SAG, AFTRA debate ratification of three-year pact

How much is enough?

That’s what 140,000 members of SAG and AFTRA will have to decide between now and the end of February in voting over whether to ratify a new three-year deal covering film and primetime TV.

As usual with actors, there’s bound to be contentiousness. The joint SAG-AFTRA committee voted 17-9 late Thursday to endorse the agreement, with eight of the nine no votes coming from the SAG side.

The overall deal contains more than $200 million in gains over the three-year period starting July 1, plus the prospect of no work stoppage. It’s the biggest gain ever for this contract and allays worries over a production slowdown — if it’s voted up.

Though union members are deemed likely to support the deal, it’s no certainty. The grumbling has already started that the union leaders didn’t battle hard enough because the tentative agreement includes no gains on the DVD side and contains the usual hikes of 3% annually in minimums and a concession on primetime series with no residuals for regulars on reruns of the first three episodes for a 60-day window.

SAG’s leaders, who insist they kept DVD on the table until the final hours of negotiations, believe that members aren’t willing to strike at this point for a variety of reasons:

  • Strikes usually occur due to a rollback; proponents contend that isn’t the case here.

  • Memories of the debilitating, six-month strike against the ad industry in 2000 are still vivid.

  • There’s a hostile climate toward unions with Republicans dominating in Washington, D.C.

  • The specter of the five-month supermarket strike of 2003-04 that ended badly for the strikers with a two-tier salary system haunts union members.

  • Ongoing economic uncertainty remains unsettling.

However, it’s worth noting that SAG’s Membership First faction scored major political gains in last fall’s Hollywood elections on a platform of a more assertiveness — including a big push for more DVD residuals. Membership First won 34 of 35 national and local seats; though supporters of SAG president Melissa Gilbert, who has always advocated a moderate, pragmatic course, still have a majority on the national board, the margin enjoyed by her “Restore Respect” camp has dwindled.

In the Thursday night press release lauding the deal, Gilbert and AFTRA prexy John Connolly even took the unusual step of launching preemptive attacks on the positions of opponents.

“We met the expected obstinacy from producers on DVDs and fought the issue until the very end,” she said. “But it would be neither wise nor responsible to pursue our only alternative — shutting the town down — and risk losing the historic gains we achieved.”

Writers and directors usually get about a nickel residual each from each $15 DVD, while actors split up about 15¢ per disc. But Connolly noted that actors have seen the amount of DVD residuals increase by 54% over the past three years.

“It would be irresponsible to force working actors to put their careers and families on the line through a work stoppage when we were able to negotiate a deal that makes so much sense for so many working performers,” he added. “We just picked up $200 million without a strike. That’s a victory.”

Gilbert also took a shot at the bitter 2000 strike against advertisers, which saw large gains in the fees paid for ads on cable. “Just a few years after a strike over the commercials contract, their approach would bring working actors to the brink of another work stoppage and recklessly gamble with the careers and lives of our working members,” she added.

Membership First had no official comment over the weekend, but proponents of the deal are prepped for a major showdown. Opponents haven’t yet indicated how hard they’ll battle in opposing the deal; the key indicator will come next Saturday at a joint SAG-AFTRA board meeting.

It’s a given that the deal will be approved at that point, triggering a ratification vote, but what’s not clear is whether a con statement will be sent out with the ratification ballots. If the no vote is over 25%, the 5-year-old SAG-AFTRA board policy allows the minority to send out a con report with the ballots.

The debate will likely center on the 20-year-old DVD formula. Thanks to soaring growth of the silver discs — now at $25 billion in sales and rentals — DVD was the key issue when the Writers Guild began its contract talks last year; neither the WGA or the DGA were able to break through on the issue as studios insisted that they can’t survive financially without DVD revenues.

The companies even argued during the negotiations that they would consider altering the DVD formula, which allows studios to exclude 80% of wholesale revenues, only if SAG and AFTRA agreed to revamp the residuals system so that they are paid out on a profit basis rather than a revenue basis. That notion’s problematic for the unions on two fronts: It’s much harder to track profits, and it would mean that actors wouldn’t see significant residuals from films unless they were hugely profitable — thanks to creative accounting invented by the studios.

In addition, the DVD issue has been even more of a hot-button for SAG due to chief exec Robert Pisano’s position as a member of the board of DVD rental outfit Netflix.

SAG members Scott Wilson and Tom Bower filed suit last year to unseat Pisano as chief negotiator; the guild’s national board found three times that there wasn’t a conflict, but SAG’s Hollywood board issued three votes of no confidence; a federal judge threw out the suit last month; Wilson and Bower appealed to the Ninth Circuit last week and promised to take the case to the U.S. Supreme Court if the appeal is turned down.

As such, opponents are likely to hammer away over the lack of gains in DVD residuals; the concession in the first three reruns in primetime TV; no advancement on made-for-basic cable; no change in the current practice of funding pension and health contributions from the actors cut of DVD residuals; and the fact that half the negotiating committee is composed of AFTRA reps, even though AFTRA generates only 5% of the earnings under the contract.

Except for the fall elections, SAG and AFTRA leaders were notably quiet in terms of prepping for the negotiations and did little to stir up members — unlike the WGA, which hammered away at the need to gain in DVD, reality TV and health care.

So aside from trumpeting the stability of a new deal, proponents are likely to tout gains in these areas:

  • The 9% raise over three years, worth approximately $144 million.

  • The “concession” on reruns, they’ll argue, is actually an as-yet-untried promotional strategy to get more dramas and sitcom series to survive on primetime, which has seen the hours for reality shows jump from eight to 20 per week.

The DGA and WGA agreed to a similar concession in their deals with the Alliance of Motion Picture & Television Producers last fall.

  • Increased residuals for the WB and UPN performers on one hour shows.

  • A 25% reduction in the number of video units — from 100,000 to 75,000 — that must be sold before residuals kick in made-for-pay TV programs.

  • Eight new background jobs (five for film and three for TV), bringing background jobs that must now be offered on a film to 50 and on a TV show to 20. Union officials believe this could add $20 million in annual earnings.

  • The rest period raised to 10 hours for stunt coordinators.

  • A 1% increase in contributions to the unions’ pension and health plans, worth $60 million over the life of the contract.

  • For series regulars who see their roles or series end, an agreement to develop a credit system that allows actors to “bank” eligibility credits while working that can later be used to maintain health coverage the year after their series gets canceled.

  • Choreographers can qualify for pension and health contributions; dancers will receive a 23% increase in hazard pay.

  • Producers agreed “to work toward” including performers with disabilities in the annual casting data report.

Should the deal be voted down, the unions and the AMPTP would have until June 30 to renegotiate a deal before the current contract runs out.

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