SAG-AFTRA Members Ratify Sound Recordings Code

LOS ANGELES (Sept. 17, 2015) — Members of SAG-AFTRA voted to ratify the SAG-AFTRA National Code of Fair Practice for Sound Recordings (Sound Recordings Code), which includes a groundbreaking payment formula for online streaming and non-permanent digital downloads that encompasses revenue from these types of exploitations generated outside the United States. The vote was 98.83 percent in favor of the new contract, which runs from Jan. 1, 2015 to Dec. 31, 2017.

The ratification vote – via online voting and through requested paper ballots – follows the SAG-AFTRA National Board’s recommendation for members to vote yes on the new agreement with the recording industry, including Sony Music Entertainment, affiliates of Warner Music Group, Universal Music Group, Capitol Records LLC and Hollywood Records Inc. Negotiations with the labels began in fall 2014 and continued for several months in Los Angeles and New York.

SAG-AFTRA’s 15-member negotiating committee was chaired by Dan Navarro, and Jon Joyce, Janice Pendarvis and Pat Alger served as vice chairs. Stefanie Taub, Duncan Crabtree-Ireland and Randall Himes were co-lead negotiators for the union. The labels’ lead negotiators were Bernard Plum and Michael Lebowich of Proskauer Rose LLP.

“I commend Dan Navarro and our entire negotiating team for their hard work on this agreement,” said SAG-AFTRA President Ken Howard. “As technology changes the industry, it is imperative that our contracts change with the times and always put members’ best interests first and foremost.”

“I am proud of the gains we achieved in this groundbreaking contract and I’m pleased that the voting members agree,” said Navarro, SAG-AFTRA’s national vice president, recording artists. “This is a big win for our recording artist members; it is truly a contract for the 21st century.”

Highlights of the new contract include:

• Groundbreaking inclusion in payment formulas of label revenue generated from worldwide exploitation of member work in online streaming services and as non-permanent digital downloads;
• For the first time, payment of AFTRA Health and Retirement (H&R) contributions on a portion of domestic and foreign streaming payments;
• Substantial restructuring of the compensation system for licensing of sound recordings, streamlining and making licensing more effective for the industry, while generating more revenue for performers;
• Overall increase to minimums of 2 percent each year of the contract; and
• Improvement to H&R contributions, including:
• Increase of 0.25 percent in the basic H&R contribution rate effective Jan. 1, 2017;
• 12.5 percent increase in the cap on H&R contributions for groups of three or more performers; and
• Substantial increase in cap on label payment for roster artist health insurance eligibility.

The SAG-AFTRA National Code of Fair Practice for Sound Recordings is a successor to the pre-merger legacy agreement, which originated in 1951, and covers session singers, royalty artists, announcers, actors, comedians, narrators and sound effects artists who work on recordings in all new and traditional media and all music formats, as well as audiobooks, comedy albums and cast albums. The agreement covers work for the major record labels and sub-labels, as well as signatory independent record labels.