Screen Actors Guild and AFTRA leaders are leaning toward granting the ad industry a one-year extension of its commercials contract, which expires Oct. 29.
The ad industry asked for the extension late last year in order to perform a jointly funded study of changing revenue models, then announced March 15 that it was going to hire a “disinterested” consultant to perform the study even if SAG and the American Federation of Television & Radio Artists declined to participate.
The unions have declined to comment, but in a meeting this week, consensus among members of the SAG-AFTRA negotiating committee pointed toward agreeing to an extension and supporting the study. The key motivator in making such a deal would be to maintain the current residuals structure, which is under attack by the ad industry.
SAG’s national board is currently controlled by Membership First, which has campaigned on a platform of taking a tougher stance at negotiations. Guild president Alan Rosenberg also has joined in with the Writers Guild of America’s campaign against increased use of product placement without compensation for creative talent.
But the ad industry has been signaling it will take a hard line in upcoming negotiations. It’s been insisting that the current pay formula is outmoded in the wake of increasingly diversified delivery platforms such as iPods, cell phones, video-on-demand and embedded commercials.
“To attempt to fit all of that into the outmoded structure contained in the current contracts will lead to out-of-control costs and administrative burdens on the one hand and failure to account for all uses of a commercial on the other,” said Doug Wood, the industry’s lead negotiator, in the March 15 announcement.
SAG struck against the ad industry for six months in 2000, gaining a significant hike in cable rates and jurisdiction over ads shot for the Internet. The strike stopped only after the industry dropped its demand that network TV residuals be replaced by buyouts and SAG gave up its demand for cable residuals rather than buyouts.
In 2003, SAG and AFTRA agreed to the current deal, which included a hike in producer pension and health contributions to 14.3% from 13.3% and a gain of 7% over the three years in minimum fees.
Though SAG and AFTRA have equal representation on the negotiating committee, SAG actors currently generate about $750 million in commercial contract earnings annually that are subject to pension and health contributions while AFTRA members generate about $25 million annually under the contract.