Over the past several months, in this column and in The Musician’s Voice, a relatively low volume discussion has been taking place regarding the pay structure contained in the AFM Television Film Labor Agreement. The subject, specifically, was the Motion Picture Special Payments Fund and the question asked, implicitly, was whether this provision is placing unionized U.S. product at a competitive disadvantage globally.

Some have suggested that this subject should not be raised at all in a public forum. They are concerned that employers will be made aware of a debate within the union’s ranks and will be able to use this debate to their advantage. It cannot be overstated how strongly I disagree with that position – or how deeply I believe that not discussing such a topic weakens, rather than strengthens, us.

Employers are already aware of this growing dichotomy within the union and have been pressing us for “buy-outs” for a number of years. Major film and television companies, symphony orchestras and the big five (four? three? one?) phono corporations, as well as a wide variety of independents in all fields, bring the subject up on a regular basis. These employers know they can go elsewhere to get the deal they want. This, obviously, sometimes includes elsewhere in the AFM under legitimately recognized arrangements (See the letter from Vice-President from Canada Dave Jandrisch in the March Allegro.). They are, right now, finding ways of exploiting our differing approaches, particularly for relatively lower-budget TV and films.

The question we are faced with in this instance, though, is relatively narrow and has to do with how we respond to the phenomenon of runaway production. Can we slow down runaway production by altering our pay structure?

THE MONITOR STUDY

I recently became aware of a study – jointly commissioned by the Directors Guild of America and the Screen Actor’s Guild, and conducted by Monitor Company – on “runaway” film and television production from the U.S. It puts our dilemma into clearer perspective and definitively, I think, answers the Special Payments question.

In conducting the study, focus was placed on “economic” runaway productions – those that leave to obtain lower costs – as contrasted with “creative” runaways – those that leave because of some creative consideration, such as a unique geographical setting.

In measuring the increased impact of runaway production, the study finds a 185 percent increase in the number of such productions from 1990 to 1998 (there were 100 in 1990, compared to 285 in 1998) and a 500 percent increase in economic loss, a category which includes estimated lost ancillary revenues and tax revenues ($2 billion was lost in 1990, growing to $10.3 billion in 1998).

Canada is the greatest beneficiary of this phenomenon, receiving 81 percent of all economic runaways. TV films show the most proclivity to gravitate northward: in 1998, 91 percent of the 139 TV movie productions went there. It should be noted that, up until 1998, U.S. domestic production was growing – although at a relatively slow pace – and this may have clouded our perception of the situation somewhat. That is, production in both L.A. and New York increased at the same time as runaways were increasing. Since 1998, however, this domestic growth may have slowed while anecdotal evidence (especially from Los Angeles) indicates that runaways have increased alarmingly.

Why? Money. The combination of a decline in Canadian currency relative to the U.S. dollar and the slower rate of increase in Canadian labor costs since 1990 has resulted in potential total production savings of 25 percent or more. Canadian federal and provincial tax rebates are also available, and have been promoted at trade shows in the U.S. and elsewhere.

On top of this, Canada has initiated an aggressive public relations and industry development campaign to assure that companies choosing to bring work to that country will feel satisfied with the skill levels of workers and with the general production atmosphere.

In an ominous note, the study found that “Australia is moving along a very similar path to that pursued by Canada.”

JOBS LOST

The study estimates that, in 1998 alone, 23,500 full-time equivalent jobs were lost to U.S. workers due to runaway production, with a total of more than 125,000 lost in the last ten years.

Musicians’ jobs, it should be noted, are not part of this total, so far as I was able to determine, nor were these of any other post-production workers. In fact, we are noticeably absent from this study in any regard. There are two mentions of other workers, including camera, sound, production design, wardrobe, make-up, set construction and drivers. No musicians. The conclusion might be that we are not on anyone’s economic radar screen, for whatever reason.

What does it mean? The answer is determined, I believe, by the relative proportion of the AFM’s piece of the action to the totality of the situation. Runaway productions are a multi-billion-dollar phenomenon, and our part of it is minor – possibly so minor as to play no role in economic decisions about a production. Under this scenario nothing we could do will have any measurable impact whatsoever on this industry, and especially nothing so inconsequential as modifying the special payments provision. It isn’t a large enough factor to make any difference in retaining post-production work in the United States or in any way slowing the runaway factor.

Other unions’ experience in chasing “off-shore” work by lowering their wages or standards has demonstrated that all it leads to is a race to the bottom. Labor has never been sold so cheaply that someone else, somewhere, couldn’t undercut that price.

My conclusion, then, from reading the Monitor report is that changing the AFM’s pay structure or, for that matter, any of its “union rules” will have little or no effect on an employer’s decision regarding where to record. It is just too small a piece of the project. In this, as in other areas, all of the entertainment unions together need to begin discussion of coordinated strategies to determine how best to fight our mutual fights. None of us alone can create the necessary leverage.

However, before we talk to the others, we need to solidify our own position. To do that, all of us must be engaged in the process – the AFM-U.S., the AFM-Canada, the major locals and the RMA-NY, L.A. and International. A Federation-wide discussion on this topic and others could lead to a far stronger position at the bargaining table. Avoiding a discussion of these issues will lead us nowhere.