Almost every record company located in the U.S. and Canada is a party to the Sound Recording Labor Agreement (“SRLA”) with the American Federation of Musicians of the U.S. and Canada (the “AFM”). The SRLA is a collectively bargained agreement between the recording companies and the AFM that regulates business practices, such as how much musicians will be paid in scale wages and benefits when they perform services on behalf of the signatory companies. From time to time, the SRLA is renegotiated, amended and renewed. Incorporated into the SRLA is the Sound Recording Special Payments Fund Agreement (“SRSPF Agreement”).
The SRLA and the SRSPF Agreement also contain provisions requiring those record companies to make payments to the SRSPF based on various exploitations of sound recordings. These exploitations include audio and audiovisual subscriptions and streaming, downloads, physical product (e.g. CD’s,), sampling, and under certain circumstances, when a song is licensed to a third party for use in a new medium. To view the most recent SRLA or SRSPF Agreements see SRLA or SPF Agreement. The payment formulas and rates differ depending on a product’s configuration. For detailed information, including a copy of a payment remittance report and examples on how to calculate the payments for each of the products, send a request to email@example.com.
While record companies and their licensees are required to make payments to the SRSPF on all or some of the products noted above, most of the payments are generated from receipts for audio streams of sound recordings. Payments from the record companies are generally due twice a year for the activity during the previous six months.
The record companies and the AFM rely on the SRSPF to perform all of the administrative functions on their behalf as outlined in the SRSPF Agreement. These functions include collecting payments from the record companies, determining which musicians are eligible for distributions and locating them, calculating the amounts payable them, withholding applicable payroll taxes and remitting them to governmental agencies, and issuing musicians’ year-end wage and tax statements (e.g. W-2 and T4A).