Merry Christmas from Michael Jackson

"Michael" is the first full album in a seven-year deal between the Jackson estate and Sony Music, reportedly worth $250 million.

AFM negotiated with Sony Music for MPTF contributions once the albums were produced and sold. The first album is now for sale. Sales volume will determine the size of payments to the MPTF. These sums may allow the MPTF to keep the doors open until the trustee and this administration get their act together concerning finances.

Let's hope that the MPTF does not fold before the first check arrives.

The Pareto Principle, or How 20 Percent Control 80 Percent

The Pareto principle, also known as the 80/20 rule, is a management rule of thumb stating that often, the few (20 percent) control the many (80 percent). For example, perhaps 20 percent of the people own 80 percent of the wealth, or 20 percent of the pea pods contain 80 percent of the peas.

President Ray Hair, judging by his October 2010 letter in the International Musician, seems to have taken a cue from the Pareto principle. The letter gives a voice to the heads of the five player conferences to explain their organizations, apparently ushering in a new era of influence for them.

Along with the appointment of new staff, new trustees for the pension fund, and removal of old barriers to meaningful dialogue between player conferences and AFM, the letter from the player conference heads represents President Hair's full-scale adoption of the twenty-one year old Roehl Report.

In 1989, the Roehl Report called for a change in the focus of AFM, discussing "the concept of restructuring the player conferences in order for AFM to be even more effective in representing the membership in general and symphony and recording musicians in particular."

The Roehl Report never mentions AFM's membership count in 1989, or how many members were affiliated with player conferences. Today, of about 75,000 members, only 15,000 — or 20 percent — are affiliated with player conferences. 60,000 AFM members — 80 percent — have no affiliation with player conferences.

In the last AFM administration, player conferences were ignored, with RMA in particular virtually boycotted. The new administration must make certain that in remedying this, it doesn't ignore the other 80 percent of members.

As an example of the potential for conflict between the 80 percent and the 20 percent, look to the case of Parmeter et. al. v. AFM, in which three recording musicians sued AFM over "work dues" assessed under promulgated agreements. The case has cost AFM an unknown amount in attorney fees, but an educated guess might be around $500,000 (see update below). As of this writing, attorney fees have not been billed to plaintiffs, and AFM has presumably paid them. Is it fair for this cost to be borne by the 80 percent?

As a result of winning the case, AFM has collected $79,130 in disputed "work dues" held in escrow by the court during the suit. The recording musician plaintiffs are on the hook for a further $10,000 in costs, mostly for deposition transcripts. These are small amounts relative to the attorney fees and the unknown, but presumably large, amount owed in "work dues" which the court declared within AFM's power to levy.

But will AFM pursue the plaintiffs for attorney fees? What about the formerly assessed "work dues"? Now that the newly elected International Executive Board has deleted those particular "work dues" from the bylaws, will the prior assessments be ignored?

These are questions which should not simply be reflexively answered in favor of the few.

Update 3/21/2011: President Ray Hair at the New England Conference reports $379,000 in attorney fees for the Rishik and Parmeter cases.

Tom Lee's Going Away Present

The International Executive Board, including outgoing officers Bradley, McGrew and Linneman, has awarded outgoing President Tom Lee with a three month consulting contract for over $30,000.

On June 24, 2010 — the last day of the Convention — the IEB, with nobody absent, adopted a motion to retain President Lee for three months at his current salary (see meeting minutes here).

Three weeks later on a conference call (minutes here), the IEB discussed President Lee's consulting agreement further, with Vice President Bradley, Vice President Skolnik, Secretary Folio, and officers Parente, McGrew, Price and Linneman present. President-elect Hair was absent due to local negotiations.

On the conference call, President Lee himself provided "general background comments and information" regarding consulting agreements previously provided to former AFM officers.

Also on the conference call, two efforts to amend the motion were made. Secretary Folio introduced an amendment requiring that the compensation period be reduced from three months to one month. Only Folio and Price voted in favor, and the amendment failed. Next, over the opposition of Folio and Price, the IEB decided that the consulting agreement would not be subject to the approval of the IEB-elect.

The IEB then directed general counsel to draft the consulting agreement. A check for over $30,000 was drawn and will be distributed to Tom Lee on a monthly basis until October 31, 2010, administered by Parente, McGrew and Linneman.

Financial chaos, broken locals, a collapsing MPF, dwindling membership, and now a $30,000 reward for its ousted leader, who was even given the opportunity to make a self-serving presentation on the going away presents given to former officers — thus the failed administration of Tom Lee and his rubber stamp IEB inflict a further, and hopefully final, insult upon the crippled AFM.

Postscript: A source at this weekend's IEB meetings in Dallas, TX has heard that Tom Lee's consulting fee will be "frozen" and not released, pending further investigation.

UPDATE (8/25/2010): Although the consulting fee was not "frozen" as reported above, the newly elected IEB took action on this issue at their recent meeting. There will be an update here when the minutes are published.

UPDATE 2 (8/27/2010): A reliable source reports that the newly elected IEB has canceled Tom Lee's consulting agreement.

Parmeter Loses Appeal

In the case of Parmeter v. AFM, in which three recording musicians disputed AFM's attempts to collect "work dues" on non-negotiated agreements, the U.S. Court of Appeals for the Ninth Circuit has ruled in favor of AFM "for substantially the same reasons stated by the district court."

The opinion of the Court of Appeals was brief, affirming the lengthy opinion of the district court. The district court's opinion relied on the proposition that AFM should be given wide latitude to interpret its own bylaws.

A Supreme Court appeal is technically possible, but unlikely due to the apparently uncontroversial ruling.

Further, with AFM politics completely changed since the election, hope is alive for a solution outside of the courts.

A Confederacy of Dunces

Convention 2010 brought a unifying change.

But in at least one peculiar committee, weak minds prevailed.

The Small Locals Committee comprises thirty-six members appointed by former President Tom Lee (committees average twelve members). This packed committee voted against President Ray Hair and Resolution 17.

My intent with this piece is not to reopen wounds of disunity within AFM.

But I must point out that the size and origins of this committee, and the uniformity with which it voted against its own interests, are excellent reasons to question its pronouncements in the future.

Clarification (8/6/2010): This piece originally implied that the Small Locals Committee received an extra $1,800. Committee members don't receive $50 extra in consideration of serving on a committee, but may receive an additional $50 per diem if their committee meets an extra day.

The point remains the same: the Small Locals Committee's size, origins and unified stance against the interests of small locals undermine its credibility.

Unity

"The end of our long union nightmare may be near."

I wrote those words in December, 2009, noting a trend of defeats for Tom Lee. The crack in Lee's armor eventually spread to a full scale defeat at Convention 2010.

Tom Lee was voted out, marking the end of the longest AFM presidency since Herman D. Kenin (1958-1970). He ended his term beleaguered and, according to a source at the convention, obsessed with what he perceived as his recording musician enemies. Tom Lee left his office graciously, like the master of AFM politics that he was.

The rubber stamp IEB was voted out. Convention 2010 delivered us three wise men: Vince Trombetta, Dave Pomeroy & Tino Gagliardi. All are independent creative thinkers, with a creative and positive agenda for AFM.

Perhaps the wisest of all is AFM's new president, Ray Hair. Common wisdom dictated that he should have announced his candidacy sooner; he announced at the beginning of June. Common wisdom dictated that nobody could match Tom Lee at canvassing and vote-counting. But Ray Hair's wisdom was more than common; it was inspired.

At the threshold of a new era, Convention 2010 could not have delivered a more exuberant leadership.

Change has come to the AFM.

Resolution 17 Q & A

What is Resolution 17?

Resolution 17 (PDF) would compensate AFM musicians displaced by musical acts from foreign countries playing in the United States and Canada. It would allocate AFM's visa processing fee income to the Music Performance Fund (MPF).

What are visa processing fees?

When a tour promoter hires a foreign musical act to play in the United States, it must arrange for each foreign musician's temporary work visa. As part of the visa application, the promoter pays AFM a visa processing fee — $200 for standard delivery, $250 for expedited delivery. In exchange, AFM provides a boilerplate "no-objection" letter to the tour promoter (examples: PDF). Although AFM hid these fees under "other income" until 2007, we now know that AFM has collected over $3.6 million since 2004.

What is the Music Performance Fund (MPF)?

As recording technology became readily available in the 1940s, thousands of venues which used to host live music began playing recordings. For example, in the days before radio stations simply played back recorded music, radio stations actually hired musicians. Tens of thousands of musicians were displaced by this effect.

The AFM, through a hard-fought strike, wrestled a settlement from the recording industry in 1948 to pay into a special, independent trust fund — the MPF — to compensate musicians for this displacement. Since then, MPF has paid musicians over a billion dollars for live, admission-free concerts across the United States and Canada, often co-sponsored by local businesses and governments.

Today, MPF funding has dried up due to years of negligence by AFM's administration. During new contract negotiations, AFM offers to exclude MPF payments without even being asked — see, for example, this AFM proposal for digital downloads (PDF): "There shall be no MPTF contribution on digital downloads."

Unless we take action, according to MPF's impartial trustee, John Hall, "it's only a matter of what month the doors would be shut."

How do musical acts from foreign countries displace AFM musicians?

Tour promoters have discovered that they can keep more profits if they hire cheap, foreign "sweatshop orchestras" instead of professional AFM musicians. Because all markets for live music are finite, a dollar spent on a foreign sweatshop orchestra is a dollar not earned by AFM musicians. This is displacement. The following examples are not anecdotes; they are recent, well-documented instances of AFM musicians losing work to unfair competition from foreign musical acts.

A recent exposé by the New York Times of the Moscow State Radio Symphony Orchestra detailed a nationwide, specific example of displacement. Tour promoters are eager to cash in on the hunger for live classical music programming in smaller cities and towns around the country. But they do so on the cheap when they can, in this case by hiring a foreign sweatshop orchestra which pays musicians $40 a concert.

If your city is on this map, a sweatshop orchestra displaced AFM musicians in a venue near you (click to enlarge).

Music Worcester, a promoter of live classical music in Worcester, MA, routinely fills its entire season with orchestras similar to the Moscow State Radio Symphony Orchestra, and has done so for several years. Prior to the availability of sweatshop orchestras, Music Worcester hired the Worcester Symphony Orchestra (comprised of AFM musicians) to perform these seasons.

Displacement is not limited to low-profile tours, promoters, towns and cities. In 2009, Star Wars In Concert was promoted as a nationwide event, with some of AFM's best musicians from New York, Philadelphia and Boston engaged for the first six weeks of the tour. However, after six weeks, the promoter switched to foreign musicians — a group billed as the Royal Philharmonic Concert Orchestra — to play the remainder of the fourteen week tour. AFM's musicians were so clearly superior that the tour's producer engaged them for the full 2010 tour. However, highly achieved AFM musicians were displaced in 2009.

This Royal Philharmonic Concert Orchestra, reassembled as forty-eight background players was then engaged for Sting's 2010 Symphonicity Tour. Sting opened with this group of foreign musicians in Portland, Oregon on June 4, 2010. This is work that AFM musicians across the country need, and would earn were it not for displacement.

Or take the foreign act Teatro Lirico d'Europa, displacing AFM opera companies all across the country. These are just a few examples of displacement; there are dozens more. Here is a partial list of foreign acts which paid AFM visa processing fees from 2006–2007 (PDF). Most acts on this list are not highly regarded orchestras which are so artistically meritorious as to make any question of displacement moot. Some on the list travel under the name of a well regarded orchestra, but employ student or other cheaper musicians on their American tours.

What is the connection between MPF and visa processing fees?

Displacement. MPF was created to offset displacement of musicians in the recording industry. Today, we can save MPF by offsetting displacement of musicians by foreign musical acts. Resolution 17 preserves the core mission of MPF by offsetting displacement of AFM musicians, and gives it a new source of funding to do it.

Is Resolution 17 legal?

Trustee John Hall commissioned a law firm to prepare a thorough report (PDF), and it concluded that Resolution 17 is legal and could be implemented.

Would implementing Resolution 17 harm AFM's finances?

If we accept that foreign sweatshop orchestras unfairly displace AFM musicians, then it doesn't make sense for AFM to benefit from it, whatever effect it has on AFM's finances. However, implementing Resolution 17 would not harm AFM's finances, for the following reasons.

First, visa processing fees have only been collected since 2004. AFM was very recently completely solvent without this income.

Second, even with this income, AFM ran a deficit in 2009. An administration which could not keep AFM solvent even with the cash cow of visa processing fees, cannot now argue that it deserves it. The income from visa processing fees is dwarfed by AFM's enormous outlays on legal fees, traveling expenses, new hiring of front-office staff, and executive compensation — all of which the AFM now wants increased.

Astronomical expenditure on legal fees — over $1.9 million since 2007 — has enriched the AFM's law firm, but has been ruinous to the AFM. In the recording musician lawsuits, AFM has insisted upon expensive litigation instead of settlement or negotiation. A source close to the plaintiffs in the recording musician lawsuits noted that the plaintiffs would have been amenable to a settlement in which the 2% levy AFM sought was paid in part to MPF. The administration never explored this or any other opportunity for settlement.

AFM also insisted upon vigorously pursuing for three years a lawsuit against an anonymous blogger, whose identity AFM never discovered and who never attempted to defend the suit. This effort ultimately yielded nothing except enormous expenditure on lawyers. When AFM spends money on that, it cannot credibly claim that compensating displaced musicians would harm its finances.

Who is supporting Resolution 17, and how can I?

Dozens of signatories from the United States and Canada have recognized the need to offset displacement of musicians and signed on to vote YES on Resolution 17.

It Ain't Over

The Rishik case, that is. The COMMITTEE seems to think the case is over:

On April 6th, 2010, the 2nd of the two “RECORDING MUSICIANS/FAREPLAY” LAWSUITS was dismissed. Both of their lawsuits have now been dismissed WITH PREJUDICE.

The cases are not over, however. The Parmeter case is at the 9th Circuit Court of Appeals, and Rafael Rishik writes that his case is headed there as well:

We have been advised that our legal counsel believes that we have strong grounds for appeal, and we will be filing an appeal to the Ninth Circuit shortly.

New York Times Proves My Point on Foreign Orchestras

From today's Times:

When the great orchestras of Europe glide through the United States on tour, they stay at elegant hotels like Le Parker Meridien near Carnegie Hall, play in grand spaces like Symphony Hall in Boston and can receive more than $100 a day in meal money.

Then there is the Moscow State Radio Symphony Orchestra.

The pay? About $40 a concert in most cases, the musicians said.

Check out the map of this foreign orchestra's most recent tour. Did they play in your jurisdiction? Can you compete with $40 a concert? AFM collected a visa processing fee for every member of this sweatshop foreign orchestra.

It is more clear than ever why we have to redirect visa processing fees to MPTF to offset unfair competition from sweatshop foreign orchestras.

http://www.nytimes.com/2010/03/04/arts/music/04symphony.html

Rescue the Music Performance Fund

The Music Performance Fund (MPF) is on its deathbed. Trustee John C. Hall, MPF’s impartial guardian, said in November 2009 that “it’s only a matter of what month the doors would be shut.”

MPF is among the best institutions musicians have created. One of the world’s largest sponsors of live music, it has inspired community partnership, with cities, towns, and private sponsors joining in to pay musicians for their work.

If we let MPF fail, the failure of dozens of AFM locals will not be far behind.

At the same time, AFM collects millions in visa processing fees. Every time a commercial promoter hires a foreign musical act to play in the United States and Canada, they pay AFM a “visa processing fee” to provide a boilerplate “no-objection” letter.

We all know of venues which used to host AFM musicians, but now host foreign musical acts like the Georgian State Dancers, New Zealand Quartet, or State Symphony of Russia. AFM is paid for every one of them, but displaced musicians don’t see a dime.

Foreign musical acts are paid handsomely by commercial promoters. But they’re also subsidized by their home governments, which pay for their uniforms, instruments, and more.

Nobody subsidizes the AFM musician.

That’s why we have to redirect these fees to MPF. It will begin leveling the playing field with foreign unfair competition, and save an institution which has paid us over a billion dollars since its inception.

In the words of Trustee John C. Hall, this proposal “would represent a great building block” and “would certainly put us on the right track.”

Resolution to Rescue MPF

See also:

• Letter from Trustee Hall to President Tom Lee (PDF download)
• Disparity of Hundreds of Thousands of Dollars in AFM Annual Reports
• What Keeps the AFM Afloat?
• Visa Processing Fees and Reverse Outsourcing

Coattail Politics

The landslide victory of the Members Party in New York's Local 802 elections represented the latest in a series of blows to Tom Lee's status quo. But at their inaugural ceremony, these new officers will be sworn in by none other than Tom Lee.

Lee knows his politics and is aware that his survival is in the balance. He will use the swearing-in ceremony as he uses all such opportunities: to charm potential adversaries and solidify support. Even though new Local 802 officers were elected on a platform of change and progress past the divisions and stagnation of Tom Lee's nine years in power, Tom Lee will claim that he is on their side. He is a master in the art of coattail politics.

Take, for example, an article in the September 2008 International Musician. The headline reads

"The AFM Reaches Agreement for Musicians on Wonder Pets!"

But read carefully, and you'll see that it was Local 802 which negotiated the agreement. This piece from Allegro by Fred Barton, explaining the deal in detail, makes no mention whatsoever of participation by Tom Lee, the AFM, or the IEB.

Tom Lee is ready and willing to misappropriate the achievements of others to justify the failure of his nine years in power. The question is, when will we stop believing him?