Two labor unions back EMI sale to Universal Music

SAG-AFTRA, the merged entity of the Screen Actors Guild and the American Federation of Television and Radio Artists, and the American Federation of Musicians gave their blessings Tuesday to Universal Music Group's $1.9-billion deal to buy EMI's recorded music business, which represents bands such as Coldplay, Massive Attack, Pink Floyd and others, from Citigroup Inc.

The pending deal, forged in November, also calls for Sony ATV to pay $2.2 billion for EMI's publishing assets. Both require the approval of U.S. and European antitrust regulators, who must decide in the next few months whether the deal would restrict competition and harm consumers.

A number of critics have piped up against the deal, including the consumer advocacy group Public Knowledge and Warner Music Group, whose former Chief Executive, Edgar Bronfman Jr., took a swipe at the pending merger in January, calling it "dangerous." (Warner had also offered to buy EMI, but was outbid by Universal.)

It's not usual for a labor union to speak up in support of big business deals. With that backdrop, the dual union endorsements of the merger seems even more unusual, especially because other labor groups such as the Writers Guild have been outspoken critics of media consolidation.

Why this departure, then? In a word -- jobs.

SAG-AFTRA, which represents 150,000 actors, writers, recording artists and other media professionals, acknowledged in its letter Tuesday to the U.S. Federal Trade Commission that the group has "generally expressed skepticism toward corporate mergers and acquisitions." The FTC has taken the lead in examining the merger for potential antitrust issues.

In this case, however, the union said the merger would save EMI from drifting into "oblivion," wrote Kim Roberts Hedgpeth, outgoing co-national executive director of SAG-AFTRA, who this week announced her pending retirement.

Allowing EMI to deteriorate on its own "would also do a disservice to American workers, whose jobs would be at risk should EMI wither further or be sold in pieces to fuel quick profits for capital investors," she added.

Raymond Hair Jr., president of the American Federation of Musicians of the United States and Canada, put forth the same argument in a separate letter to the FTC, saying "sustaining the EMI legacy, which produced world popular music artists such as the Beatles and Frank Sinatra, under UMG's oversight would appear to benefit AFM recording musicians."

So far, neither the FTC nor the European Commission have issued opinions on the merger, which would fold EMI's assets into two of the world's largest record companies and reduce the number of major music companies from four to three.

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-- Alex Pham

Photo: Chris Martin, lead singer of Coldplay, a band signed with EMI Music. Credit: Rafa Rivas / Getty Images.

Kim Roberts Hedgpeth to step down as co-director of SAG-AFTRA

Kim Roberts Hedgpeth, the longtime leader of the American Federation of Television and Radio Artists, is stepping down as a co-national executive director of the newly merged union, SAG-AFTRA.

"It was with great pride and enormous satisfaction that I joined union members, colleagues and staff on March 30 to celebrate the overwhelming vote in favor of AFTRA and SAG,'' Hedgpeth said. "Having achieved this important goal, for which many of us worked so tirelessly for so many years, now is the right moment to begin a new chapter in life."

Hedgpeth, who will leave her post April 30, has served as AFTRA's national executive director since 2005. But her future was cast into question once AFTRA and SAG members voted on March 30 to merge their organizations.

Board members from both unions had named Hedgpeth and SAG Executive Director David White as co-national executive directors, but it was widely expected that White would eventually head the combined group after a transition period.

During her tenure at AFTRA, Hedgpeth served as chief negotiator for many of AFTRA's national contracts covering actors, broadcast journalists, recording artists, among others, and was widely praised for her contributions to the union.

"Kim is in a league of her own,'' said Roberta Reardon, co-national president of SAG-AFTRA. "Through her remarkable negotiating skills at the bargaining table, her superb administration of the union and her principle attentiveness to the needs of members, Kim has improved the careers and lives of thousands of union members around the nation."

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Photo: Kim Roberts Hedgpeth, co-national executive director of SAG-AFTRA. Credit: AFTRA.

SAG and AFTRA members give thumbs up to merger

Creating Hollywood's largest entertainment union, members of the Screen Actors Guild and the American Federation of Television and Radio Artists have voted overwhelmingly to combine into a single bargaining unit. 

In an resounding show of support, SAG members voted 82% in favor of the merger, while AFTRA members voted 86% in favor. That was well above the 60% threshold needed for the combination to take effect.

SAG represents 125,000 actors, extras and stunt performers in movies and television shows. AFTRA has about 70,000 members who are actors as well as singers, dancers, disc jockeys, sports announcers, comedians and broadcast journalists, among others. About 40,000 people hold membership in both labor groups.

The historic vote comes nearly two years after union leaders began discussions to merge in a bid to gain more leverage in contract negotiations with studios and to end a long history of jurisdictional disputes and feuding over negotiating strategy.

Under the plan, the new consolidated union will be called simply SAG-AFTRA. National officers, including the president and secretary-treasurer, would be elected directly by members. However, some other positions, such as an executive vice president, would be elected by delegates at a convention held every two years -- a concession to AFTRA's tradition of using conventions and delegates. SAG elects its officers directly by a vote of members.

Dues will increase for some members, including for current AFTRA-only members, and drop for others, including those who are already dual card holders. 

The results represent a victory for leaders of both unions, who campaigned heavily to join forces after a bitter dispute erupted in 2008. At that time, AFTRA suspended its longtime bargaining partnership with SAG, which lost its traditional dominance in prime-time television as producers steered most of their contracts for new shows to AFTRA. SAG President Ken Howard and his supporters were elected on a pledge to merge with AFTRA.

Two previous attempts at combining the unions failed in 1999 and 2003, when 58% of SAG members voted to endorse it, falling just short of the required 60%. AFTRA members voted 76% in favor of the combination.

A group of actors including Ed Harris, Martin Sheen and Ed Asner recently filed a lawsuit to block the latest referendum vote, arguing that the SAG board breached its fiduciary duties to conduct an actuarial impact study detailing the effects of the proposed merger on health and pension benefits for SAG members. But a federal judge earlier this week rejected their request for an injunction blocking the ballot count.

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AFTRA board scales up its fight against music labels

The fight between performers who work on music videos for artists such as Lady Gaga and Justin Timberlake and music labels escalated Saturday.

The national board of the American Federation of Television and Radio Artists voted to give their representatives authority to issue a do-not-work-order against music labels or producers if the parties are unable to reach an agreement in contract negotiations.

For more than a year, AFTRA has been trying to secure a union contract deal with music companies that would provide minimum pay and benefits to dancers and others who perform in music videos. The union argues that the need for such an industrywide contract has increased as the music video industry has grown, thanks to the popularity of performers such as Madonna and Beyonce and online video services such as Vevo. But the talks, which were last held in January, have so far been unsuccessful, leading to the current standoff.

Earlier this year, dozens of members of the Los Angeles dance community held a rally and a flash mob performance, set to the tune of Aretha Franklin's hit "Respect," outside the offices of Sony Music Entertainment in support of efforts by music video performers to secure a union contract.

The vote comes just days before members of AFTRA are set to vote on a merger agreement with the Screen Actors Guild.

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Photo: Music video performers do a flash mob dance during a Jan. 6 rally in Beverly Hills. The rally was organized by The American Federation of Television and Radio Artists. Credit: Ricardo DeAratanha / Los Angeles Times

AFTRA Retirement Fund reaches settlement with JPMorgan Chase

JPMorgan Chase & Co. has agreed to pay $150 million to settle a lawsuit filed by the American Federation of Television & Radio Artists Retirement Fund and other investors over losses incurred in the midst of the global financial crisis.

The settlement was disclosed in recent filings with the U.S. District Court in Manhattan. The settlement allows the parties to "avoid the risks and costs associated with trial, as well as potential years of continued litigation on appeal," the plaintiffs said in court documents. 

If approved by the court, the settlement would end litigation that began in 2009, when AFTRA's pension fund sued JPMorgan, alleging the firm improperly handled the fund's investments in a securites loan program operated by Sigma Finance Corp., an investment fund created by Gordian Knot Ltd. in London, which collapsed in October 2008. The suit alleged that JPMorgan Chase lost a "substantial portion" in cash collateral in medium-term notes issued by Sigma Finance.

Creditors seized more than $25 billion of Sigma's $27 billion in assets in September and October 2008, leaving about $1.9 billion as security for about $6.2 billion of outstanding medium-term notes.

JPMorgan "buried its head in the sand and refused to heed warnings signs" that the company would not be able to repay its notes, according to the complaint. AFTRA was joined in the suit by pension plans for the Manhattan and Bronx Surface Transit Operating Authority and the Imperial County Employees Retirement System.

A preliminary hearing on the settelment has been scheduled for June 4.

Representatives of the AFTRA Retirement Fund declined to comment on the settlement or how much of the $150 million it would receive.  AFTRA represents about 70,000 actors, dancers, singers and other performers.  The unions members are voting this month on whether to merge with the larger Screen Actors Guild.

-- Richard Verrier

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Photo: Music video performers rally for safe, fair working conditions and health care for AFTRA members. Credit: Ricardo DeAratanha / Los Angeles Times

AFTRA health and pension plan trustees take union to task

In what could be a move by employers to throw some cold water on the planned merger of Hollywood's two actors unions, trustees for the health and pension funds of the American Federation of Television and Radio Artists have issued a statement challenging some legal opinions cited by the unions.

The trustees of AFTRA's health and retirement plans, which include representatives from labor and management, on Thursday took issue with a "feasibility review" document the unions posted on their websites this week. Those cited the opinion of various lawyers -- including Jani Rachelson, co-counsel of the AFTRA Health and Retirement Funds -- stating "there are no legal impediments to merging the plans." 

The feasibility review was part of an overall merger package the boards of the two unions recently approved in a bid to gain more leverage in negotiations with studios, which in the past have successfully exploited divisions between the two groups to gain the upper hand in contract talks. Members of each union will vote on the merger in the coming weeks.

On Thursday, the board of trustees for the AFTRA health and pension funds said the feasibility review did not represent the opinion of the board.

"The Board of Trustees did not request or authorize this opinion of Fund co-counsel and had no prior knowledge of this letter before reading the posting on the websites,'' the trustees said in a statement. "Although there is no doubt that planned mergers are legally permissible in appropriate circumstances, the merger of pension and health funds as large and divergent as the SAG and AFTRA plans raise complex and unique financial, legal and benefit issues which can only be addressed through a comprehensive analysis performed by the funds."

Details on how the unions' respective health and pension plans will be combined will be addressed only after members approve a merger in upcoming referendum.

A spokeswoman for AFTRA declined to comment on the matter. 

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Screen Actors Guild votes to approve merger plan

The Screen Actors Guild national board of directors voted overwhelmingly to approve a plan to merge with its sister union, the American Federation of Television and Radio Artists.

The board voted 87% to 13% in favor of a historic merger agreement with AFTRA that includes a proposed constitution and dues payment plan for what would be the largest labor group in Hollywood.

SAG represents about 125,000 actors; AFTRA has 70,000 members, including actors, broadcasters, disc jockeys, singers and dancers. At least 40,000 people are members of both unions. The union is to be called SAG-AFTRA.

AFTRA's board is expected to approve the merger package this weekend, clearing the way for a referendum to be held by members of both unions in the coming weeks. The merger would take effect only if at least 60% of those who vote approve the marriage.

A previous attempt at merging the unions narrowly failed in 2003, partly out of fears that SAG would lose its autonomy. But support for the idea has grown considerably since then. Leaders of both unions want to join forces to end years of bickering and present a more unified voice in contract negotiations with employers.

Under the plan, national officers, including the president and secretary-treasurer, would be elected directly by members. However, some other positions, including that of an executive vice president, would be elected by delegates at a convention held every two years, a nod to AFTRA's tradition of using conventions and delegates. SAG elects its officers directly by a vote of members. Dues will increase for some members and drop for others.

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Photo: Screen Actors Guild President Ken Howard. Credit: Al Seib / Los Angeles Times

SAG-AFTRA merger means some union dues will rise as others fall

The proposed merger between the Screen Actors Guild and the American Federation of Television and Radio Artists will bring higher dues for some actors and lower dues for others, depending on which labor group they already belong to before the marriage.

SAG members will see as much as a 15% decrease in so-called working dues, which are calculated as a percentage of a member's earnings. AFTRA-only members will see their working dues increase by up to 6%, according to a board member who asked not to be identified because the plans are confidential.

Additionally, base dues -- the dues that actors pay for simply being a member of the union -- will increase substantially, to nearly $200 from about $120 a year. However, the nearly 50,000 members who already belong to both unions will see a decline in total fees after the merger, because they will be paying dues to one organization instead of two.

Currently, SAG members pay higher percentages and have higher caps on their incomes than their counterparts at AFTRA. The proposed dues change is intended to reduce the gap.

SAG has about 125,000 members while AFTRA claims 70,000 members. The proposed dues changes are part of a merger agreement reached last week and reviewed by board members from SAG and AFTRA on Sunday. The boards of SAG and AFTRA are scheduled to vote on the proposed merger of the unions next weekend.

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SAG and AFTRA craft merger plan

Hollywood's two main actors unions, the Screen Actors Guild and the American Federation of Television and Radio Artists, early Monday morning took a historic step toward combining their two unions.

The Group for One Union, which is made up of leaders of SAG and AFTRA, hammered out an agreement to merge the unions after nine days of intensive talks -- held out of the public view at the Renaissance Hollywood Hotel.

Neither of the unions would publicly comment on the agreement, but people familiar with the matter said it contains a proposed constitution, governance structure, and dues-payment plan for what would be the largest labor group in Hollywood.

The proposed merger plan comes after nearly two years of negotiations between leaders of both groups to join forces in a bid to gain more leverage in contract negotiations with employers and to end a long history of feuding over bargaining strategy and other matters.

While SAG represents about 125,000 actors, AFTRA claims more than 70,000 members, including actors, broadcasters, disc jockeys, singers and dancers. At least 40,000 people are members of both unions.

The plan is to be recommended later this month to SAG's and AFTRA's respective boards, which are expected to formally endorse the merger document before it is sent to members for a ratification vote, possibly in April. The merger will take effect only if at least 60% of those who vote endorse the plan.

As expected, the proposed constitution represents an attempt to combine the different cultures of the two groups, said one person who was involved in the confidential talks but asked not to be identified. For example, national officers, including the president and secretary-treasurer, would be elected directly by members. However, some other positions, including that of an executive vice president, would be elected by delegates at a convention held every two years, a nod to AFTRA's tradition of using conventions and delegates. SAG elects its officers directly by a vote of members.

A previous attempt at merging the unions narrowly failed in 2003, partly out of fears that SAG would lose its autonomy.

Support for the idea, however, appears to have grown on both sides in the aftermath of an ugly and highly public fight that erupted in 2008, when AFTRA suspended its longtime bargaining partnership with SAG and negotiated a separate prime-time TV contract with the studios. The split hurt SAG's bargaining leverage and its coffers, as producers swung most new prime-time TV shows to AFTRA because it was perceived as the more stable union.

The splintering of work between the unions has taken a toll on actors as well. Many have complained that it is tougher for them to earn the minimum pay necessary to maintain or qualify for health and pension benefits because their work is increasingly divided between SAG and AFTRA.

The merger plan, however, does not address how the unions' separate health and pension plans will be combined, a key question for many. That issue is expected to be addressed with trustees of the plans once a merger deal is finalized.

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Music video dancers rally outside Sony to secure union contract

Dancers who work on music videos for Lady Gaga, Justin Timberlake and other performers staged a "solidarity rally" in Beverly Hills on Friday, while similar rallies were held concurrently at Sony offices in Miami and New York.

Dozens of members of the Los Angeles dance community held a rally and a flash mob performance, set to the tune of Aretha Franklin's hit "Respect," outside the offices of Sony Music Entertainment in support of efforts by music video performers to secure a union contract.

"We dance because it's our passion, but we also expect to be taken seriously as professional performers in the entertainment industry,'' said Dana Wilson, a dancer who has performed with Justin Timberlake and others.

They protest targeted Sony, an AFTRA spokeswoman said, because it’s one of the largest music labels and is an owner of Vevo, the fast-growing online music video service for music videos.

The American Federation of Television and Radio Artists, which represents actors and other performers, organized the protest in advance of negotiations with Sony and other music labels. For more than a year, AFTRA has been trying to secure a union contract deal with music companies that would provide minimum pay and benefits to dancers and others who perform in music videos.

The last round of talks ended in June, and the next is set to start Wednesday, with Sony, Universal Music Group, Warner, EMI and Disney and their subsidiary labels.

The union, which has 77,000 members, argues that the need for such an industry-wide contract has increased as the music video industry has grown, thanks to the popularity of performers like Lady Gaga, Beyoncé and the fans that follow their videos online through services such as Vevo, a joint venture of Sony Music Entertainment, Universal Music Group and Abu Dhabi Media.

"It's time that these performers receive contractual protections and health and pension benefits for their work, particularly when music videos have become a new source of revenue for the labels,"  Randall Himes, AFTRA national director of sound recordings, said in a statement.                                                                  

A spokeswoman for Sony Music Entertainment declined to comment.  

Watch the flash mob below:

 

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Photo:  Music video performers doing a flash mob dance during a rally at Electric Fountain Beverly Hills Park, January 06, 2012. The rally was organized by The American Federation of Television and Radio Artists. Credit: Ricardo DeAratanha/Los Angeles Times.