Reprographic Royalties

(NOTE: Originally published March 13, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

If you’re the insatiably curious type and actually took time to browse through the Guild’s 2011 LM-2 financial report to the Department of Labor, you might have been puzzled to learn that most of the Guild’s revenue did not actually come from member dues.  Not by a long shot; far and away the largest chunk of change the Guild received in 2011 is listed on page 4 of the report as simply “Other Receipts”:

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So what the heck is that $593,275 all about?  The “14” circled in red refers to Schedule 14:

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Schedule 14 reveals that the real golden egg in the Guild’s fiscal basket is the $541,788 in Reprographic Royalties paid by the Authors Coalition of America (ACA).  Guild members who’ve been around a while probably have heard of them, but newer members are likely to be completely in the dark.  In my time at the Guild, there’s been very little open discussion about them; so to remedy this, here’s a very brief summary, which I’ll follow with links to more detailed articles that will give you a better picture of this very crucial part of the Guild’s finances.

Reprographic Rights- The Basics

Many countries have Reproduction Rights Organizations (RROs) that are given authority by their nation’s copyright laws to issue licenses and collect fees for the photocopying of copyrighted materials.  RROs collect money in two ways; from “title-specific” fees, generated when copyright owners are identified and can be reimbursed directly for the copying of their works; and from “non-title-specific” fees charged for copying without recording who the individual owners are.  This can happen where laws allow for the issuing of blanket licenses to institutions such as universities that want to photocopy large volumes of works without having to track each and every copyright owner. RROs collect and then redistribute non-title-specific funds to organizations that serve creative communities, so that artists and authors can at least benefit in some general way from the copying of protected works. These are the “reprographic royalties” that the Guild has been receiving.

There are many RROs around the world organized through the International Federation of Reproduction Rights Organizations (IFRRO).  Since copyright law varies from country to country, the collection and redistribution of money is complex; for the most part it’s done through bilateral agreements between RROs of different nations, based on IFRRO guidelines.

In the United States, we do not have an RRO established by the federal government;  however, IFRRO has designated the Copyright Clearance Center (CCC), a nonprofit corporation, to receive funds from other countries and redistribute the money to organizations that support creators in America.  The CCC gives a portion to the Authors Coalition of America, of which the Graphic Artists Guild is a member.

An article written by past Guild president Jonathan Combs is archived on the Guild’s website (no longer available) and gives a reasonable explanation of IFRRO, RROs, and reprographic rights money:

Foreign Reprographic Royalties: What They Are and Why They’re Important
by Jonathan Combs, Guild National President, 1998-2000
November, 2002

Note however, that in the article there’s mention of contractual limitations on the use of this money, making the situation a bit more complicated.  In addition, the following quote speaks to our current managerial issues at the Guild:

“Several important principles guide RROs in their work. One is the concept of transparency — to be as open about business dealings as possible. Rights-holders should have access to budgets, surveys, and other business practices to avoid mismanagement or misuse of RRO funds. Another is accountability. In addition to being represented on RRO boards, rights-holder organizations should be accountable to their members through elective and democratic processes.”

Given the lack of financial information that’s been provided to both the international board of directors and the membership, it’s hard for me to reach the conclusion that the Guild has been living up to these principles, and to have much confidence that we’ve been meeting the contract terms for usage of reprographic royalties.

For additional information, and some very stark and unflattering viewpoints on the Guild’s usage of reprographic royalties, here are a few links of interest.  The articles about the defamation lawsuit that the Guild brought against the IPA and Brad Holland have everything to do with how the Guild does or doesn’t use the royalty money, not to mention that the lawsuit is in its own right another very important subject that hasn’t been discussed much at the Guild.

Articles:

Animation World Network, August 24, 2010
Mind Your Business: Who is Keeping Your Royalties?
Mark Simon is as mad as hell about reprographic royalties.

Print Magazine / Imprint website
Illustration and the Law
Steven Heller, May 10, 2011
Interview with Brad Holland

Graphic Artists Guild Notice of Appeal (pdf)
April 28, 2011

Association of Medical Illustrators / Press Release:
Graphic Artists Guild Lawsuit Dismissed

Access Court Documents / Defamation Lawsuit.
eCourts / main page
(follow ‘WebCivil Supreme’ link; log in, then search for case index number 109149/2008)

Websites:

IFRRO

Copyright Clearance Center

Authors Coalition of America

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Let me wrap up by emphasizing one more time that if the Graphic Artists Guild is ever going to be a responsible advocate for artists and designers, and a good steward of the resources it’s entrusted with, there’s going to have to be a lot more sunlight around here, with many more members taking an interest in the governance of the Guild.

-Chris

A Big Question Mark.

(NOTE: Originally published Feb. 07, 2013, this post was re-edited for public display, Sept. 20, 2013.  The IAG is no longer my interest group at the NYC chapter of the Graphic Artists Guild, and I am no longer an officer, volunteer, or member of the Graphic Artists Guild.)

The following is why I’m of the opinion that a serious independent audit of the Guild’s finances is overdue.  A particularly stunning eye-opener in the LM-2 data is the amount of money listed under “Other Disbursements.”  Our 2011 LM-2 Annual Financial Report details expenses such as rent, employee salaries, copier leasing, newsletter design, printing, and etc.  There are, however, “Other Disbursements” entries found in the General Overhead, Union Administration, and Political Activities schedules, showing that in just 2011 alone, $217,000 was spent with no accompanying information whatsoever on payee or purpose.  That’s over one-quarter of all the money spent by the Guild in 2011.  I’m thinking that’s a lot of paper clips, coffee filters, or similar miscellaneous expenses that you’d expect might be categorized as “Other.”

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My graphic breakdown of the 2011 LM-2  will save you some time in bringing the whole picture into focus.

-Chris