Musicians' union sues record companies over pension fund contributions

'Fairness, transparency severely lacking,' says president
By Dave McNary
|hrreporter.com|Last Updated: 08/10/2015

LOS ANGELES (Variety.com) — The American Federation of Musicians and Employers' Pension Fund has sued five major recording labels for alleged failure to make pension fund contributions.

The suit was filed Monday in federal court in New York against Atlantic Recording, Hollywood Records, Sony Music Entertainment, Universal Music Group Recordings and Warner Bros. Records. It alleges that the five companies failed to make pension fund payments from foreign audio stream revenue and foreign and domestic ringback revenue.

The union asserted that the recording companies entered into an agreement, subsequently renewed, in 1994 requiring the companies to pay 0.5 per cent of all receipts from digital transmissions including audio streaming, non-permanent downloads and ringbacks.

"The record companies should stop playing games about their streaming revenue and pay musicians and their pension fund every dime that is owed," said Ray Hair, AFM international president. "Fairness and transparency are severely lacking in this business. We are changing that."

The AFM is alleging independent auditors discovered last year that the recording companies had not made the required revenue payments from foreign audio streams, ringbacks and foreign non-permanent downloads. The union said attempts to reconcile the issues have been ongoing for several months but have been unproductive.

The suit seeks payment for all missing revenue owed to the AFM Pension Fund, late payment penalties, interest, damages and legal costs.

The new suit is the fifth filed by the union against media corporations for alleged contract violations in the past few months. The actions include a suit against Paramount for allegedly breaching its master contract by recording the score to Renee Zellweger's upcoming film Same Kind of Different as Me in Slovakia, and against Warner Bros., MGM and Paramount for recording film scores outside the U.S. and Canada for Interstellar, Journey 2: The Mysterious Island, Robocop and Carrie.

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