Musicians Union Says It Is Prepared to Strike : Entertainment: The American Federation of Musicians says it will fight to keep a special royalty and a free concert fund.

The entertainment industry, which was hit by a crippling 22-week strike by TV and movie writers in 1988, is bracing for a possible walkout by the American Federation of Musicians, which has told its 185,000 members that it will strike if record companies carry out plans to end payments to two special union funds.

As contract negotiations get under way today, federation officials have said they are prepared to fight to keep a special royalty fund as well as the Music Performance Trust Fund, set up in 1948 to pay for free live concerts. The latter fund has been the subject of a heated dispute at least since 1973, when the record industry began arguing that its original purpose--to provide jobs for live concert musicians displaced by the growth of the modern studio-based recording industry--has become obsolete.

“We have been put on notice by the (record) companies that their primary demands will be the elimination of the Music Performance Trust Fund,” said President J. Martin Emerson in a letter sent to union members earlier this month. “They also seek elimination of the Special Payments Fund. . . . Apparently, the companies are intent on inviting a strike.”

It is unclear, however, whether musicians will support a strike over the issue. The federation says it has 185,000 members, but only about 27,000 of them work regularly in the record industry, union officials estimate.

Emerson could not be reached for comment Monday, but a federation spokesmen said the union plans to press the issue of maintaining the two funds. A strike could delay completion of film and television sound tracks as well as disrupt the recording industry.

The Special Payments Fund pays studio musicians based on a complex formula devised by the federation and recording industry. The payments, which have declined substantially in the past two decades, are similar to the “residuals” earned by actors in the film and TV industries.

The Music Performance Trust Fund was established in 1948 as a nonprofit public service organization through negotiations with the federation and record companies. A royalty fee from the sale of record albums and tapes is paid by the record companies to the fund to finance free musical performances at veterans’ hospitals, schools, nursing homes and other facilities.

While record industry officials say about $320 million has been paid into the performance fund since it was created, federation officials say it has received less and less industry support in recent years. In 1989, for example, royalty fees paid to the fund totaled $8.3 million, compared to $10 million in 1987.

Norman Samnick, a New York lawyer who is the record industry’s chief negotiator, argued that “the (trust) fund has gone beyond its time. We want to eliminate the trust fund and cut the” special payment fund.

Samnick also said that the $6.2-billion-a-year record industry has grown large enough that it should be able to provide work for displaced musicians, many of whom drew their salaries from performing on live radio shows. These displaced musicians have already been compensated through the performance trust fund, he claimed.

“It’s like when the plumber comes and fixes the bathroom,” Samnick said of the recording industry’s position, “you don’t (then have to) pay every time you flush the toilet.”

Three years ago, former federation President Victor W. Fuentealba was defeated in a reelection bid, in part for his failure to press the trust fund issue. And this year, for the first time, the union has launched a high-profile campaign to win public support for continued funding of the free concerts.

Meanwhile, several record industry officials--who said they are worried about the threat of a walkout--are trying to speed work on some forthcoming albums to avoid being hurt by any possible strike.

A CBS Records official, who declined to be identified, said a musicians strike could have as much impact on the record industry as the writers strike had when it disrupted TV production, forcing network television executives to scramble for replacement programming two years ago.

“Sure, the industry is worried about it,” the official said. “You can’t make money off of reissues (of albums) forever,” the official added.

MUTE CONCERN

Labor Columnist Harry Bernstein says the recording industry is being shortsighted in its attempt to end funding for free live musical concerts. D3