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Guilds Gear Up for Contract Talks With Producers

Actors are showing renewed fire. Writers have healthcare concerns and parity issues. But the tone of master film and TV contract negotiations with the industry’s top employers will be set by directors.

The Directors Guild of America will begin formal contract negotiations with the Alliance of Motion Picture and Television Producers on Dec. 5, more than six months before the current contract expires June 30.

Traditionally, the DGA goes first into AMPTP talks and sets the template for many of the terms in the other master union contracts, often to the chagrin of other guilds.

“The DGA has historically been the most accommodating of the three guilds, which is why the companies like to deal with it first,” says Howard Suber, professor emeritus at the UCLA School of Theater, Film, and Television, and a longtime observer of Hollywood labor.

It’s understood that the broad outlines of the DGA deal are already in place. The guild made a major advance three years ago in the digital arena, when the contract included wages, terms, and conditions for “high budget” dramatic new media productions for subscription video-on-demand.

The negotiations are expected to be concluded by the end of the month. Michael Apted and Thomas Schlamme head the DGA’s negotiating committee, with national exec director Jay Roth serving as lead negotiator.

For writers and actors, meanwhile, there is one big shared concern in this round of talks: Both need an increase in contributions from the studios to shore up their health and pension plans. Just as the onset of President Obama’s Affordable Care Act in 2010 imposed new requirements on the guild plans, Hollywood’s unions are seeking a hedge against the uncertainty of what may come with the repeal or major modification of Obamacare — changes that President-elect Donald Trump has pledged to enact.

The WGA contract expires May 1. The guild’s “Cadillac” health plans, known for generous benefits and lack of co-pay fees, are overextended at every level; a few catastrophic illnesses or premature births among the membership can drain resources.

Beyond the health plan, the WGA hopes to make progress on bringing residual fees for work for pay cable and basic cable reruns up to parity with broadcast fees. Broadcast residuals have historically been higher than pay cable and basic cable. But residuals from reruns are an endangered species. The major networks carry far more original programming, which means fewer repeats. That shift in programming strategy has cut deeply into the annual income of workaday TV writers.

“The DGA has historically been the most accommodating of the three guilds, which is why the companies like to deal with it first.”
Howard Suber, UCLA

Basic and pay cable TV outlets serve up more reruns, though the boom in original series has cut into the demand for library fare. Residual fees are calculated on a sliding scale depending on the number of runs and the age of the program. With cable’s lower rates, fees for reruns can be paltry. Securing parity with broadcast rates is probably unrealistic, but the WGA will likely push for gains.

The WGA West told its 8,000 members in May that it planned to seek a bigger cut of what it described as $49 billion in 2015 profits from the top six media conglomerates. But the big growth arena for TV reuse — digital streaming — is not expected to be part of the discussion. The health-plan needs put WGA and SAG-AFTRA in a tough spot for pressing hard on an issue the studios are loath to address; that lack of leverage is another reason the WGA is looking to cable/pay TV parity as a more achievable goal.

No alarms have been heard about a writers strike, given the robust activity in the TV sector.  “I’d be very surprised if there’s a strike because those occur when people feel they have nothing left to lose,” says Suber.

The WGA’s 100-day strike in 2007-08 did result in writers receiving a payment on the distributors’ gross for digital distribution, but at the cost of writers losing production deals during the work stoppage as companies embraced reality TV. “The unintended consequences of the strike will make it difficult to mobilize for a work stoppage, particularly among older writers,” Suber notes.

Such concerns haven’t stopped the actors. The master contract talks come against the backdrop of SAG-AFTRA mobilizing its first strike in 16 years. (It’s also the first work stoppage in the decade since the WGA strike.)

The actors have been out since Oct. 21 against 11 video-game companies that are covered by a contract separate from the larger pact for film and TV work. But SAG-AFTRA members in L.A. have shown a new appetite for activism under national president Gabrielle Carteris. The strike has generated three respectably sized picket lines as the union pushes for securing residuals for voice actors.

SAG-AFTRA’s AMPTP contract expires June 30. The guild is going into its second master contract negotiation as it prepares to complete the merger of the SAG and AFTRA health plans in January. That process has taken nearly five years: The SAG-AFTRA combination was approved by a membership vote in 2012. Since then, officials have had to sort through differences in eligibility and income-threshold requirements for the various categories of both guilds’ memberships. Now that the plans are to be joined, the funding needs are significant because more members will qualify. The talks with the studios could be the first real test of the clout the two guilds sought to gain by merging.

The SAG-AFTRA merger was successfully completed, after two previous attempts, under the leadership of national president Ken Howard, who died in March. Howard was assiduously nonconfrontational with employers. Carteris, on the other hand, has been an active presence on the picket lines. That makes her an unpredictable commodity for AMPTP president Carol Lombardini and the studios’ other negotiators.

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