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Burton Turkus was an attorney, an author, and most influentially to our industry, an arbitrator.
Waaaay back in the days of the original Promises, Promises, in April of 1963 to be exact, Mr. Turkus presided over an arbitration between, well, just about every theatrical union, and the then named, League of New York Theatres.
Here's what went down 50 years ago . . .
There was a 13-day strike in 1960 known as the "Broadway Blackout" which was the result of the failure of Actors' Equity and The League to come to terms on a new agreement. The biggest outstanding issue? The creation of a brand new pension fund for the Actors.
The Actors got their pension fund as a result of the walkout. As part of the agreement, they graciously agreed to help The League lobby the City of New York for the removal of the 5% Admissions Tax that was levied on all theater tickets at the time.
The theory was . . . if they could get rid of this 5% tax, they could use that 5% to pay pensions to all the unions. The league would be happy because they wouldn't be paying any more than they already were. And the unions would be happy, too, because they would all get pensions. Happy-happy, joy-joy!
Well, it wasn't so easy.
The two sides were successful in getting the City to do away with the tax on tickets (!) . . . but there was a disagreement in how much of that 5% should go to AEA, and, consequently, how much of the remaining amounts should be distributed to the other eight unions involved.
Make sense?
Simplified: The 5% tax went away. So they had a pot of 5%. But how to whack it up?
Enter the esteemed Mr. Turkus, who, in the "Burton Turkus Award of 1963" (as it is affectionately referred), created a system for determining who got what.
First, the actual net "tax relief" that we ended up with after the repeal was a net of 4.5%, not 5%, or "the 045" (as it is also affectionately referred).
Next, in order to distribute the funds accordingly, BT examined the books of Broadway shows to determine what percentage of gross payrolls was attributed to the actors, what was attributed to the musicians, the stagehands, and so on. These percentages make up the guts of the "Award".
A complex chart was created which awarded different percentages of "the 045" to the various unions, depending on a few factors, like whether it was a play or a musical, and even how many musicians a show had.
Confused yet?
Let me use a specific example, using modern day numbers:
A production grosses $1,000,000 for a week.
4.5% or .045 of $1,000,000 is $45,000.
$45,000 is then allocated towards the pension of our various unions.
In a musical with over 16 musicians, The BT Award allocates Actors' Equity 50% of the $45,000 or $22,500. Local One gets 15% or $6,750. Local 751, the Treasurers, got 1.88% or $846.00 and so on, until the entire $45,000 is distributed.
This happens every week on Broadway to this day!
Now, IF on your show, your 045 monies don't pay for pension that you are responsible for, you still have to make up the difference (if the Treasurers actual pension on the salaries was supposed to be $1000, then you got billed another $154). The .045 only contributes towards the pension due, but it doesn't necessarily cover all of the pension due.
Why is this history lesson relevant?
The wise Mr. Turkus, who ended one of the most bitter disputes our industry has seen, and is known as a hero in certain circles, created this chart using the payroll allocation formulas that were in front of him at the time . . . that are now almost 50 years old.
Back then, the Actors made up the bulk of the payroll, which is why they got the bulk of the 045. Things have shifted just a teensy bit over the years, and salaries for some of the other unions have increased dramatically . . . which has thrown the whole 045 off its axis.
It's very common now that the amount due to Actors' Equity greatly exceeds that amount that is actually due. So you could "overpay" by thousands of dollars . . . and the 045 ain't a Discover card. There's no cash back.
At the same time, shows can often have a "deficiency" to Local 1, meaning that their 045 contribution fails to pay for the entire pension due, which then means that the show has to make up the difference.
So, while you're overpaying to one union, you're underpaying to another, and you cannot apply the overpayment from one to the other. You gotta make good on the underpayment, and the overpayment stays with the union. (I remember Show Boat having a million-dollar overage at one time!)
Now, Actors' Equity, recognized the issue over the years and created opportunities for Producers to use their "overages" on National Tours of a show after they play on Broadway . They've even used that overage for a reduction to their health payments at one time.
And that's all good . . . but I don't think it's enough.
I've got another idea.
It's time for a Burton Turkus, Jr. to come in, toss out the archaic old formulas and come up with something new. And maybe this one can also handle the annuities that shows also pay to the unions.
I know, I know, the unions that are getting the overages aren't going to take to this very well. (I think my phone has started ringing already) Why would they? I wouldn't want to . . .
But it is the right thing to do.
With all due respect to the great Mr. T, the 045 has to be readjusted, reconfigured, or simply trashed sooner or later. These aren't the days of the original Promises, Promises anymore. Our economics are vastly different now, and we can't rely on economic formulas designed in the days when a brand new Ford Mustang cost $2,495.
Mr. Turkus deserves to be in the Broadway Hall of Fame. But his Award needs to be retired.
If you would like to read the actual Burton Turkus decision from 1963 (it's quite fascinating) and see the percentage distribution charts, click here.
