For specific questions relating to the Fund’s operation
contact the Fund Administrator, Dennis Dreith, at (818) 755-7777. All other matters relating to the employment of musicians, contract terms, or other benefits are outside of the Fund’s scope, and should be addressed to the AFM or your Music Contractor.
All information courtesy of the Film Musicians Secondary Markets Fund
      For the fiscal year ending March 31, 2000, the Fund will collect approximately $51 million in revenue generated by close to 5000 films, making the average contribution only $10,200/per film.
HOW DOES IT WORK?

• Secondary Markets contributions do not include any revenue from a Primary Market:

NO Domestic Box Office

NO Foreign Box Office

No residual obligation exists with respect to any revenue from direct cassette rentals.

Residual obligations to contribute to the Secondary Markets Fund are triggered only if a theatrical film or television production generates revenue in one or more of the supplemental markets.

Primary Market Supplementary Market
Theatrical Film videocassette, pay cable TV (premium channels), and free television (network, syndication, basic-cable) 
TV film or TV series videocassette, pay cable TV and in-flight
Home Video (pay TV / videocassette) Free TV

Films initially produced for the Home-Video market, i.e. Pay-TV, make no payment for Video Cassette sales.

The contribution formula is generally 1% of the gross revenue [directly] received from the applicable supplemental market(s), minus certain allowed deductions.

• All residual contributions are made before income taxes are paid on revenues, thus reducing IRS obligations.

• By executing a Buyer/Distributor Assumption Agreement, a Producer can transfer and/or terminate residual obligations, as is routinely done with the DGA and SAG.

If a film makes no money in supplemental market exhibitions, then no contributions to the Secondary Markets Fund are due.

For Example: A Producer with gross earnings of $995,000 from a supplemental market would make a payment to the Fund of $9,950.

Generally, productions have the bulk of their supplemental market exhibitions three months to two years after initial release. Contributions to the Fund are to begin on or before 60 days after the end of a calendar quarter in which those payments were accrued.

Following are some examples of typical employer contributions based on the film’s applicable supplemental market activity:
  • A 1996 Low-Budget Independent film with a Domestic box office gross of $103 million, Foreign box office of $70 million—none of which resulted in any payments to the Fund— has contributed a cumulative total of $335,000 to the Secondary Markets Fund only as a result of pay TV, free TV and substantial cassette revenues.
  • This 1990 "thriller" feature generated a Domestic box office gross of $61.6 million, and Foreign box office of $23.1 million, has generated cumulative contributions of $218,100 to the Secondary Markets Fund.
  • A Major Studio 1994 International Action feature with a Domestic box office gross of $141 million, and Foreign box office of $102 million, plus millions more in cassette and TV sales has yielded contributions to the Fund of $293,000 to date.
  • A 1996 theatrical release with a Domestic box office gross of $14.9 million has yielded contributions to the Fund of $58,500 to date.
The Theatrical and Television Motion Picture Film Musicians Secondary Markets Fund is governed as a multi-employer alliance trust in accordance with the terms and conditions of the AFM Basic Television Motion Picture Agreement and the AFM Basic Theatrical Motion Picture Agreement. This document offers only a very general overview of the formula for paying residual contributions, and nothing in it supersedes the provisions of those Agreements.