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Entertainers Reach Historic Health Care Agreement

(CelebrityAccess News Service) – Representatives of the American Federation of Television and Radio Artists, AFL-CIO (AFTRA) and BMG, EMI Music, Sony Music Entertainment, Universal Music Group (UMG) and Warner Music Group have reached a tentative agreement on an industry-wide successor collective bargaining agreement covering recording artists. The new agreement was unanimously approved by the AFTRA National Board of Directors and is being forwarded to the AFTRA Health &Retirement Funds Board of Trustees for approval and to the AFTRA membership for final ratification.

The agreement, known as the AFTRA Sound Recordings Code, covers both royalty artists and session vocalists performing on sound recordings. The centerpiece of the tentative agreement is an innovative structure that guarantees access to health insurance under the AFTRA Health Plan to all AFTRA covered royalty artists under exclusive contract to a label.

"This agreement represents a quantum leap forward for recording artists," said AFTRA National President John Connolly. "For the first time, every covered artist under contract to a major record label or other AFTRA signatory label is guaranteed access to basic health care for as long as the artist remains on the label's roster as an exclusive recording artist. AFTRA commends the recording industry for recognizing the importance of providing basic health care to the artists whose music fuels this business, and for working with AFTRA's negotiating committee to develop a breakthrough solution on this issue. I can only hope that the rest of American industry takes note of this revolutionary breakthrough and follows suit to help solve the healthcare crisis in our country."

RIAA Chairman &CEO Mitch Bainwol stated, "We all started the negotiations committed to providing health care coverage for roster artists. We are thrilled that we were able to reach an agreement to provide these benefits, especially given the current economics of our business. We appreciate the hard work and dedication of the AFTRA staff and leadership. We look forward to working with AFTRA and its members on the many issues we have in common."

AFTRA National Executive Director Greg Hessinger noted, "At a challenging time when the U.S. recording business is in turmoil, it would have been the 'safe play' to make a standard deal. Instead, the labels' representatives and the union's bargaining team persisted, confronting the tough issues and working out a creative agreement which does the right thing for the recording artists AFTRA represents."

Under the prior contract, only those artists whose annual royalty earnings reached the AFTRA Health Plan threshold (currently $10,000 per year), could qualify for health coverage after their first year with a label. The new agreement will provide that the labels make special contributions on behalf of artists under exclusive contract whose annual royalty earnings do not meet the minimum threshold, thereby ensuring that artists qualify for individual health insurance under the AFTRA Health Plan for each year that they are under contract to the label.

Other elements of the new agreement include:

* Increases in base session rates averaging 3% per year over the term of the four year contract;

* Additional "contingent scale" payments for session performers appearing on recordings that exceed 157,000 units in sales;

* Increased pension participation for artists who earn royalties of more than $120,000 per year;

* New information-sharing procedures to help track conversions of recordings to films, television and other media;

* Mechanisms which allow union and industry representatives to better address issues of mutual concern as they evolve over the term of the agreement.

Kim A. Roberts, AFTRA Associate National Executive Director and principal negotiator for the union bargaining team said, "This agreement could not have happened without the active involvement of recording artists, artists' representatives and organized labor working in support of the bargaining committee. AFTRA's recording artists owe a great debt to them, as well as to the leadership of the bargaining committee members and staff, particularly Negotiating Committee Co-Chairs Dan Navarro of Los Angeles and Jim Ferguson of Nashville, and National Director of Sound Recordings Ann Chaitovitz. Our committee also commends the labels and their negotiating team for their efforts to negotiate an agreement that both sides can be proud of."

The prior agreement expired on June 30, 2002, but the terms were extended through negotiations pending conclusion of a final agreement. If ratified, the new four-year agreement will run from July 1, 2002 through and including June 30, 2006. –Bob Grossweiner and Jane Cohen