THE AFM & SAG-AFTRA FUND

by Dennis Dreith

Knowledge is power. And knowledge can also put money in your pocket! In late fall, I met with a number of prominent studio musicians and Local 802 members to give a detailed report about the AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund. I was joined by President Tino Gagliardi and members of the Local 802 Executive Board.

The AFM & SAG-AFTRA Fund was initially established as a joint project of the AFM and AFTRA (prior to its merger with SAG) for the purpose of distributing royalties stemming from various statutory provisions in U.S. copyright law as well as agreements with foreign collectives.

In the U.S., the Audio Home Recording Act, the Digital Performance Royalty Act and the Digital Millennium Copyright Act all established for the first time a royalty for both “featured” artists (i.e. royalty artists) and “non-featured” performers (i.e. backup or studio artists) in sound recordings. While these royalties are applicable to digital media only and exempt AM/FM radio, they represent a dramatic first step forward in providing U.S. performers with royalties similar to what performers in virtually every other civilized country in the world have been earning for decades. Prior to the passage of these provisions, only the songwriter and the publisher received performance royalties in the U.S.

Moreover, the existence of these laws in the U.S. makes it possible for the fund to enter into reciprocal agreements with foreign collectives to collect royalties in their territories for performers on U.S. sound recordings. Clearly, the absence of a performance right in the U.S. for AM/FM radio still inhibits us from collecting significant foreign and domestic royalties and has delayed implementation of digital radio here in the U.S. However, these laws are still providing substantial royalty payments to U.S. performers. It should be noted that the laws that made collection of these royalties possible were passed in large part due to the vigorous lobbying activities of the AFM and SAG-AFTRA, in cooperation with the record labels and related trade organizations.

Then and Now

The fund certainly had a very humble beginning. However, it has experienced massive growth in size and scope since first being activated in the final months of 1999. When I first took the reins, the fund had less than $250,000 to distribute, no office and no employees. I immediately hired one employee who occupied a corner of the Film Musicians Secondary Markets Fund, using what amounted to hand-me-down equipment and borrowed office space. That one person was the entire Research Department, the Allocations Department, the Participant Services Department, and the Whatever Else That Was Needed At The Time Department.

Today, the fund has 44 employees with an independent Research Department, as well as Accounting, IT, Software Development, Participant Services, and Administrative and Legal Departments The fund has recently purchased its own building, and last year collected in excess of $42 million on behalf of session musicians and background vocalists. The largest share of royalties received by the fund are generated from the Digital Performance Royalty Act and the Digital Millennium Copyright Act, with a smaller amount from the Audio Home Recording Act. Royalties, which are transferred to us through SoundExchange, come from digital subscription services, webcasting and other digital services.

The fund also has, to date, 28 reciprocal agreements with collectives in numerous foreign territories (with several other negotiations in progress). These include active agreements in the U.K., Japan, the Netherlands, Portugal, Germany, Spain, Hungary, Poland, Romania, the Czech Republic and many others. The majority of these agreements are for so-called “private copy” remuneration, and digital broadcasts. (“Private copy” money refers to a tax on blank CDs , personal audio devices and the like.)

However, payment by Spanish television to musicians holds tremendous promise. Distributions from Spanish television amounted to just under $7 million in the past two years. We have just concluded negotiations for a similar audiovisual agreement in Germany. As with the audiovisual agreement in Spain, this covers performances of the underscore as well as sound recordings licensed for use into motion pictures and TV films, and makes distributions to both featured and non-featured performers.

Union vs. Nonunion

An area that seems to have generated a bit of confusion is the question of whether or not union membership is required in order for the fund to collect royalties on behalf of a performer. The answer is actually yes and no!

For royalties collected pursuant to U.S. copyright laws (i.e. domestic royalties from private copy, digital subscription services, webcasting, etc.), the fund is required under federal statute to distribute to union and nonunion members alike. The situation for foreign royalties is quite a different matter, and the laws of most foreign territories mandate that royalties can only be collected on behalf of union members. I can’t overemphasize the importance of this fact. Simply put, we cannot make a claim to collect foreign royalties for anyone who is not a member of the AFM or SAG-AFTRA.

I have also been asked if a performer can join a foreign collective (such as the equivalents of ASCAP and BMI in other countries) to have them collect their foreign royalties, and still collect domestic royalties from the fund. This is a complicated matter, and while it may in fact be beneficial for some individuals (especially those with dual citizenship), it may in many other situations delay your foreign royalty payments due to mandate conflicts, or in other cases preclude you from receiving certain royalties altogether such as audiovisual royalties. As this is a complicated issue, I strongly suggest you contact the fund to discuss your individual circumstance prior to making such a determination. Contact us at www.AfmSagAftraFund.org or (818) 255-7980, ext. 2.

Is there money waiting for you at the AFM & SAG-AFTRA Fund?

The AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund has recently updated its web site and included many new features, such as a private area access where you will be able to view and print current and past statements, and manage other personal information (including direct deposit information, beneficiary designations and more). I strongly urge those of you who have not already done so to go to our web site at www.AfmSagAftraFund.org and register for the private area access and sign up for direct deposit. The direct deposit option will ensure that you receive your royalty payments in a timely and secure manner, and minimize the possibility of lost checks. You can also contact the fund by calling our hotline, at (818) 255-7980, ext. 2.

Dennis Dreith is executive director of the AFM & SAG-AFTRA Intellectual Property Rights Distribution Fund.

FILM MUSICIANS SECONDARY MARKETS FUND

by Kim Roberts Hedgpeth

The Film Musicians Secondary Markets Fund works to serve the film, television and music communities and to meet the needs of film musicians whose talents fuel the industry. To this end, the FMSMF is pleased to provide ongoing updates to Allegro for the benefit of Local 802 members.

“New” Films

The FMSMF received residuals for 137 “new” titles during the first seven months of our fiscal year (April 1 to Oct. 31, 2014). Most of the newly-reported titles were films and TV programs that were first released in their primary market during 2012, 2013 or 2014, although a number of titles were older films and TV shows that generated secondary market receipts and paid in residuals for the first time.

Forty-four of the “new” titles were theatrical films – from big budget features such as “Frozen,” “Captain Phillips” and “The Secret Life of Walter Mitty” to smaller films such as “Nebraska,” “The Best Man Holiday” and “At Middleton,” which generated both critical recognition and sales in secondary markets.

For television, there were 90 “new” titles reporting for the first time during the first seven months of the year, including the 2013-2014 seasons of “Walking Dead,” “American Horror Story (Coven),” “Nashville,” “Sleepy Hollow” and “Smash.” In most cases, a complete season of individual episodes of a series is reported as one title, although there were 11 individual episodes of two PBS series reported as individual titles within this group.

New media is now emerging, with the first two seasons of Netflix’s “House of Cards” reporting musicians’ residuals for the first time. Of course, there will be additional “new” titles remitting residuals earned by musicians in secondary markets during the rest of the fiscal year, which ends on March 31, 2015.

Residuals paid to the FMSMF between April 1, 2014 and March 31, 2015 will be paid out in the July 1, 2015 distribution. A list of “new” titles for fiscal year 2014-2015 can be found at the FMSMF web site, www.fmsmf.org/filmtitles/newfilms.html, which our staff updates on an ongoing basis throughout the year. Please view the list of 2014-2015 “new” titles, as well as the list of all titles reporting in so far during this fiscal year.

Unclaimed Residuals

Thank you for helping to get the word out! During the first seven months of the FMSMF’s fiscal year which began April 1, we distributed just over $900,000 of unclaimed secondary market residuals to musicians and beneficiaries who had not been previously found. This year, we’ve added to our existing efforts to research and find musicians and beneficiaries who may have unclaimed residuals, by focusing our message in trade magazine ads, communications with AFM locals and outreach in different venues on encouraging musicians to check our unclaimed list. We’re making progress, but still need your help. Please check the FMSMF unclaimed residuals list at www.fmsmf.org/unclaimedchecks to see if you or other AFM members you may know have unclaimed residuals waiting for them. In particular, as a reminder about AFM-covered sound recordings: if a covered sound recording is used in an AFM-covered theatrical or TV motion picture, the musicians who worked on that recording may be entitled to secondary market residuals. So if you work on a session for a sound recording, make sure your complete information is on the B-4 form and the B-4 is filed with the union…because one day that recording may generate FMSMF secondary market residuals for you.

From all the staff at the Film Musicians Secondary Markets Fund, best wishes for a happy, healthy and prosperous New Year!

Is there money waiting for you at the Secondary Markets Fund?

Please check the unclaimed residuals list at www.fmsmf.org/unclaimedchecks to see if you or a fellow AFM member you know has unclaimed residuals waiting for them. You can also call the fund at (888) 443-6763.

Kim Roberts Hedgpeth is the administrator of the Film Musicians Secondary Markets Fund.

For a complete list of unclaimed checks from a variety of sources, see www.local802afm.org/member-resources/unclaimed-checks