Are we in the real estate business or the music business?

According to President Ray Hair's message in the June 2014 International Musician, relocating the AFM New York office has been an ongoing discussion since 1988. Thanks in part to the 99th Convention's $1.2 million annual dues increase, it now seems to be the AFM’s top priority.

President Hair tells stories of real estate purchases by Local 802 and Local 72-147 in the past few decades, saying that any investment by AFM will appreciate and succeed similarly.

The Securities and Exchange Commission (SEC) requires this disclaimer on investment advertising: "Past performance does not predict future results." We should remember this when considering the investment being discussed here.

For example, what evidence exists that the AFM's proposed investment is so deflated in price that it will appreciate similarly to President Hair's examples? How do we know that its mortgage interest, up-front costs, condo fees, and maintenance are appropriate given the AFM's cash flow and treasury?

Rumors persist that President Hair and Secretary Folio have already entered into a purchase and sale agreement, on an empty office-condo property which is encumbered by a lien and needs major renovations. This is a high risk purchase.

I respectfully ask President Hair and Secretary Folio to provide real information (such as price, terms and conditions, etc.) to the AFM membership, rather than salesmanship for a high-risk investment by a union still in serious crisis.

What's In It For Us?

At Convention 2013, the per capita payment was increased by $10 per AFM member.

Here is what AFM intends to do with the money:

$650,000: AFM relocation fund

$100,000: Canadian international representative (IR)

$100,000: Reinstate IR travel

$350,000: Re-establish staffing levels

$100,000: Create a payroll service

$100,000: Legal compliance

$100,000: Organizing and recruitment efforts

Total: $1,500,000

Based on an estimate of 75,000 AFM members, $10 per member amounts to $750,000. So the above budget represents two years’ worth of spending the increased per capita payment.

We voted for this Administration believing that it understood what is happening to the AFM. But the above proposal is almost entirely devoted to beautifying the AFM offices, looking to the past, and keeping the status quo. There is zero consideration for the 75,000 members paying the bills.

This proposal continues the AFM’s decade-long obliviousness to shrinking locals, fleeing membership, and an imminent collapse.

I backed and voted for this Administration because I believed in its enthusiasm and intelligence. I respectfully propose that the President and Executive Board create a diverse commission of members to study and formulate a new structure and plan for the AFM.

If our leadership continues on this path, failing to confront the severe structural problems facing the union, we will continue to see nothing but dues increases that solely benefit the national offices, leaders, and employees, until there are no members left to pay their expenses.

The Patients are Dying

At the last several AFM conventions, the International Executive Board has recommended (1) reducing union democracy by making conventions more infrequent; and (2) increasing dues.

This year is no different. These recommendations are designed to squeeze more dollars from members, but provide no benefit or hope to the rank and file membership. Instead, they are a sign of a union in decline.

For such recommendations to be taken seriously, they must be accompanied by a sense of urgency regarding our shrinking locals, fleeing membership, and slow but imminent collapse.

While I believe our leadership understands what is really happening to the Federation, it is wrong to propose such desperate and demoralizing medicine without providing an antidote: a comprehensive plan for the future.

There is enthusiasm and intelligence in this union. I respectfully propose that to earn passage of these recommendations, the President and Executive Board must create a diverse commission of members to study and formulate a new structure and plan for the next generation of the AFM.

If we convention delegates do not force leadership to confront the issues, we will continue to see dues increases and convention cuts until there are no members left to pay.

The Struggle for Canadian Independence

2011 was the year the Musicians' Rights Organization of Canada (MROC) and the Canadian Federation of Musicians (CFM) cleverly achieved independence from the AFM.

The journey towards independence began at Convention 2010, where the Lee Administration and the IEB, of which Ray Hair was a member, approved the move. The vote appeared to allow an independent MROC to administer a growing $30 million record royalty disbursement fund.

The newly elected Hair Administration had second thoughts in 2011, and it attempted unsuccessfully to alter the IEB vote creating MROC's independence. A lawsuit ensued, which was settled in favor of MROC's independence.

During this turbulent time, the Hair Administration alienated officers of the Toronto Musicians Association, who were sued individually by MROC. The settlement imposed a gag order on these officers, who received no help or communication from the Hair Administration.

The newly named Canadian Federation of Musicians (CFM) has the necessary understanding of its government grants and subsidies to benefit professional musicians and will operate independently of the AFM. Its work on cementing positive business relationships with all professional creative groups and organizations is part of a new business plan that should grow the 21st century Canadian music industry.

The world of electronic communication influences audiences demanding to see and hear live music throughout the world. Consolidated work between AFM and CFM to diminish and abolish visa impediments on musicians could create more work for American and Canadian musicians. For example, Sting's 2010-2011 American tour opened and closed in Canada, toured America through Portland, Oregon with the "London Orchestra," employing American, Canadian and British musicians.

The best is yet to come for all musicians.

AFM and MROC Reach Settlement

The recently formed Musicians' Rights Organization of Canada (MROC) had sued AFM for $3 million in damages for breach of contract and other charges.

AFM countersued for $1 million claiming misrepresentation and breach of fiduciary duty.

President Hair's persistent negotiations and extensive talks with the principals of MROC, plus AFM's immediate countersuit, established the necessary leverage to formulate the settlement, the terms of which are being reduced to formal agreement by attorneys for both sides.

President Hair did not flinch or waiver in the face of the suit, which may have resulted in a permanent split between AFM and its Canadian members. The leaders of MROC, Len Lytwyn and Bill Skolnick, also used good judgment in setting aside their initial reluctance to compromise.

Internal protracted lawsuits are expensive, destructive and lead to organizational breakdowns devastating to all members. The settlement was a wise move for all and a solid test of President Hair's leadership.

We will have more details on the substance of the suit, which stems from a situation created by former President Tom Lee, and the details of the settlement, in the coming weeks.