SAG’s Allen blasts majors’ final offer

Move a sign that stalemate will last a long time

The SAG stalemate’s here to stay.

In a move that deflates hopes for a deal any time soon, Screen Actors Guild national exec director Doug Allen has blistered the majors’ final offer — despite the congloms’ repeated insistence that they won’t change the terms.

Allen’s message to members, sent Thursday and titled “It’s Not New Media — It’s NOW Media,” focused on SAG’s problems with the new-media portions of the deal and asserted that SAG must get a better deal than the DGA, WGA and AFTRA.

“The DGA and WGA represent writers and directors, not actors,” he added. “Their resolution of the new-media issues may work for them, but they don’t address your specific needs. The DGA and WGA agreed to allow producers to make new-media productions entirely non-union, at the producers’ option, for projects below budgets of $15,000 per minute (effectively, almost all new-media productions for the foreseeable future).”

Allen’s move comes a day after a singularly unproductive off-the-record meeting between SAG and the Alliance of Motion Pictures and Television Producers, with no future get-togethers set.

Allen said the missive had been sent to explain why SAG’s negotiating committee had not accepted the AMPTP’s June 30 offer.

“For one reason and one reason only: It’s not a good offer,” he said. “It doesn’t address enough of your priorities, particularly in new media.”

The AMPTP blasted back by noting that Allen’s ignoring the worsening economy over the past six months due to the credit crisis and energy prices. “Even in the midst of these severe economic problems for our country and industry, the AMPTP has made SAG a good and fair offer, with more than $250 million in increased compensation, groundbreaking new-media rights and pension and health protections that most Americans would envy,” the org said.

But Allen’s proclamation is a sign that SAG’s leaders believe they can still persuade the majors to sweeten the offer — even though SAG’s strike threat diminished after last week’s ratification of AFTRA’s primetime deal despite the guild’s avid “vote no” campaign.

SAG’s perceived leverage took a hit last week after the majors disclosed that the final offer contained a $10 million retroactivity provision — as long as SAG ratified the deal by Aug. 15. The $10 million will disappear with no guarantee that SAG would be able to get those funds back if it keeps stalling.

Allen did not mention the possibility of a strike in the message. An authorization vote has not been set and would require at least 75% approval of those voting — a questionable proposition.

Allen also insisted SAG wants a deal as soon as possible but asserted that the final offer hurts actors.

“No deal is better than a bad deal that allows non-union productions by our employers and snuffs out residuals for projects made for and rerun on new-media platforms,” he said. “We don’t need to experiment on the backs of actors. Our real world and practical experience has taught us how to provide union benefits and protections in low-budget productions.”

Allen acknowledged that the AMPTP’s current offer to SAG is nearly the same for new media as the deals that the DGA, WGA and AFTRA accepted.

“Some of you may be wondering why we don’t just agree to the template established by the other unions,” he said. “The template doesn’t protect actors, and while we may be the last union to come to the table, we still have the obligation to address the issues that are most important to you. We have had the extra time to effectively assess the impact of rapid technological and marketplace changes, and after careful analysis, we don’t believe the template works for SAG members.”

Allen asserted that in the six months since the DGA reached its pact, the landscape in digital media has “dramatically shifted,” with the congloms investing heavily to fast-track technology deals. He went on to say that union actors have to worry about competition from non-union actors, unlike directors and writers.

“It makes no sense for SAG to agree to allow the studios and networks to exacerbate our problem by giving them a pass to produce entirely non-union under a SAG union contract,” he added. “We are a union, and our mission and obligation to all of our members nationwide is to promote union jobs.”

Allen also complained that the AMPTP offer to SAG doesn’t include residuals for programs made for new media and streamed again on ad-supported new-media platforms — except if a program is made for and rerun on a pay platform like iTunes and the budget is more than $25,000 per minute.

For its part, the AMPTP noted that SAG contracts have allowed non-union Internet production since 2001. And it touted the improvements in its offer, including SAG jurisdiction over original new-media production, including low-budget programs that employ a single “covered actor”; residuals of 3.6% of distributor’s gross when original new-media productions are reused on pay platforms; increased pay and residuals if such programs are exhibited theatrically or on TV; first-ever residuals for ad-supported streaming, made-for-new-media programs and reuse of clips in new media; double the residual rate for permanent downloads; and jurisdiction over new-media programs derived from existing TV series.

“Not a single one of these rights exists under the contract that expired on June 30th — a contract that SAG members now must work under because of the failure of SAG negotiators to make a deal,” the AMPTP said.

Allen insisted SAG’s only seeking residuals on low-budget new-media programs if those generate revenues and said the AMPTP’s proposal could lead to the end of residuals.

“Management’s resistance is frustrating, but we have to be patient,” Allen said. “The stakes are too high to concede jurisdiction and residuals for programs made for new media. That future is now and, if we ignore it, it will pass actors by, and this generation and future generations of actors will never recover.”

The lack of resolution of SAG’s contract, which expired June 30, has slowed down but not stopped major feature production. TV production has been largely unaffected.

The go-slow strategy carries the another risk for SAG as it gives AFTRA the upper hand in signing new TV shows on digital, an area of shared jurisdiction. In addition, the AMPTP warned last week that should economic conditions worsen, the congloms may reduce the financial value of the deal.

Meanwhile, permitting agency FilmL.A. reported Thursday that second-quarter off-lot production rose 26% from the same period in 2007 — making it the busiest ever overall for on-location production in Los Angeles. And it said the boost was due to the aftermath of the 100-day WGA strike combined with stockpiling due to the uncertainty surrounding the SAG negotiations.

TV dramas increased 85% to 2,193 days, while reality rose 72% to 4,267. Pilots were up 24% to 380 days, while sitcoms gained 7% to 544.

“In a normal year, the second quarter is slow for television because many productions are out on hiatus,” noted FilmL.A. rep Todd Lindgren. “This year, in reaction to past and possible labor actions, production companies have skipped, shortened or shifted their breaks, and that has helped send our quarterly numbers skyward.”

Feature film production increased 9% to 2,746 days — the most active quarterly performance since the second quarter of 2001, when the figure hit 3,613 days amid worries over potential SAG and WGA strikes.

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