Those who qualify get some health insurance and monthly pension checks.
But unlike salaried radio and television employees who also are covered by AFTRA, recording artists have more difficulty substantiating their income because royalty calculations often are a convoluted practice in the record business.
Record labels typically pay artists an advance after they sign a contract. Artists are, however, required to repay the advance and reimburse the label for costs associated with studio recording, video production, touring and radio promotion before earning a penny in royalties.
Record companies also deduct packaging fees and pay reduced royalty rates for albums sold overseas and in record clubs. In most cases, artists don't receive a royalty check for years.
Disputes over royalty payments are common in the music business. In the past, major stars have uncovered hundreds of thousands of dollars in missing royalties after they audited their record labels' books.
And music industry consolidation has complicated the issue. Many bookkeeping records have been lost or destroyed as artist catalogs have been bought and sold numerous times over the last four decades in a spate of mergers and acquisitions.
In the early 1990s, several music corporations acknowledged underpaying blues and soul stars and increased royalty rates on future CD sales.
That action, however, did nothing to assist artists in substantiating underpayments by record labels to the AFTRA fund.
The lawsuit filed by Moore and others contends that record companies in the 1950s and 1960s did not accurately report all royalty earnings to the AFTRA fund and failed to make the required contributions to their pension accounts.
The current dispute centers primarily on the interpretation of language in a collective bargaining agreement between the record labels and AFTRA from 1959 to 1995, which established how much music companies were required to contribute to the AFTRA fund.
As a result of the lawsuit, the disputed language in the collective bargaining agreement was renegotiated by the parties in 1995 to more clearly define the record companies' contributions to health and other benefit plans for artists.
AFTRA fund trustees do not plan to tap into any of the organization's $2 billion in assets to resolve the case. Trustees intend to use $8 million from an insurance policy to settle the dispute--about $2 million of which would go directly to the plaintiffs' lawyers.
Under the proposal, the trustees have offered the 15 named plaintiffs in the suit about $100,000 each. A number of musicians, including Jerry Butler and Lester Chambers, intend to accept the offer.
Others, including Moore and the estates of Wells and Wilson, have been fighting the settlement, contending that it prevents former stars from recovering benefits.
Last week, opponents of the settlement acquired a powerful new ally in Greg Hessinger, the national executive director of AFTRA. Hessinger, who also is an AFTRA fund trustee, deems the settlement unfair because it would "sacrifice the rights of thousands of artists" and "deprive [them] of fundamental rights of due process."
A hearing on the proposed settlement is scheduled to take place in the District Court in Atlanta on June 20--just 10 days before AFTRA's collective bargaining deal with the major labels expires.
Recently, AFTRA proposed that in the future music companies should be required to contribute a fixed annual amount to the AFTRA fund to help prevent lapses in benefit coverage for artists.
AFTRA representatives said the industry, which generates more than $32 billion in annual global sales, will need to collectively contribute at least $20 million over the next three years to help bolster health-care and pension coverage for artists in the future.
"It's a relatively small investment in talent for the record labels that could provide a very effective way to give artists peace of mind, which will permit them to focus on creating music the public can enjoy--and purchase," Hessinger said in an interview. "It's a benefit plan that offers continuous protection for artists and makes good business sense for music companies."
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