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.
MUSICIANS’ UNION TO TREASURY: LET US REDUCE BENEFITS IN 2021.
UNION FAILS TO WIN STREAMING RESIDUALS
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.
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.
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?!!
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.
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.
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.
“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.
===============================
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
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.”
===========================================
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!
[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:
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”;
“the worker performs work that is outside the usual course of the hiring company’s business”; and
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.
=========================================
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.
=============================================
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]
==============================================
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.
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).
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.
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.
…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.
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.
…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.
…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.
*** 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
ANOTHER ADMINISTRATION DISMISSED – LOCAL 77
BUYOUT STREAMING CONTRACTS? NOPE.
MORE DEFLECTION FROM THE AFM
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
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):
You pay 85 % of the dues full AFM members pay.
Paying for union negotiations is already part of the fi-core fee.
The only part of dues a fi-core musician doesn’t pay is money
that goes to political campaigns or candidates.
You are not included in the directory.
You cannot attend meetings.
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:
All synth (Terrible, but sometimes the only option.)
A couple of live players over synth. (Far better but not what composers want.)
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.
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.
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.
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?
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
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?
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.
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.”
===============================================
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.
———————————-
-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.
——————————————-
-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.
——————————————-
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?
——————————————–
Hello Friends
Where has the blog gone? I sure hope it has not gone away!
Thank you for it!
The leadership team of the New York local of the musicians’ union — the union’s largest local in the nation — was voted out of office on Tuesday in a stunning upset, amid concerns over the underfunded musicians’ pension plan and broader changes facing music, the original gig economy.
It was the first contested election in nine years at Local 802 of the American Federation of Musicians, and it could cause national ripples. Adam Krauthamer was elected president with 67 percent of the vote, beating Tino Gagliardi, who has held the post for nine years and played a key behind-the-scenes role in the city’s musical life.
The insurgency began with musicians concerned about their pensions. The American Federation of Musicians and Employers’ Pension Fund, a multiemployer plan representing thousands of musicians around the country, has grown so underfunded that it may decide to reduce benefits in the future. The crisis has led to renewed activism by musicians.
Some have sued the plan’s trustees, claiming mismanagement, which the trustees have denied. Others, including Mr. Krauthamer, formed a group called Musicians for Pension Security.
“It made people stand up and take a look around and see what was going on,” Mr. Krauthamer, 37, said in an interview on Wednesday.
He said that many musicians were troubled by what they found — feeling that the trustees of the pension fund had been unresponsive to their concerns — and worried that the large New York local was losing members and growing out of touch with the needs of a new generation of musicians. Several of New York’s cutting-edge ensembles, including the International Contemporary Ensemble, have opted not to unionize in recent years.
“If we don’t find a way to bring new members into our union, and more work under contract, we are never going to be able to fund our pension,” he said before playing the French horn in a matinee of “Frozen” on Broadway.
Mr. Krauthamer’s ticket, 802 Musicians for Change, said in its platform that while protecting and improving existing contracts for Broadway shows and at the Metropolitan Opera, the New York Philharmonic, New York City Ballet and elsewhere was important, the union needed to bring more musicians into the fold. It called for coming up with more flexible contract frameworks that could be “available to musicians that don’t typically fall into the traditional union mold.”
It was a hard-fought campaign. In a debate, Mr. Gagliardi emphasized his experience. “This is not class president, folks,” he said.
Mr. Krauthamer argued the union had grown out of touch. “The rest of us, as musicians, have adapted to our market,” he said. “We understand what’s going on. But our union is stuck in the past.”
A version of this article appears in print on Dec. 6, 2018, on Page C3 of the New York edition with the headline: Musicians’ Union Elects Change.