AFM Completes Negotiations for New Film Recording Agreements

Volume CII, No. 4April, 2002

Negotiations for the AFM’s third set of national recording agreements – the Theatrical Motion Picture Agreement and Television Film Agreement – took place in Los Angeles Feb. 6-15. A memorandum of understanding was being finalized by legal counsel for the parties as this issue went to press. Once it is signed off on, the contract will go to recording musicians for ratification.

Like the two earlier negotiations for national recording contracts, the jingle and phono agreements, these talks took place during a downturn in the economy that has sharply affected the industry. Additionally, a more long-term process, globalization, has affected every aspect of work in the motion picture industry. Runaway production now affects not only filming but the back-end production of motion pictures: recording, editing and mixing are being done in studios all over the world and, as a result, scoring within the United States has declined considerably since the last agreement was reached.

The AFM caucus included representatives from all of the major recording centers – Los Angeles Local 47, Nashville Local 257, New York Local 802, Toronto Local 149, Montreal Local 406 and the Canadian Federation, representing Vancouver musicians. Each of these areas has developed its own strategies to address the problems posed by globalization. Reconciling those approaches led to a great deal of discussion and ultimately to compromises on the final shape of the agreements.

The major changes in the new three-year contracts involve wages and the ceilings for low-budget productions. Pension and health contributions and special payments formulas are unchanged from the previous agreement.

For theatrical films, wages are unchanged in the first year and will rise 2½ percent in the second year and 3½ in year three. For low budget films, wages will increase 3 percent in each of the three years, except for music preparation. Music prep musicians who took part in the AFM caucus felt that these rates were considerably closer to full scale than were payments to instrumental musicians, and that increasing scales would widen the gap.

The ceiling for a low-budget theatrical film production was increased from the $15 million ceiling of the previous agreement to $24 million in the first year, $27 million in the second and $29.5 in the third. This shift was made after study of the budgets of films currently being produced in non-AFM centers in the United States (chiefly Seattle). Most budgets ranged from $15 million to $35 million, making it impossible to compete for this work under existing low budget guidelines.

Wage scales for television films will increase on the same schedule as theatrical films: 0, 2½ and 3½ percent. For low budget television films, the increases will be 3 percent per year, including music prep. The low budget ceiling will increase from the current level of $2,035,000 to $2.5 million in the first year, and then by 3 percent in each of the second and third years.

For low budget films made for the home video market there will be a 3 percent annual increase, including music prep. The low budget ceiling will increase from the current level of $6,365,000 by 3 percent in each of the three years.

The new agreements include one significant change involving the treatment of special payments. Beginning with the July 2003 distribution, they will be considered pensionable scale wages. (Under a 1964 ruling, the IRS has always considered SPF distributions as wages, not royalties.) This will result in pension contributions being made on the special payments, but will also subject them to work dues assessments. This change was hotly debated in the AFM caucus, which is proposing that every local amend its bylaws to provide that the AFM minimum work dues for electronic media, 1½ percent, be applicable to these new SPF distributions, rather than the much higher work dues for all other electronic media wages. (Local 802’s recording work dues for all other electronic media is 3½ percent.)

Three issues were referred to a joint industry-union committee: dealing with runaway production; the question of how changing methods of music preparation related to direct work with the score’s composer should be compensated; and how previously recorded music is used and compensated for in episodic television shows.

All musicians who worked under either of the two agreements who had scale wages of $2,500 or more in the period Feb. 16, 1999, through Feb. 15, 2001, will be eligible to ratify the new agreements.

The Federation’s negotiating team was led by President Tom Lee and included chief negotiator and general counsel George Cohen, AFM Secretary-Treasurer Florence Nelson, AFM Vice-President for the United States Harold Bradley, AFM Vice-President for Canada David Jandrisch, attorneys Anne Mayerson and Jeff Freund, and rank-and-file representative Phil Ayling.

802 participants in the advisory AFM caucus were President Bill Moriarity, Recording Vice-President and Supervisor of National Contracts Erwin Price, Financial Vice-President and Supervisor of Music Preparation Tina Hafemeister, and Assistant Supervisor of the National Contracts and Recording Department Jay Schaffner.

The last national recording agreement to be negotiated this year is the Television Videotape Agreement, which expires May 31. Bargaining is set for the first week in May.