiring entity.]

Below are three views of AB5. Make sure to pay particular attention to the statistics in Ari Herstand’s article. They are quite eye opening.

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I. THE INDEPENDENT MUSICIANS VIEW

To the esteemed members of the California Assembly and Legislature:

AB5 will have a devastating and catastrophic impact on independent musicians, their livelihoods and the music industry in general in California. Musicians’ businesses operate in a substantially different way than many other types of industries, and the changes brought by AB5 are not sustainable with our business model.

Each year, a musician may be booked by numerous entities or individuals and may also contract numerous individuals. Musicians often wear different hats; as performers on their own and other musicians’ recordings and live performances, as session musicians, as instructors, as producers, as composers and songwriters, as bookers and as bandleaders.

For example, in a given week, a musician might:

-Perform on live gig under their own name and two in other bands.

-Teach eight private lessons.

-Produce three songs for a client, involving booking a studio and session musicians.

-Record their own songs with other musicians.

-Subcontract musicians and play at a wedding.

In just one week, the musician would be both employer and employee .numerous times over in the AB5 model. This is exponentially true over the course of a year. Using the Uber and Lyft model that precipitated AB5, imagine there are thousands of different rideshare companies. A driver might work for multiple companies for only a few hours a week or month. That same driver also owns a rideshare  Californiacompany that uses other drivers. This imagined scenario closely resembles musicians’ situations.

Most professional musicians in California do not have assistants, lawyers, agents or business managers. Most of us make a modest living in order to pursue their craft. The costs associated with AB5 would be crippling. Incorporating or becoming an LLC is prohibitively expensive, and payroll companies do not work with our business model. If one musician is contracted by another to perform on one song on a record, and the booking musician must go through a payroll company, they must pay fees for that one musician for the entire year. Multiplied by the amount of times one musician can contract other musicians throughout the year, the costs and logistics become overwhelming for an individual.

Most musicians in California are not celebrities. We are members of the working class. We have worked diligently to pursue our art, build up clients and nurture professional relationships so that we may continue to create and entertain. We work for and with each other on projects. There is no company or corporate structure. Our work is on a per-project basis and frequently the person booking us is a fellow musician. If a musician is contracted to play one song on an album, they recognize that there is no promise of future employment. They cannot claim unemployment against their colleague that booked them.

Being a professional musician is, by definition, a freelance occupation. The term “gig” was coined in the 1920’s by Jazz musicians. Musicians cannot stop freelancing and at “Blank Music Company” since it doesn’t exist. Music organizations that do offer secure, full-time employment and benefits, such as symphony orchestras, are blindingly difficult to get into. First-call union session musicians in Los Angeles can enjoy an excellent living and benefits, but the lines for those recording sessions are long and few musicians will ever make the bulk of their living this way. Most of us piece together our living from numerous opportunities throughout the year, which we welcome and want to do.

We are, frankly, terrified of AB5 as it allies to us. The ABC test is so strict and the fines are so high that many entities will simply stop using California musicians altogether. Clubs will switch to recorded music rather than use payroll companies, composers will use sampled instruments rather than live players and much of out business will simply move to Nashville, New York or Atlanta. The Los Angeles jazz scene has, in the last several years, surpassed that of New York in terms of creativity and visibility, but is not a money-making venture and is vulnerable in that aspect. Jazz clubs, with their limited resources, could become so over burdened that they may be forced to close, which would be a great loss to the state of California, both economically, artistically and in terms of its newfound reputation as a hub for creative music.

We are aware that exemptions for musicians were discussed and ultimately negated by the AFM, but the AFM represents only a fraction of musicians in California and does not speak for the majority of us. Most independent musicians were not aware of the existance of AB5 or how it could impact them until after it’s passing. And most are still not. We appreciate your efforts to go after billion-dollar conglomerates such as Uber and Lyft, but the reality is that independent musicians are much closer to the drivers economically. Many of the individuals in the professions that were granted exemptions – doctors, lawyers and architects – make many times over the salaries of average working musicians. Why not grant independent musicians, who need it even more, the same exemption?

We are proud to call ourselves independent California musicians. We want to continue as independent contractors so that we may continue to pursue our craft in the best possible way for us. We would be grateful for an exemption that recognizes the unique nature of our field and allows us to continue to make the best music we possibly can.

Sincerely

A group of independent professional California musicians seeking an AB5 exemption.

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II. A LOCAL 47 MEMBER’S VIEW

Dear Editor,

So the author of AB 5, Assemblywoman Lorena Gonzalez tweeted that “We were very disappointed the music industry and entertainment unions did not get to an agreement.”

The Officers and Executive Board of Local 47 know that support of AB 5 will disenfranchise the majority of the membership that makes their living as independent contractors.  The union sees this legislation as an opportunity. The Union is in the union business. AB 5 will allow the arm of state government to decimate and eliminate the union’s competition in Los Angeles when it comes to recording and production…or so they might hope. They just don’t want to be blamed.

Union support is often the way many of the politicians get elected. President Acosta has even opined that since the law will bring more revenue to the state, perhaps it will be time to ask the state for more money for the arts.

President John Acosta presents himself as representing 6200 members in Local 47 AFM.  However, the overwhelming majority of the Union’s efforts in Sacramento focus on tax credits for media recording that benefit only a small fraction of the membership known as the Recording Musicians of America, a once powerful and controlling players’ conference within the AFM. At last count RMALA = 457 members.

There might be quite a change in the perception of the Local if Sacramento and the LA FED knew that the Officers and the Board got elected with less than 365 votes. That is probably about the number of rank-and-file musicians that actually make a living solely under union contracts.

Local 47 Member

[EDITOR’S COMMENT: We believe the number of those making a full living solely off union work is far smaller than 365]

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III. ARI HERSTAND AB5 MEETING ARTICLE

I met with AB 5 Author Assemblywoman Gonzalez. Here’s How it Went.

12-18-2019

By Ari Herstand

Yesterday morning 5 musicians and I piled into my car at 7am (!!) and we made the excursion down to San Diego to Assemblywoman Lorena Gonzalez’s office to discuss the effects of California’s new law AB5 on the music community.

If you’ve been living under a rock the past couple weeks, read my piece: California’s Music Economy Is About To Crash

After my article finally got the conversation started about how AB5 will be catastrophic for the music industry in California, I was offered a meeting (via Tweet) by Assemblywoman Gonzalez – who wrote the bill and got it passed. It’s funny how effective Twitter is these days in politics. Ask a musician the last time they logged into Twitter and most will say not since the Obama era, but man, if Twitter ain’t where politics lives and dies. Welp, it got me a meeting.

Now as an update on what went down since my article was posted just about a month ago, the RIAA, A2IM, MAC and AFM finally got back to the table to continue negotiations on coming up with language to exempt music professionals for a potential clean up bill. A petition was started which garnered over 2,500 signatures in 24 hours. (SIGN IT) The A-list working musicians’ app Jammcard ran a survey of its members about AB5 and got some startling results back (more on this in a moment), Assembly members and Senators were FLOODED with letters, calls and tweets from the music community of California (thank you!) and I got a meeting with Assemblywoman Gonzalez.

Also, someone wrote a critical response on Medium to my article entitled, Ari’s (not so good) Take: A Measured Response.

Which he tweeted to Assemblywoman Gonzalez and she retweeted exclaiming “so well written!” In this piece, the author, Nathan York Jr., basically says that no one should fret because this won’t be enforced. And included the letter written by AFM Local 7 Vice President Edmund Velasco back in September when the law was signed – which contained extremely misleading, nay, false information about the effects of AB5 on working musicians. Either Velasco flat out lied to his members to save face and preempt the backlash or was just misinformed and passed along that misinformation. Unfortunately, this is what some musicians in support of AB5 are basing their opinions off of. And 10 different attorneys say that Velasco is flat out wrong and spread misinformation. So there’s that.

Nearly everyone (well all 5 musicians) who are in favor of AB5 (as it relates to music) bring up enforcement.

They say that we don’t need to worry because this will never be enforced. They are basically saying that we should just not comply with it and break the law. And that it’s actually a good thing because it gets us closer to forming a NEW union for musicians. A couple things about this argument: 1) intentionally not complying with the law hoping that no one will come after you is no way to run your business and 2) enforcement comes in many different forms. Will the Attorney General of California be knocking on indie musicians’ doors? Probably not. But the EDD (Employee Development Department) very well could. And do! One of the members in our meeting was recently audited by the EDD where they were checking to see if the people he issued 1099s were properly classified. So enforcement actually does happen. And not only that, if you have a disagreement with someone you hire for a gig and they really want to fuck you, they very well could sue you and bring up your non-compliance with this law. And once they bring this suit against you, you’ll now have a spotlight on you and will be an easy mark for the EDD.


So not complying, is not smart business.

Back to the meeting at hand.

I organized a group of 5 musicians to head down to Assemblywoman Gonzalez’s office in San Diego to plead our case:

Elmo Lovano (drummer and founder of Jammcard), Raquel Rodriguez (singer, songwriter, studio owner), Nick Campbell (bassist), Danica Pinner (cellist, string quartet member), Alicia Spillias (violinist, string quartet owner). My meeting was confirmed just about a week ago and the group and I had a very active email thread going, preparing for this meeting. On the drive down we talked the entire way down (not a single song was played!) prepping for what we were expecting was going to be a contentious meeting.

But let’s backup for a second.

The night before, I was at School Night in LA. Nick Campbell came up to me after he finished playing his set and said “Hey Ari, you know that guy who wrote the response to your article? Well, apparently Assemblywoman Gonzalez invited him to our meeting!” Nick was tipped off by his friend Martin Diller who Nathan York (the writer of the “Measured Response” piece) asked to join him for this. Martin had been similarly critical of my article in my comments section so apparently Nathan saw that and found an ally to join him. Martin called Nick as a courtesy because he figured we were in the dark about this and didn’t want us to be startled. Martin and Nick are friends and they do gigs together.

Assemblywoman Gonzalez did not give me a heads up about them joining our meeting.

I’m not exactly sure why she brought them into our meeting – especially without telling us about it. Maybe she was hoping for an all out brawl in her office. Maybe her Pay-Per-View subscription had expired and she was in need of some head to head entertainment. Regardless, it was a little odd that she surprised us with this. It could have completely derailed the meeting and our agenda. Maybe that was her intention? I’m not sure.

Luckily, we were tipped off. So on the drive down, literally 45 minutes before our meeting, we all got on a call together to attempt to work out our differences over the phone through stop and go traffic on the 5 to attempt to present a unified front going into the meeting. After 45 minutes of discussion, we realized we are actually much more closely aligned than our conflicting articles and comments would make it seem. All we needed was some time to hash it out. Luckily we were able to do that BEFORE walking into her office. Again, though, why she didn’t give us a heads up to have this discussion in advance and help everyone better prepare for the meeting is quite confusing.

The 9 of us (oh, Nathan and Martin brought an attorney with them. Cool.) piled into Assemblywoman Gonzalez’s office and I explained to her that we are all in support of the intentions behind AB5 – to help workers who are being taken advantage of by greedy corporations – but unfortunately this will be absolutely catastrophic to our business. The added costs we will incur to comply with this law will crush us. We went around the room and explained how we each run our business. How most of us are both “workers” and “employers.” Oftentimes on the same gig. Gonzalez asked very pointed questions and genuinely seemed to want to learn more about how we operate our business. She was very engaged and it was actually a really excellent conversation.

Nick mentioned how his accountant told him he could expect a 20% increase in costs for every musician he hires. My accountant estimated that it would cost an additional $6,000 or so a year to get fully setup and comply with this.

Gonzalez pushed back a bit and said that the “costs” are just being transferred – that someone has to pay these taxes and before it was the contractor and now it will be the employer. Which is not accurate. Most of these costs are not taxes, they are additional costs to comply. It’s the $300/mo payroll companies charge (you have to have a payroll company to withhold the proper taxes and issue payment). It’s payroll tax for each ‘employee.’ In any given year, I hire 40 or so music professionals for various gigs and studio sessions. Oftentimes for one-off gigs where they’re paid $100-200 or so. There is an added payroll tax for every single employee. Not to mention that payroll companies are not setup for one-off gigs and charge extra fees for short term ‘employees’ like this – with an additional cost to add a new employee. Previously, it cost me around $550 to file tax returns as a sole proprietorship with my accountant. As a corporation it will cost about $2,500. To register and maintain an LLC or S-Corp costs a minimum of $800/year (to be able to actually put people on payroll and W2 them).

+9 Things Singer/Songwriters Need to Know About Hiring Freelance Musicians

Not to mention that with the new Trump tax law, W2’d employees are no longer able to itemize their expenses like independent contractors are.

Since most musicians will have multiple (oftentimes 20+) “employers” in any given year – none of whom cover our expenses like equipment, rehearsal studios, recording studios, software, hardware, travel, lodging, food, etc. – we need the ability to write off these expenses. But if we are forced to be W2’d employees, we can’t do that anymore.

This is honestly just scratching the surface.

So there are actually quite a lot of added costs (and diminished benefits). What middle class musician can afford an additional $6,000 a year without it putting a serious strain on them? I honestly don’t know any.

Elmo shared the results of the Jammcard survey that was sent to their 4,000 California members (all vetted working music professionals):

Are you a member of the AFM (musicians union)?

64.8% – No I’m not

17.8% – Yes I am

13.2% – I used to be

2.4% – I am but I’d like not to be

1.7% – I don’t know what the AFM is

Do you make the majority of your income from union work or non union work?

97.6% – Non union

2.4% – Union

How do you prefer to be taxed as a music professional?

76.4% – 1099 (freelance/independent contractor)

15.6% – W2 (employee)

8% – I don’t know

Do you support California AB5 for music?

66.7% – I do not support it

8% – I support it

25.3% – I don’t know what it is

All in all, it worked out to be a very healthy discussion and she expressed willingness to create a ‘clean up bill’ and add clarification for the music community – essentially carving out certain music professionals from the law.

She explained that come January 6th when the Assembly is back in session, they can get to work on drafting language for the new Bill and once the language is agreed upon by all interested parties (us, RIAA, A2IM, AFM), they will vote on it. She did say that it will be voted on before September 1st (the deadline), but we shouldn’t expect it much sooner – these things take time.

+22 Musicians Who Made It After 30

But, and this is a huge Kardashian but, if this clean-up bill is passed, it will be retroactive. Meaning, even though nearly every musician in California will be in breach of this law come January 1st, this clean-up bill will essentially wipe away these, uh, crimes. So even though literally thousands of musicians will be breaking the law come January 1st, no one will be able to come after us once this clean-up bill is (hopefully) passed because it will in essence change the law from when it was enacted (January 1, 2020).

It was absolutely wonderful to meet with Assemblywoman Gonzalez with my fellow musicians and exercise our rights a bit. And I’m excited to continue to work with her to get this thing passed so musicians can continue to thrive in the state of California.

It seems like we’re moving in a positive direction, but we need to keep up the momentum to get us over the finish line. So! Please hit up your representatives and let them know that you’d like an exemption for music professionals.

You can find out who your representative is here.

About the Writer

Ari Herstand (pronounced Ar*ee Her*stand) is a Los Angeles based musician and fronts the band Brassroots District. Follow him on Instagram, Twitter and Facebook.

UNTIL NEXT TIME, THE COMMITTEE

I. Recent LA Pension Meeting

Thursday, October 17th, 2019

II. The Musicians for Pension Security’s Take

…Absolutely guaranteed anonymity – Former Musician’s Union officer


…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician


==================================

I. Recent LA Pension Meeting

A member’s reflection on the meeting:

Personal  thoughts?

Many of the big dollar members…took their pensions early.  Being privy to what was coming down the road …(being the most represented and engaged in THEIR business)…THEY captured any reduction by taking THEIR money up front…mostly the studio players…the orchestra players had to give up their tenure and hope they could still remain “on the list” after the required lapse of time to return to work.  

About the info-meeting itself…It was a just to be expected. Infomercial about the state of the state…just an opportunity to give the rank -and – file the proper lexicon of the situation. 

The pension meeting at the Marriot Convention Center in Burbank was video taped and will be posted on the web.  It was an informational meeting designed to clarify the problems and the process for keeping the pension plan solvent.  

The attached link covers the general information that was presented at the meeting. 

https://www.afm-epf.org/StayInformed/FundStatusFAQs.aspx

===========================

II. The Musicians for Pension Security’s Take

https://www.musiciansforpensionsecurity.com/

RECENT COURT FILING REVEALS RISKY AND IMPRODENT INVESTMENT DECISIONS by TRUSTEES

July 29,2019

New revelations have emerged in the class action lawsuit filed by AFM Local 802 members Andy Snitzer and Paul Livant in Federal District Court, Southern District of New York. A recent court filing by the attorney for the plan participants, Steven Schwartz, details how risky and imprudent investment decisions by our trustees led us to where we are today.

The filing, which you can access here, compares the AFM-EPF investment strategy to that of other large multiemployer pension plans. That comparison showed a “stark departure in terms of asset allocation from other large Taft-Hartley

[multiemployer]

plans.” The filing continues:

“[The AFM-EPF’s] allocations to risky asset classes were so far out of the norm that none of the witnesses, including Defendants’ [trustees’] own experts, have identified any other Taft-Hartley [multiemployer] or other large pension plan with a similarly uber-aggressive asset allocation.”

The attorney for the Plan participants goes on to describe the undisputed evidence showing that AFM-EPF investments were way out of pattern with the other multiemployer plans:

“The undisputed record reflects that our Trustees’ asset allocations were objectively out of the norm. For example, the parties’ experts cite data from the Wiltshire Trust Universe Comparison Service and from the Plan’s former Investment Consultant Meketa showing the Plan’s stark departure in terms of asset allocation from other large Taft-Hartley plans. The data shows the median large Taft-Hartley plan had no less than 45% of assets invested in domestic equities; the Trustees here reduced our Plan’s actual domestic equity allocation from 40% in 2009 to as low as 19%. The reduction in the domestic equity allocation was accompanied by an increase in the allocation to Emerging Markets Equities to as high as 15%, even though the average plan had no more than 4.5%; an increase of the total allocation to international equities of up to 30%, even though the median Taft-Hartley Plan had no more than 12%; and an increase of up to 26% in alternatives including Private Equity and Real Estate, whereas the median plan had no more than 12%.”

These facts shed light on why the Judge in the case, the Honorable Valerie Caproni, previously called the trustees’ investment approach “extraordinarily risky,” and said the following: “I mean they adopted an exceedingly risky strategy and that is part of the gestalt of the facts.”

As our own AFM-EPF plan actuary, Kevin Campe, wrote in a recent Milliman study: “The primary driver of multiemployer health continues to be asset performance.” (Kevin Campe, Milliman Multiemployer Pension Funding Study, 2018.) Unfortunately, that’s precisely where our trustees let us down.

Musicians across the country now face the reality of impending cuts to our hard-earned benefits. And yet we still have the same board of trustees that put us in this position. The AFM-EPF board needs new trustees who have the ability to supervise the investment advisors. Without real reform, we may find that the current round of cuts is just the first in an ongoing series of cuts over the next few decades.

==================================

Next time. Fi-core Rights Recap

Until then,

THE COMMITTEE

FOOL ME ONCE / BOSTON CONVICTIONS / COMMENT

Friday, August 16th, 2019

I. FOOL ME ONCE…

II. BOSTON CONVICTIONS

III. COMMENT

…Absolutely guaranteed anonymity – Former Musician’s Union officer

…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician

============================================

I. FOOL ME ONCE

Message from a current Local 47 member.

Local 47 officials moved heaven and earth to sell our former historic home and purchase a new soulless box that they said would solve so many problems and secure our financial future. That action has done exactly the opposite.

One of the past elected officers was right.  Local 47 does not have a good track record when it comes to managing projects.

After nearly two years without a quorum, Local 47 finally achieved the minimum of 50 to hold a formal General Membership Meeting, July 22, 2019.

The Local 47 officers gave their reports. The financial team of Blackrock and Merrill Lynch gave the membership their approach to managing the Musicians’ Club assets.

It is very clear that “Phase Two” (the promised “Multi-Purpose Room”) will probably not be built under present financial conditions.

Fact: “The Time is Now” campaign projected that there would be a 9-11 million dollars in endowment left after the sale of Vine Street. After the purchase and renovation of the new location, this turned out not to be true.

Fact: There is a little over 4 Million dollars being invested and every cent will be needed to pay the triple expenses of the property taxes and whatever else on the Winona property. The Board did not even want to spend the money to properly repair the multiple leaks from the big rains of the current season. Instead, opting to have their plumbing company contract to patch the roof areas with a two-year warranty. The cost of a proper repair would have likely taken the Club investment balance below the 4-Million-dollar mark.

Fact: Local 47 moved its headquarters out of the center of Hollywood into a non-descript building surrounded by an industrial park, two New York blocks from a major airport landing strip.

This last week the Union sent an email to the membership to take a Member Survey.  One of the questions reads as follows: At our former Hollywood headquarters we had an Auditorium. Would you like to see our current Burbank headquarters have a similar multi-purpose facility? Why or why not?

The writing is on the wall. The membership is being manipulated once again. It appears the game plan is to point to the survey and say well, the membership response (notorious for low participation) will not justify moving forward with “Phase Two”. The real reason is that the reality of adding more square footage will only increase the property taxes and overall expenses.

The Board has endeavored to try and get a big company and/or a high profile industry name to give several million for naming rights to “Phase Two”. Vice-President Baptist has opined that “we need an angel”.

Many CBA orchestras which are non-profit entities and other possible renters have been displaced from Local 47 rehearsal spaces.  How many CBA orchestras have been possibly compromised because of the reduction of supportive resources?

One other issue that came up was the new software program that Local 47 is creating with hopes of generating a revenue stream by making it accessible to other locals. No cost was discussed. Rumor has it that the cost is around $200K. How much money will this software program generate?

The Local lost tenants in the move and there is not a lot of extra space to rent. The question is whether this software “Ensemble 2” program will give Local 47 access to other locals’ membership and work data? Just asking?

At any rate, Pres. John Acosta, VP, Rick Baptist, Sec.- Treas. Gary Lasley, and the Executive Board, are spending more time, energy and money on the politics of going after government subsidies.  It would be nice if the subsidies benefited more than just a small fraction of the 6200 dues paying members.

Local 47 Member, In Good Standing

============================================

II. BOSTON CONVICTIONS

Two Boston City Hall Aides Convicted of Conspiring to Extort Music Festival Production Company

BOSTON – The City of Boston’s Director of Intergovernmental Affairs, Timothy Sullivan, and Kenneth Brissette, the Director of the City’s Office of Tourism, Sports and Entertainment were convicted today by a federal jury in Boston in connection with extorting a music festival production company operating on City Hall Plaza. 

Brissette and Sullivan both were convicted of Hobbs Act conspiracy, and Brissette was also convicted of Hobbs Act extortion.  The Court has not yet scheduled sentencing dates.

“This afternoon, a federal jury convicted Kenneth Brissette and Timothy Sullivan of extorting a private business to hire union labor that they did not want or need,” said United States Attorney Andrew E. Lelling. “Private companies that want to do business in Boston have the right to hire anyone they want – union or not – without fear of being threatened with economic disaster by government officials. That is the law. This was a hard fought victory, and one that reaffirms our commitment to take on cases that are in the public interest.”

“The FBI thanks the jury for their service and thoughtful deliberations,” said Joseph R. Bonavolonta, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division. “Today’s verdicts show that public officials cannot use their positions to extort those who choose to use non-union labor. The FBI will not stand idly by while hard-working individuals are bullied and strong-armed by public servants. Everyone deserves access to a level playing field, and the excuse of “business as usual” isn’t good enough to earnest citizens who rely on  their own local governments to do right by them and their families. Let this case be a warning to municipal workers everywhere, it is the taxpayers they serve and answer to at the end of the day.”

“Today’s convictions affirm the U.S. Department of Labor Office of Inspector General’s commitment to protecting the American workers from extortion and unlawful influence. The defendants used threats of financial harm to obtain wages from a television production company for services that were not needed or required. We will continue working with our law enforcement partners to combat this type of criminal activity,” said Michael C. Mikulka, Special Agent-in-Charge, New York Region, U.S. Department of Labor Office of Inspector General.

Between June and September 2014, while a music festival production company was awaiting the issuance of certain permits and approvals required for its event, and seeking an agreement from the City of Boston to use City Hall Plaza for events beyond 2017, Brissette and Sullivan repeatedly advised the company that it would need to hire members of the International Alliance of Theatrical Stage Employees (IATSE) Local 11 to work the event. Local 11 had attempted to obtain work from the production company since March 2013. The production company told Brissette and Sullivan that it had already entered into a contract with a non-union company and hired all of its labor. Nevertheless, on Sept. 2, 2014, three days before the music festival was scheduled to begin, Brissette and Sullivan insisted that half of the production company’s labor force consist of union members. The production company agreed to hire nine members of Local 11 and entered into a contract with the union because they feared the company would be financially ruined if they did not accede to the these City officials’ demands.

The charge of extortion provides a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. The charge of conspiracy to extort provides a sentence of up to 20 years in prison, three years of supervised release and a fine of $250,000. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.

U.S. Attorney Lelling, FBI SAC Joseph R. Bonavolonta, and DOL OIG SAC Mikulka made the announcement today. Assistant U.S. Attorneys Laura J. Kaplan and Kristina E. Barclay of Lelling’s Criminal Division are prosecuting the case.

August 7th, 2019

https://tinyurl.com/y2373vcv

============================================

III. COMMENT

Oh yeah – the so-called powerful Petrillo who cost us all the network staff jobs because we weren’t allowed to strike the networks…I was at network staff negotiations in the 60s when we were forced to reduce staffs from 65 to 25. Petrillo – no longer AFM prez sat snoozing in a chair not far from me.

As radio developed, network staff orchestras flourished not only in New York, Chicago and Los Angeles but also in cities like Denver and Pittsburgh where smaller radio orchestras were employed. In an attempt to force the hiring of more musicians at local radio stations, AFM President James Petrillo (1940-1958) called various strikes against them, causing Congress to write the Lea Act (also known as the Petrillo Act). Passed by Congress in 1946 and upheld by the Supreme Court in 1947, it was aimed specifically at preventing “featherbedding” in the broadcasting industry, severely restricting the AFM’s ability to bargain with industry for higher wages and more jobs. It was repealed in 1980 long after the demise of staff orchestras.

============================================

Until Next Time,

The Committee

GIOCCHINO SPEECH / BROADWAY / HAIR UNOPPOSED / PICKETING AMPTP

Thursday, July 4th, 2019
  1. GIOCCHINO SPEECH EXCERPT
  2. NEW BROADWAY AGREEMENT
  3. RAY HAIR UNOPPOSED – AGAIN
  4. RECORDING MUSICIANS PICKET AMPTP

…Absolutely guaranteed anonymity – Former Musician’s Union officer

…The one voice of reason in a sea of insanity – Nashville ‘first call’ scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician

========================

I. GIOCCHINO SPEECH EXCERPT

This is excerpted from a Variety Article about the ASCAP Awards, you can read the full article here:

https://tinyurl.com/yy6kbg6t

Michael Giocchino was introduced in person by Brad Bird (“The Incredibles,” “Tomorrowland”) and, via video, J.J. Abrams, Giacchino used his time at the microphone to preach the importance of the musicians who perform his music.

“Musicians are a composer’s life blood,” he said. “Without them, all we have are little black dots.”

Then he got serious, addressing the exodus over the past decade-plus of screen music recording done in Los Angeles.

“I can’t help but wonder how we went from an industry with work for every musician in town to an industry where a fractured community is rife with players who can barely find employment — struggling to hold onto jobs, and in many cases having to take non-music work in-between gigs just to survive.”

Giacchino admitted that he’s recorded outside of L.A. a few times, but he issued a direct challenge to the musicians union, and to his peers and any filmmakers in the room: “When a small independent producer wants to score here, let’s find a way to make it happen, not push them away. When you as a producer have a project, try to make it work here first. We have to say no to living under the shadow of a small group of people who use threats and inaccurate information to hold onto a business model that continues to strangle progress.” 

He strongly clarified that he isn’t anti-union, as the proud son of two lifelong union members — “but I watched over the years as they stood up to the status quo, demanding change from their leadership when the environment was working against their better interest,” he said. “And when an environment does change, survival and growth will go to the organisms that can adapt. It will not be easy, but the ability to adapt is the path to prosperity and survival.”

Giacchino’s barnburner speech was met with a standing ovation. 

========================

II. NEW BROADWAY AGREEMENT INCLUDES 401K OPTION

Having given up on the AFM Pension’s future…

BREAKING NEWS: 802 musicians have ratified an agreement with the Broadway League by a 93% margin. The landmark deal includes the largest wage increase in 20+ years, a 23% increase in healthcare contributions, and a first-ever 401(k) plan option. By standing united for fair wages & retirement security, the Musicians of Broadway have won a historic deal.

========================

III. RAY HAIR RE-ELECTED UNOPPOSED – AGAIN

Ray Hair has been re-elected international president of the American Federation of Musicians at the union’s 101st convention in Las Vegas. Hair, who has been president of the 80,000-member union since 2010, ran unopposed, as he did in the union’s last two elections.

Also running unopposed this time were incumbents Bruce Fife, international vice president; Alan Willaert, the AFM’s vice president from Canada; and Jay Blumenthal, the union’s international secretary-treasurer.

“It’s about sticking together, and protecting each other, because together, we can,” Hair said. “That is the meaning of real unionism. This convention is about what we can do together, about remembering who we are, what we did, and what we can be.”

[EC: They also allowed Tino to stay on the International Executive Board (Being paid by member dues) even though he lost his last election and is no longer President of any local.

We understand he remains on the pension board as well.

When asked about this, one east coast member said:

“The bylaws need to be changed to prevent this. To me this proves that they are corrupt and on the take. They’re getting kickbacks from the investment firms…”]

=======================

IV. RECORDING MUSICIANS PICKET AMPTP

https://tinyurl.com/y2lqjbes

Musicians Union Rallies for Streaming Residuals, Seeking to End Disparity With Other Guilds

They’re “sticking it to musicians [and] that’s not fair, that’s not right,” said one AFM Local 47 leader.

Over one hundred members and supporters of the American Federation of Musicians Local 47 rallied Thursday at the Sherman Oaks headquarters of the Alliance of Motion Picture and Television Producers, demanding something that above-the-line guilds achieved in 2014 and enhanced in 2017: residuals on product made for streaming services such as Netflix and its coming wave of competitors from Disney, Comcast and others.

Obtaining contracts that harmonize with the other guilds’ would be sweet music for Local 47, but so far the instrumentalists are finding themselves drummed out by the AMPTP. As the industry pivots ever more toward streaming video on demand platforms, musicians assert they are being left behind. They get no residuals on SVOD product.

It’s a familiar place for the AFM, since — even before SVOD — musicians were (and remain) subject to contracts that pay out residuals under far fewer circumstances than directors, writers and actors enjoy; the checks are smaller too. But the sotto voce contracts are also a bitter irony, because the AFM was a powerhouse in the earliest fights for residuals during the 1940s and ’50s.

“We are through being scared, we are though being pushed around, we are through being treated like second-class citizens,” said Jason Poss, a Local 47 member who is one of the leaders of the union’s effort. “We know they make huge profits on streaming media. We know they can afford to pay everyone properly and still make millions.… They don’t get to make more by sticking it to musicians. That’s not fair, that’s not right, and today they will know that we are standing together because we will not allow it.”

But it’s a tough fight. Gone are the days when huge orchestras routinely convened on studio lots. Offshoring of work has been a concern for half a century, and today it is even easier thanks to the Internet and other telecom technology, with London and Eastern Europe as popular destinations. The union’s existing TV and theatrical contracts expired over a year ago, then were extended to this November but without progress on the residuals issue.

In addition to Poss, other speakers at the rally were UTLA (teachers union) vp Juan Ramirez, SAG-AFTRA secretary-treasurer Jane Austin, WGA West executive board member Angelina Burnett, Local 47 musician Lara Wickes and Local 47 musician and executive board member Dylan Hart.

Poss also attempted to deliver residuals petitions signed by over 500 members to the AMPTP, but was rebuffed when the organization refused to answer the intercom and building security kept the front door locked.

The shoe was on the other foot almost 80 years ago though. In those days, the AFM was powerful enough to resist entreaties from management, the general public and even the U.S. president, maintaining a two-year strike against the radio and record industries even during wartime and despite an appeal from no less than FDR.

That labor action, the so-called Recording Ban of 1942-44, and a 1948 Recording Ban, were led by the AFM’s then-legendary leader James Petrillo and were instrumental in securing some of the earliest residuals. But that was then. Now the question has become whether a vastly weaker union can muster the crescendo necessary to convince the AMPTP to welcome players into fuller membership in the residuals club — or whether a de-residualized solo will be the union’s fate.

Jonathan Handel, Hollywood Reporter

========================

Till next time,

THE COMMITTEE

ADMINISTRATION OUSTED / STREAMING BUYOUT? No. / AFM DEFLECTION / MEMBERS COMMENTS

Monday, June 17th, 2019

COMMITTEE NEWSLETTER

*** Convention Edition – WELCOME TO YOUR CONVENTION IN VEGAS, AFM ***

…Absolutely guaranteed anonymity – Former Musician’s Union officer

…The one voice of reason in a sea of insanity – Nashville ‘first call’ scoring musician

…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician

  1. ANOTHER ADMINISTRATION DISMISSED – LOCAL 77
  2. BUYOUT STREAMING CONTRACTS? NOPE.
  3. MORE DEFLECTION FROM THE AFM
  4. MEMBER COMMENTS

===================================

I) ANOTHER ADMINISTRATION DISMISSED

A short time ago, the entire administration of AFM Local 802 of New York was voted out of office by their membership.

Now comes news that the administration of AFM’s Philadelphia Local 77 has had their administration voted out of office as well.

Seems change is in the wind, with members across the federation fed up with the status quo.

Who’s next?

In another development showing the level of corruption at the AFM: After the former president of Local 802 was dismissed, the NOW former president of Local 77 (Philadelphia) was lobbying to gather the votes needed to allow the FORMER president of Local 802 to stay on the International Executive Board, even though he is no longer the president of any Local. Favoritism or cronyism? You decide.

====================================

II) BUYOUT STREAMING CONTRACT? NOPE.

Recently a recording entity in Los Angeles put an advertisement on youtube announcing the availability of a “Buyout” Contract for streaming services. Problem is, none of the ones we found is a buyout. It doesn’t exist.

We’ve looked at all the available streaming contracts and here is what we found:

• Live Concert AVOD/SVOD Internet Streaming Agreement

Streaming of the performances beyond the initial six (6) month cycle shall require an additional aggregate payment of 7% of any future gross receipts for each subsequent six (6) month cycle, with 3.5% to be forwarded to the appropriate Local for distribution on a pro rata basis to all Side Musicians, Leaders, Contractors and Music Preparation Musicians….

(No buyout here….)

  • On Demand Internet Streaming

Streaming of the performances beyond the initial six (6) month cycle shall require an additional aggregate payment of 6.6% of any future gross receipts for each subsequent six (6) month cycle, to be forwarded to the appropriate Local for distribution on a pro rata basis to all Side Musicians, Leaders, Contractors and Music Preparation Musicians.

(Or here….)

  •  Live Internet Streaming

Use of the performances for on-demand internet streaming for second and future cycles, shall require an additional aggregate payment of 6.6% of any future gross receipts for each subsequent six (6) month cycle, to be distributed pro rata to all Side Musicians, Leaders, Contractors and Music Preparation Musicians.

(Or here….)

  • Television Videotape Agreement January 27, 2013 – February 2, 2016

If an original New Media Production budgeted at more than $25,000 per minute (using the same cost elements as described in the third paragraph of Paragraph A above) or a Derivative New Media Production is initially released simultaneously on free-to-the-consumer, advertiser-supported platforms and to consumer-pay platforms (i.e., download-to-rent, download-to-own or paid streaming), then Producer shall have a twenty-six (26) consecutive week period of use on consumer-pay platforms, commencing with the first day of use on consumer-pay platforms, without the payment of residuals. If the Producer uses the New Media Production on consumer-pay platforms beyond such twenty-six (26) consecutive week period, then Producer shall pay 1% of the “Producer’s gross,” as that term is defined in Paragraph 9 of Side Letter 11 (“Exhibition of Television Programs Transmitted Via New Media”) realized from any subsequent license that includes use on consumer-pay platforms, which “gross” is attributable to use on consumer-pay platforms beyond the twenty-six (26) consecutive week period, measured from the first day of use on consumer-pay platforms under the first license. Said amount shall be paid to the Film Musicians Secondary Markets Fund on behalf of musicians employed on the New Media Production.

 “Meaning: first 26 weeks are free, then 1% of gross proceeds need to be paid to Film Musicians Secondary Markets Fund on behalf of musicians employed on the New Media Production.”

(No buyout after 26 weeks….)

This means, in every case above someone (A company) has to sign an assumption agreement. If they are not already a signatory that’s unlikely to happen, which means it’ll go elsewhere or nonunion.

Whomever put out the youtube video should read the fine print.

====================================

III) MORE DEFLECTION FROM THE AFM

Local 802 is trying to blame Trump’s NLRB for the rise in members going Fi-Core. While we’re no fan of Trump by any stretch, to blame Trump for the rise is musicians choosing fi-core (A multi-year trend) is absurd and a pathetic attempt at deflection.

Please read the article below yourself:

This is how the Trump NLRB is targeting unions

By encouraging union members to choose “financial core” status, the NLRB has taken a decidedly anti-union stance

Volume 119, No. 6June, 2019

HARVEY MARS, ESQ.

[email protected]

Out of all of the oxymorons that exist in the legal world, the phrase “right to work” has to be one of the worst. Those of us who are labor activists know that “right to work” really means “right to work…for less pay!” The “right to work” doctrine gives workers the opportunity to get a free ride on the backs of those who actually pay for the union.

There are currently 26 “right to work” states in the country and 24 states where “right to work” is not law. In those states, Section 8(a)(3) of the National Labor Relations Act allows union contracts to compel union membership as one of the conditions of being employed. These provisions, known as union security clauses, greatly assist unions in both collecting dues and also preserving majority status in a workplace. Without majority status, an employer doesn’t have to recognize a union as the collective bargaining agent of a group of workers. The union security clause also prevents “free riders” – workers who desire to reap the benefits of the union without financially supporting it.

However, as a result of several Supreme Court decisions, the requirement to join a union has been whittled down to what is commonly known as “financial core”,

 status. Workers who are required in their contract to join the union can request “financial core” status. When workers request this status, a union cannot charge them for services that are not part of “representational functions,” such as collective bargaining, grievance adjustment and contract administration services. What services a union can charge a financial core member is often the subject of debate, and most unions have appeal processes that permit members to challenge fees if they believe they are not part and parcel of union representational functions. This controversial subject has now engaged the attention of the National Labor Relations Board.

In March, the NLRB decided that union lobbying costs are not a chargeable union expense. (The case was United Nurses & Allied Professionals [Kent Hospital] 367 NLRB No. 94 [March 1, 2019]). On a technical level, the board wrote that lobbying is not the kind of activity that is a necessary part of a union’s statutory function as exclusive bargaining representative and thus falls outside the scope of permissible fees that may be charged to financial core members. Even though lobbying efforts may impact representational functions, the NLRB held that it is still too far removed from representational functions to be chargeable. Thus a private sector union (like Local 802) will have violated its duty of fair representation if it charges lobbying costs to an objecting member. Additionally, any costs remotely related to lobbying efforts cannot be charged.

This decision clearly hobbles a union’s effort to support beneficial legislation (such as national pension reform) by compelling it to front the costs for objecting members. To add insult to injury, the NLRB’s Office of General Counsel recently issued a directive that completely shifts the burden when a financial core member wishes to challenge a reimbursable union expenditure.

When presented with a charge they believe is improper, a financial core member has two choices: (1) proceed with a challenge utilizing the union’s internal procedure or (2) file an unfair labor practice charge alleging breach of duty of fair representation.

Prior to the new directive, the NLRB required financial core members to first utilize the internal union process before filing an unfair labor practice charge. The new edict now permits unfair labor practice charges to proceed independently of internal objections.

Furthermore, in a break from precedent, the NLRB will no longer require financial core members who file ULPs to explain why they believe a particular expenditure is improper. When a ULP challenging a union assessment is filed, the NLRB will now require the union to provide a “detailed explanation of the union’s chargeability decisions for each major category of expenses.”

With the burden now shifted, it is obvious that the NLRB has taken a decidedly anti-union stance. It is inevitable that more objections will be lodged and more expenses will be deemed non-chargeable.

As a result of these NLRB decisions, it is now more important than ever that union members be educated regarding the benefits of full membership and how the NLRB is prompting the financial ruination of unions by encouraging financial core membership. An informed membership is a strong membership!

——–

Good point above,.. so let’s do the same for Fi-Core:

Choosing Financial Core (Beck Status):

  1. You pay 85 % of the dues full AFM members pay.
  2. Paying for union negotiations is already part of the fi-core fee.
  3. The only part of dues a fi-core musician doesn’t pay is money that goes to political campaigns or candidates.
  4. You are not included in the directory.
  5. You cannot attend meetings.
  6. You cannot use a Local’s facilities (Though your dues pays for the upkeep.)

HOWEVER…

  • You CAN work on any union contract and in any Collective Bargaining Agreement ensemble, and you will pay all applicable fees (Pension, Work Dues, etc.)
  • You CAN work on any nonunion job without fear of fines.

There is the phrase “Right to Work” (for less); but for more and more folks the phrase means “Right to Work (AT ALL).

This is particularly true of recording. Anyone who has been or is a member interested in media recording knows this.

WHY ARE MUSICIANS GOING FI-CORE?

People are going fi-core because 90% (maybe more at this point) of the union recording work is gone. The only hope they have of recording in a studio is on a non-union session, and don’t kid yourself, all the so-called “A” listers do non-unions sessions as well.

WHY IS IT GONE?

Because you can record anywhere in the world without paying a back end (Secondary Market Payments) EXCEPT with the American Federation of Musicians.

People have finally reached a point where they are done playing by the AFM’s rules because they have mortgages and bills to pay. Look at Seattle and Nashville. They are working hand over fist because the UNION work, the little that is left, is controlled by and funneled to perhaps .2 percent of AFM Members. Put simply, the rank and file need to work and they will not get that work through the union.

There are even a few other locales in the United States that have decided it’s time to work and are doing what they have to to get the work. Some of those entities are actually the ones bringing work back from Eastern Europe for US musicians, not the union. In most cases it’s work that would never be union in any case.

Let’s say you are a company or production house and need music for your production.

Your choices are:

  1. All synth (Terrible, but sometimes the only option.)
  2. A couple of live players over synth. (Far better but not what composers want.)
  3. Live orchestra – Union (a good choice, but companies will only sign assumption agreements if they have to. You also have to deal with the hassle, paperwork and backend payments.
  4. Orchestra (non-union) Little hassle, far cheaper in the long run and you own what you record.

So let’s be serious, if you have the choice of recording union here (more expensive, more hassle.) or recording in London cheaper with no strings, what are you going to do?

Save the platitudes, you know what you’d do if it’s your money.

The main argument? Well they have to keep books open for the actors, director etc. Why not for musicians?

Because there’s only one Tom Hanks or Francis Ford Coppola, but there are world class musicians everywhere in the world. The AFM has simply priced themselves out of the market with strings you don’t have anywhere else.

THE PENSION?

The situation with the pension is getting worse because more are drawing pension and fewer are contributing, because the work isn’t there. It’s simple math.

You can read up on all the latest pension news here.

https://www.musiciansforpensionsecurity.com/news

HOW CAN WE BUILD THE PENSION BACK UP?

Bring work back.

HOW DO WE GET WORK BACK?

Buyout contracts.

WHY DON’T WE HAVE BUYOUT CONTRACTS

Because the AFM is allowing itself to be influenced by a small special interest group to the detriment of 99+% of the other AFM Members.

Until that influence is gone, nothing will improve.

As was said before, there are literally DOZENS of places a company can record without harassment and difficulties (and backend) throughout the world: London, France, Mexico, Canada, Macedonia, Prague and Bratislava to name only a few.

Everyone knows the problem, everyone knows how to fix the problem, but for some reason people are still afraid to point to the Elephant in the Room. As long as the cowardice continues, the AFM will continue to shed members, become even more of a paper tiger and eventually cease to exist in the recording world.

The membership knows what to do. What will it take for them to do it?

=====================================

IV) MEMBER COMMENTS

Posting here so hopefully someone from the community will distribute my message:
To My Fellow Members of the Musician Community:

I recently was part of the Lion King Orchestra. Although I was grateful for the call that came from a contractor, Peter Rotter, who I don’t regularly work for, the experience left me feeling marginalized. Just entering the room on the first day, I realized why I was hired. They needed a room full of black people. That’s it. The other times Rotter has had a “black” room is when its been for Spike Lee, Denzel Washington, Dr. Dre, and whenever there’s a black producer/director in the booth he needs to prove something to.

I have a degree from a prestigious institution, play among the highest caliber players in the world in major orchestras and ensembles, yet I was only called for the color of my skin. Throughout the services, I heard things from the very white employers like “wow, this is a mixed group”. And the photos that these self-important white conductor, composer, contractor and concertmaster proudly posted showing that they hired us is nothing short of racist. I feel degraded by the whole experience, and I know that speaking to so many of the other black players there, that they shared in my horror.

You won’t see me working for PR again, not that he would ever call me for my qualifications.

I’m speaking out to encourage others to share their experiences that they shared with me privately.

———————

hello editor!

Just in case the membership believes that members “in good standing” are “welcomed” to “observe” the weekly Board of Directors meetings at the Local.  Pleased be advised….there was a final and farewell meeting of a Board member who has decided to move from California…the Local had a buffet delivered (trays of various items).  Pres. Acosta suggested a “working lunch”.  The “one” observer was not invited…only welcomed to “observe”.

Sigh…

——————

Hello,
Interesting blog.
I’m well versed on the original 19 NLRB charges brought against Hair and his thugs. The true definition of the 14 guilty charges is forthcoming.

It’s rare with the NLRB to get one charge to stick let alone 14. The AFM’s email that was sent to it’s members/musicians is a typical inaccurate AFM smoke screen. The NLRB is part of the federal government and are well aware of their latest tactics…it’s now a serious matter. Also, there are other Federal Government agencies currently investigating the AFM. Tip of the iceberg….

Let me know if you need anything from me or my legal team.

—————

From Larry Lippold

A good start. I thought Tino was going to come after me when I asked whether we need some people on the Pension board who knew something about investments at the TMA meeting a few months ago. Of course the Broadway musicians have a huge interest in the plan, as they are putting a huge percentage of their checks into the plan (I think it is 18%).

Getting Tino’s predecessor and Vince Trombetta off the board wouldn’t hurt either.

—————–

In reply to larry lippold.

A typical response by someone without knowledge of how the AFM-EPF and its board of trustees works. The board does not directly act in investing, hiring the same well-known actuaries and investment firms as do other funds. B’way musicians do not contribute out of their checks .Mgt. does the contributing based on an arbritator’s (Turkus) award from the ’60s giving musicians a percentage of ticket sales which has grown over the years as ticket prices have increased. Union-side trustees are appointed by the AFM president so no change there unless he wants it.

————–

From Billy Sullivan

Getting a larger membership won’t fund what’s already underfunded.
That money should already be there by the pension contributions so far.
Where did the money go? Did someone take it or was it invested poorly?

————–

In reply to Billy Sullivan.

A series of mistakes by actuaries responding to the Fed’s “overfunding” rules leading to upping the multiplier to 4.65 to current and RETROACIVE accounts plus the ’08 financial meltdown led to the AFM-EPF’s current troubles. Nobody took the money. 802’s president is but one of 16 trustees, unable to cure the fund’s problems as the new know-nothing presiddent will find out. He will not even be appointed to the board.

—————-

Hello Friends
Where has the blog gone? I sure hope it has not gone away!
Thank you for it!

[EC: Oh we’re still here, but not every week. We’ll be distributing through social media, so when we post please get it to all the AFM Members you know.]

—————-

Feel free to TEXT MESSAGE your Local 47 “President” John Acosta and let him know what YOU THINK about the job he is doing: 323-337-7631

UNTL NEXT TIME,

THE COMMITTEE

817 / NLRB / AFM / QUESTION

Wednesday, May 15th, 2019

5/15/19

  1. WELL, AT LEAST IT’S STILL IN THE INDUSTRY
  2. LOOK AT WHO’S HAD TO CHANGE THEIR BYLAWS
  3. CLARIFYING THE UNCLEAR – WHICH IS DOESN’T
  4. A QUESTION

…Absolutely guaranteed anonymity – Former Musician’s Union officer


…The one voice of reason in a sea of insanity – Nashville ‘first call’
scoring musician



…Allows us to speak our minds without fear of reprisal – L.A. Symphonic musician

…Reporting issues the Musicians Union doesn’t dare to mention – National touring musician


================================

  1. WELL, AT LEAST IT’S STILL IN THE INDUSTRY

Netflix to expand again in Hollywood with two more office leases

By Roger Vincent

https://www.latimes.com/business/la-fi-netflix-hollywood-leases-20190429-story.html

Video-streaming giant Netflix continues to rapidly expand its presence in Hollywood, signing two more leases in the neighborhood and furthering its position as one of the biggest office tenants in Los Angeles.

Netflix recently agreed to lease a total of nearly 170,000 square feet in two locations, according to people with knowledge of the deals who were not authorized to discuss them.

Although the company is based in the Silicon Valley city of Los Gatos, its Los Angeles footprint of offices and production space is growing immense. Netflix occupies, or has agreed to move into, about 1.6 million square feet of space in the area.

The media company that distributes movies, television shows and documentaries will rent 100,000 square feet of offices on a campus being built on property formerly owned by the Musician’s Union of Hollywood at 817 Vine St.

It has also sublet nearly 70,000 square feet in a 1990s office building at 1350 N. Western Ave. The address is north of the 101 Freeway, which has commonly been regarded as the northern boundary of Hollywood’s business district.

Netflix is a sub-tenant there of ZestFinance, which previously occupied the building owned by LaTerra Development and Gemdale USA. Nextflix is expected to move in within two months.

The campus on Vine Street at Waring Avenue is being developed by LPC West, a division of Lincoln Property Co. The complex catering to the entertainment industry includes a new building and a renovated two-story structure built in 1950 to serve as a clubhouse and organization headquarters for the union now known as the American Federation of Musicians Local 47. It is set to be completed this year.

The company and its office landlords declined to comment on the latest leases, which were first reported by the Real Deal real estate news website.

The leases follow other large real estate deals by Netflix.

Landlord Kilroy Realty said in November that Netflix will occupy 355,000 square feet of offices in a mixed-use complex called Academy on Vine that Kilroy is building on Vine Street just south of the ArcLight Cinemas complex that is home to the famous Cinerama Dome movie theater. It is set to open in 2020.

In October, another Hollywood landlord, Hudson Pacific Properties Inc., announced that Netflix would lease all of a 13-story tower it is building on Sunset Boulevard across from Sunset Bronson Studios. That lease for 328,000 square feet is also set to begin in 2020, when the tower, called Epic, will be completed.

Netflix already occupies offices and studios on the Sunset Bronson Studios lot owned by Hudson Pacific.

Netflix, which once relied on streaming licensed movies and television shows made by other studios, is on a growth streak as it aggressively remakes itself into a Hollywood player by creating a torrent of original content. The company is expected to spend $15 billion on content this year.

To deepen its ties to filmmakers, Netflix has been in talks to buy the storied Egyptian Theatre from American Cinematheque, the L.A. nonprofit that owns the venue known for hosting special screenings and events on Hollywood Boulevard.

NOTICE TO EMPLOYEES AND MEMBERS

—————————————————————-

II. LOOK AT WHO’S HAD TO CHANGE THEIR BYLAWS

From the NLRB:

Posted pursuant to a settlement agreement approved by a regional director of the National Labor Relations Board.

An agency of the United States Government.

• Form, join or assist a union;

SECTION 7 of the NATIONAL LABOR RELATIONS ACT, A FEDERAL LAW, GIVES YOU THE RIGHT TO:

• Choose a representative to bargain with your employer on your behalf;

• Act together with other employees for your benefit and protection;

• Choose not to engage in any of these protected activities.

WE WILL NOT do anything to prevent you from exercising the above rights.

WE WILL NOT maintain overly broad language in our bylaws that interferes with your right to engage in Section 7 activity, contained in Article 8, Section 3, which provides, in relevant part: “Members shall not render musical services…. With or for people who have been employed by… or are otherwise associated with organizations or establishments that are listed on the International Unfair List.

WE WILL NOT in any like or related manner restrain or coerce you in the exercise of your rights under Section 7 of the Act.

WE WILL rescind and remove the overly broad language, described above, from Article 8, Section 3 of our bylaws.

AFM and it’s locals 66, 542, 148-462 and 285-403


III. CLARIFYING THE UNCLEAR – WHICH IS DOESN’T


———————————————————

FROM THE AFM

Dear Members:

In further clarification to our notice dated May 2, 2019, referenced above, please be advised that our International Unfair List remains fully intact and absolutely enforceable against employers and their allied contractors and subcontractors whose unfair actions result in the existence of a primary labor dispute with the Federation and/or its Locals.

You received the above-referenced notice in connection with our placement of a national contractor on the International Unfair List, who reacted to that by filing with the National Labor Relations Board a series of unfair labor practice charges against AFM and numerous Locals.  All of the contractor’s charges were dismissed as lacking in merit, and all subsequent appeals were denied.  The NLRB, however, did find that the wording of a portion of AFM bylaw Article 8, Section 3, was overly broad, and as such, hypothetically could extend inappropriately to neutral parties who have no stake in a primary labor dispute.  At the same time, the NLRB expressly noted that there is no evidence that AFM ever actually applied the bylaw in an unlawful manner.  Nevertheless, the NLRB required us to revise the wording of the bylaw as a precaution.

 Unfortunately, the confusing text of the email blast that was sent to members was determined by the NLRB.  I apologize for any confusion it has caused.

Thank you,

————


American Federation of Musicians
of the United States and Canada
1501 Broadway, 9th Floor
New York, NY 10036

—————————————————–

IV. A QUESTION


There have been several interpretations of the above by different musicians and members.

Some have interpreted the initial NLRB statement to say the union cannot go after musicians for any work they might do.

Others have interpreted the above to say that as long as the employer is NOT on the international unfair list it’s fine to work for them, union of not.

What is your interpretation, dear reader?

If the material presented above means the union cannot come after players for non-union sessions, this allows the perceived top tier (and everyone else) to dodge the present bylaws.

How?

Some weeks ago a large (non-union) recording session took place featuring a large number of the perceived A-listers, including some on the AFM Local 47 board. This session was advertised on Facebook and other social media, and as Local 47 board members took part, the local of course knew about it.

Not surprisingly, No one from the union showed up to bust it.

If the above means that the session was fine because the contractor is not on the unfair list, that means you can work for any contractor, union or not, as long as they’re not on that list.

However, if the AFM is still pursuing anyone doing nonunion work who is a union member, then why have all those recording elites who did the session not been charged?

Thoughts to ponder.

Until next time,

THE COMMITTEE

Pension / Decentralization / Comments

Friday, February 1st, 2019
  1. LATEST ON THE PENSION
  2. DECENTRALIZATION
  3. COMMENTS on 802 CLEAN SWEEP

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  1. LATEST ON THE PENSION
MPS 2019 Pension Update: Where We’re Headed and What You Can Do

January 25, 2019

The AFM-EPF is most likely a few months away from entering critical and declining status.[1]The Trustees’ own projections say this. If and when this is announced – probably in April or May of this year — the Trustees then have the ability, if they so choose, to apply to the US Treasury for permission to cut our pension benefits. 
 
It is worth remembering that of the 1400 multiemployer plans in this country, only 25 have applied to have their benefits cut: about 1.7%. The AFM-EPF may soon join that 1.7%. According to a recent study by Milliman, the funded percentage of all multiemployer plans stands at 83%. Ours is at 63% and dropping as we approach the end of the fiscal year, March 31, 2019.
 
The Butch Lewis Act has unfortunately collapsed for now. Two bills have been introduced in the House to bring it back to life. MPS will stay engaged in Washington to get the help we need. But as long as the Republicans control the Senate, the path forward in Washington remains murky.[2] 

Our main task now is to push our Trustees to do the right thing. There are still things they can do to improve the situation.

Improve Investment Returns:

The AFM-EPF’s investment performance this fiscal year is 2.2% (through 9/30/18), while the median performance in our peer group is 3.8%. The new investment manager, Cambridge Associates, hired in October 2017, has added negative value in this fiscal year. You read that right: they have added negative value.[3] According to the Trustees’ own actuary, Milliman, “the primary driver of multiemployer health continues to be asset performance.” It is exactly in this area that our Trustees continue to fail us.
 
Increase Employer Contributions:

A significant reason for the crisis at AFM-EPF is the low level of employer contributions to the pension fund. According to recent Congressional testimony before the Joint Select Committee in Congress, aggregate contributions to multiemployer pension plans for 2009 to 2014 increased by 6.9% per year. Compare that to what our trustees project as the growth rate in employer contributions over the next 20 years: 2.5%. This is soon to be raised to 3%, but that is still a far cry from what is necessary. This plan is not just a little behind in employer contributions but vastly underperforming the industry standard of 6.9%. The Trustees’ own documents show how increasing the level of employer contributions can postpone our pension cuts.
 
Control Expenses:

It is unacceptable that as the AFM-EPF heads into critical and declining status, there have still been no expense cuts. The Executive Director still makes over $425,000 per year, and there are still about 20 people on staff who earn six-figure salaries. There are two outside investment managers. There are two law firms. And there is a Washington DC polling firm on retainer. 
 
Appoint Qualified Trustees:

MPS has argued that we have an entrenched, unaccountable and unqualified Board, and if this is permitted to continue, so will the mismanagement of our pension plan. To avoid this scenario, MPS proposed replacing 5 of the 8 Union Trustees with investment, pension, and actuarial experts. We believe these simple steps that would make this board of Trustees more capable, more dynamic and more accountable.

That’s what the Trustees can and should do. Here’s what AFM musicians across the country can do.

Raise Your Voices:

The next AFM convention is coming up quickly in June. Your local presidents will be attending and their attitudes and agenda should be shaped by you, the membership. Now is the time to let your local presidents and elected officials know that they must help influence our lead Trustee Ray Hair to improve investment returns, increase employer contributions, control expenses and appoint qualified trustees as detailed above. 


Get Active:

If your local union leadership is not representing your wishes as members, it may be time for a change. Last month, the Musicians for Change party of Local 802 in New York City (led by several MPS organizers) swept the elections and thus ousting an entrenched administration that refused to address the pension crisis in a strategic way. (Read about it here in the New York Times). Musicians for Change has shown that grassroots activism works. It can work at your local too by voicing your concerns, demanding accountability, and by making leadership changes where necessary.

We are entering uncharted territory for this pension plan, for the AFM and personally for each of us. This is not the time to be passive. The Trustees are about to make decisions that will alter the lives of thousands of AFM musicians across the country. It is time to let the Trustees know that musicians are organized and speaking with one voice. We are demanding accountable leadership and a cohesive strategy to address the issues facing the pension fund. Since this crisis began in December of 2016, we have yet to see either of those things.

[1]“Projections show critical and a declining status for April 1, 2019 (does not reflect market downturn through October).” November 8, 2018 Actuarial Valuation, page 17.

[2]We continue to be amazed that anyone calls Butch Lewis a bailout. Of course, Butch Lewis is not a bailout. It’s a loan guarantee program. There are currently over 100 federal loan and loan guarantee programs, assisting small businesses, homebuyers, veterans, students, farmers, disaster recovery, export-import transactions, and infrastructure projects. There is currently $4.34 trillion of federal loans outstanding under these programs. No one calls these federal loan programs bailouts. No one should call Butch Lewis a bailout either. But those arguments are on hold for now.

[3]September 30, 2018 Investment Report to AFM-EPF, Cambridge Associates.

MPS 2019 Pension Update: Where We're Headed and What You Can DoClick for the full…

Posted by Musicians for Pension Security on Friday, January 25, 2019

==============================

  1. ANOTHER INDUSTRY DEVELOPMENT: DECENTRALIZATION CONTINUES

Even BYUtv is looking at filming elsewhere, as Utah’s $8M budget for film incentives can’t keep up with demand

By Scott D. Pierce

Disney wants to produce more TV series and movies in Utah — but it’s looking elsewhere. Oscar nominee Taylor Sheridan would like to film his upcoming movie in Utah — but production will take place in New Mexico. BYUtv is exploring options for producing TV series in Georgia or Canada.

Why? Because Utah’s tax incentive program for film and television is limited to $8.29 million a year. And compared with the demand — and the additional millions some other states provide — that’s not much to offer an industry that considers incentives a key part of the bottom line.

Mary Ann Hughes, Disney’s vice president of film and television production planning, told a recent meeting of the Governor’s Office of Economic Development, “You will not find the productions going anywhere without incentives. It’s become an integral part of our planning.”

Disney is budgeted to get Utah incentives estimated at $3.7 million for its new series “High School Musical: The Musical.” But if a pilot that Disney shot in Utah last year, “The A Girl,” gets picked up as a series, the company says it will film elsewhere, because the likelihood of Utah having several million dollars more in incentive money available is slim, due to the limited budget and other projects (including Disney’s).

“Tax credits are a big driver of our decision-making,” said Susette Hsiung, executive vice president of Disney Channels Worldwide.

BYUtv filmed Season 1 of its upcoming show “Dwight in Shining Armor” in West Valley City, but it’s reportedly considering moving to Georgia or Canada. BYUtv managing director Michael Dunn didn’t want to comment directly on “Dwight” and said Utah “remains at the top of our list of production options.”

But he added that BYUtv “must consider other locations outside of Utah, particularly because of the lucrative tax incentives offered. These additional incentives dramatically offset our limited budgets,” he said, and they “are critical for the long-term viability of a series.”

Utah “has attracted more business than the incentive will support at this point. So BYUtv starts looking at going to Canada,” said Matias Alvarez, one of the producers of “Dwight.” “It’s just crazy.”

The Motion Picture Association of Utah — where Alvarez is a board member — will lobby the upcoming Utah Legislature and Gov. Gary Herbert to provide more money for incentives. Sheridan and actor/director/producer Amy Redford said they’d do whatever they can to help make that happen.

“Anything I could do that could possibly help the Legislature understand this, I’m eager to do,” Sheridan said.

Getting it made in Utah

Utah’s incentive program is “conservative,” according to Virginia Pearce, director of the Utah Film Commission. It rebates up to 25 percent of the cost of goods and services that are bought in the state, and of the salaries of Utahns on the crew.

Producers submit an estimate of how much they plan to spend in the state and — if approved — incentive money is budgeted by the Utah Film Commission. If the project doesn’t go into production, it doesn’t get anything. If it spends less than expected, it gets less — and that’s determined by a postproduction audit.

The film commission has to budget carefully because “we have run out the last couple of years,” Pearce said. “We’re kind of a victim of our own success.”

Disney’s Hughes pointed out that, in 2018, Season 3 of “Andi Mack” received a $4.8 million rebate, and “The A Girl” pilot got $400,000. Those payments, combined with its estimated 2019 rebate for “High School Musical: The Musical,” are $610,000 more than the annual budget of Utah’s incentives (albeit spread over two years).

“And this is just the Disney Channel,” Hughes said. “It causes us to have some tough conversations” about taking productions elsewhere.

One common pushback on increasing incentives is “why would we give Hollywood people money?” Alvarez said. He finds that frustrating.

Utah’s incentives support the hiring of Utahns, Alvarez points out — not “Tom Cruise coming here and taking millions of dollars out of the state.”

Studios have to pay stars big bucks regardless of where films are produced, Redford said.

“The six people that make a lot of money on a film are going to make that money no matter where you go,” she said. “Their deals are not contingent on the incentives.”

The employment contracts of the crew, however, are.

The incentives are “not giving money to millionaires,” said Sheridan, the creator/writer/producer/director of the made-in-Utah TV series “Yellowstone.” “It’s giving money to construction workers and drivers and catering companies and electricians.”

Sheridan employs up to 110 construction workers, 45 electricians and 40 drivers at a time on “Yellowstone,” which has been approved for more than $7 million in incentives in each of its first two seasons. Both that show and “Andi Mack” are receiving deferred payments, which allow the film commission to pay out incentives of more than $2 million over three years. But that still comes out of the $8.29 million budgeted annually.

And that’s one of the reasons Sheridan said he can’t afford to make his upcoming film (which he’s keeping under wraps) here — incentives just aren’t available for a movie with a budget “in the $50 million range. That’s a lot of money to spend in a state,” he said.

Even if only half that budget was spent in Utah, a 25 percent rebate would amount to $6.25 million — 75 percent of Utah’s annual incentives.

‘It really is about the economy of Utah’

In Utah, innumerable businesses — from the arena that’s home to the Utah Jazz to the Walmart down the street — receive some kind of tax break. Offering the same benefit to film and television productions is an investment, Redford said.

“It’s not just about Hollywood saving money,” she said. “It’s really about supporting and nourishing an industry that could really give Hollywood a run for its money. It really is about the economy of Utah.”

According to Pearce, a recent study indicated that for every dollar spent on film incentives, $7 is added to Utah’s GDP, or gross domestic product, the value of goods and services produced within the state.

The increase is generated not just by what each production spends in the state — with at least 75 percent of its budget not rebated — but by “the crew member who gets paid, who takes his wife out to dinner, who buys a new car, who is able to live and work here instead of living and working in L.A.,” Pearce said.

“Yellowstone” “employs hundreds of people, and the vast majority of them are local,” Sheridan said. “And the ones who are coming in, they’re renting properties, they’re standing in line at the grocery store. They’re staying here. They’re moving in.

“It’s just a money dump,” he said with a laugh. “We show up and spend an extreme amount of money, employ a workforce and then leave. And showcase the state.”

Movies and TV shows filmed in Utah are sort of accidental advertisements. Tourists are still visiting East High more than a decade after the third and final “High School Musical” movie was released.

“We’ve done some studies, and 30 percent of tourists that come to the state said that some kind of television show or movie influenced their decision,” Pearce said.

Redford plans to shoot the film “Cowboys and Indians” — which she called “sort of a cultural collision between Hindus from Queens and ranchers from the southern part of Utah” — in the state this spring.

It will be, she said, “a love letter to all that Utah has to offer — a big advertisement to come and spend your vacations in southern Utah and enjoy all of the riches.”

But she added: “If I can’t say to the investors, ‘OK, I get to save that 30 percent on your money with the incentives,’ then they’ll say, ‘Then we’re going to go to New Mexico.’ And I can’t … totally argue with that.”

She said she’s “sweating a bit” because she fears “if a couple of Disney films come in, then that knocks all of the independent filmmakers out. It’s like, don’t tell anybody how wonderful Utah is to shoot because they’re going to suck up all the [incentive]

A look at the competition

There’s a reason that all the Marvel superhero movies, all the “Hunger Games” movies and a slew of TV series — including “The Walking Dead,” “MacGyver,” “Dynasty,” “Stranger Things” and, yes, “Atlanta” — film in Georgia.

There’s no cap on Georgia’s incentives, which provide up to a 30 percent rebate and apply to the salaries of both Georgians and non-Georgians. In the 2017-18 fiscal year, that state paid $800 million in incentives to 455 productions, which spent $2.7 billion in the state. The governor’s office estimated a total economic impact of $9.5 billion.

“Georgia’s rebate — it’s completely changed the movie business,” Sheridan.

Georgia easily outspent New York ($420 million) and California ($320 million) and New Mexico ($50 million). At the other end of the spectrum, Michigan eliminated its incentives in 2015, and production there has virtually ceased.

But Utah’s conservative approach looks good compared with what’s happened in New Mexico.

That state grants incentives of up to 30 percent, and there’s no cap on the amount productions can qualify for — but there is a $50 million cap on what the state can pay out each year. So New Mexico owed film and TV producers $180 million at the end of 2018, a figure that’s expected to more than triple in five years. (It may take Sheridan years to get the rebates on his upcoming film.)

Netflix has purchased a production studio in Albuquerque that is expected to bring 1,000 jobs — with help from $14.5 million in tax incentives from the city and the state.

Utah also competes with the U.K., Australia and New Zealand. Between the provinces and its federal government, Canada alone distributed more than half a billion dollars in incentives last year, a figure Pearce doesn’t ever see Utah approaching.

“I don’t think it makes sense for a state our size and the diverse economy that we’ve built up,” she said.

‘Make a real impact’

Still, expanding the film and TV business would only be good for Utah, said Sheridan, a Wyoming native who moved here ”to make a living in movies and not live in California.”

“Aside from clogging up some traffic in spots, I don’t know the negatives. And I think the positives greatly outweigh that,” Sheridan said. “All we do is run around and just leave a trail of money behind us.

Productions don’t leave “any residual trash or any toxic waste to clean up or anything,” Alvarez agreed. Another benefit to expanding incentives and the industry in Utah, he added, is keeping talented young Utahns home.

He’s carved out a 30-year career as a director/producer working mainly in Utah. But he’s the exception.

“I see tons of kids graduating from [Brigham Young University] and [Utah Valley University] and the [University of Utah] in media production who don’t have anywhere to go in Utah,” he said. “The best ones end up leaving and going to L.A. or Georgia. A lot of those kids have family here, they grew up here and they want to stay in Utah, but there are just no jobs here in that industry — or at least not enough jobs.”

Redford, the daughter of Robert Redford, moved back to Utah to establish a production company. She said there’s a huge amount of talent here, “and the kids that go to film school should be able to then put all of that talent back into the state. But a lot of them are getting to a point where they say, ‘You know what? There’s just not enough work. I’ve got to go.’”

Pearce said she’s proud of what the Utah Film Commission has been able to accomplish. Still, she told a meeting of GOED, “Our biggest concern right now is just the cap size.”

Sheridan would like to see rebates upped to 30 percent and the cap removed. And he’d like to see incentives applied to above-the-line costs (cast, stunt performers, producers) as well as below-the-line (goods and crew members).

“It would entice even more productions,” he said. “That’s what Georgia has done, and it’s how they’ve been so successful.”

Redford suggests greater incentives for shooting in “economically challenged areas” and a bump for using local music talent “so you can turn these really talented young musicians into composers and writers.” She also like the idea of an expat program, which would allow people born and raised in Utah to qualify for incentives even if they left the state to find work elsewhere.

Alvarez, too, wants Utah to make a bigger commitment.

“It’s like you’re dabbling in it and you have this small incentive, but it’s not enough to make a real impact,” he said. “I feel like it’s a half-measure that we’re stuck with right now.”

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COMMENTS ON LOCAL 802 CLEAN SWEEP

-A good start. I thought Tino was going to come after me when I asked whether we need some people on the Pension board who knew something about investments at the TMA meeting a few months ago. Of course the Broadway musicians have a huge interest in the plan, as they are putting a huge percentage of their checks into the plan (I think it is 18%).

Getting Tino’s predecessor and Vince Trombetta off the board wouldn’t hurt either.

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-A typical response by someone without knowledge of how the AFM-EPF and its board of trustees works. The board does not directly act in investing, hiring the same well-known actuaries and investment firms as do other funds. B’way musicians do not contribute out of their checks .Mgt. does the contributing based on an arbritator’s (Turkus) award from the ’60s giving musicians a percentage of ticket sales which has grown over the years as ticket prices have increased. Union-side trustees are appointed by the AFM president so no change there unless he wants it.

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-A series of mistakes by actuaries responding to the Fed’s “overfunding” rules leading to upping the multiplier to 4.65 to current and RETROACIVE accounts plus the ’08 financial meltdown led to the AFM-EPF’s current troubles. Nobody took the money. 802’s president is but one of 16 trustees, unable to cure the fund’s problems as the new know-nothing presiddent will find out. He will not even be appointed to the board.

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Getting a larger membership won’t fund what’s already underfunded.
That money should already be there by the pension contributions so far.
Where did the money go? Did someone take it or was it invested poorly?

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Hello Friends
Where has the blog gone? I sure hope it has not gone away!
Thank you for it!

EC: STILL HERE, JUST LESS FREQUENT!

Till Next Time….

The COMMITTEE

https://www.sltrib.com/artsliving/2019/01/13/disney-others-want-film/