Monday, September 29, 2008

SAG Nudges the Studios, but the Studios Say No Thanks

SAG sent the studios a somewhat-gentle nudge today, firing off a letter to the head of the studio alliance and two key studio heads that identified three key issues (force majeure and two new media issues) and concluded with the almost-friendly "What do you say; when can our committees meet face-to-face?"

Not all of the letter was hale fellow well-met. A key sentence warns "If your intransigence continues, however, our choices become harder and fewer." Whether SAG actually has any leverage to back up those words is unclear. Certainly a strike authorization seems highly unlikely, with control of the union now having passed, in part, to more moderate elements, and with the shocking deterioration of the national economy making it unlikely that many guild members would support a strike.

That seems to be the studios' evaluation too, because several hours later, they sent out a "thanks but no thanks" letter. The heart of the brushoff is this: "We do not believe that it would be productive to resume negotiations at this time given SAG's continued insistence on terms which the Companies have repeatedly rejected."

They also sent slightly conflicting signals on their "Final Offer," saying first that they hope SAG "will accept our Final Offer while it remains on the table," but then saying that they "hope that our Final Offer can serve as the basis of an agreement." So is there any further room to negotiate? Probably, but not on new media, presumably.

And notice the ominous words "while it remains on the table." Are the studios really going to withdraw the offer? Probably not. The deteriorating economy might tempt them, but the reality is that withdrawing the offer -- or imposing its terms unilaterally -- would run the risk of galvanizing a strike vote. My prediction is that the studios are going to be very cautious about doing anything of the sort.

On the other side of the table, for all its saber rattling, SAG is unlikely to seek a strike authorization. The new national Board is unlikely to support one (and would be sharply divided at best), and SAG members too are unlikely to support a strike authorization while the news is filled with bank failures, tight credit, housing price erosion, still-high gas prices, and possible job loss.


Here's the SAG letter:

September 29, 2008

J. Nicholas Counter III
Association of Motion Picture and Television Producers
15301 Ventura Blvd.
Bldg. E
Sherman Oaks, CA 91403-5885

Peter Chernin
Fox Group
10201 W. Pico Blvd
Building 100 - Room 5080
Los Angeles, CA 90035

Robert Iger
President and CEO
The Walt Disney Company
500 S Buena Vista Street
Burbank, CA 91521-6369

Dear Gentlemen:

We believe it is clear that our members would fail to ratify your proposal of June 30, 2008. It would serve no productive purpose, therefore, to send our membership a proposal that SAG’s National Negotiating Committee and National Board have rejected and that our membership would not ratify.

It is our fervent hope that this news will encourage you and your colleagues to reengage in formal bargaining, with the exchange of proposals and compromise by both sides necessary to reach an agreement.

Our discussions with you and many of your colleagues since formal talks ended have educated both of our teams about our respective priorities and flexibilities. As we have said to SAG members, if we can reach agreement on three threshold issues, we believe we can finish these negotiations. One issue you brought to the table: force majeure protection for actors held by contract to a suspended production. Two issues we have identified as core principles: coverage for all new media productions (including those below $15,000/minute) and residuals for made-for new media productions re-used on new media. Other issues divide us, certainly, but we believe those other issues can be successfully addressed once we have resolved these three threshold issues. We have approached these contract negotiations reasonably and with a realistic and informed view of the state of the industry.

We are prepared to meet formally and continuously until we reach agreement. We owe it to our constituencies and the thousands of others in this industry that depend on a productive, stable and uninterrupted relationship between Screen Actors Guild and the networks and studios.

The alternative to reaching an agreement as soon as possible is unnecessary and destructive uncertainty. If your intransigence continues, however, our choices become harder and fewer. We would prefer the more complicated and productive choices that compromise will make necessary. But we can’t make those choices that lead to agreement working alone.

What do you say; when can our committees meet face-to-face?


Alan Rosenberg
National President

Doug Allen
National Executive Director and Chief Negotiator

Here's the AMPTP letter:

September 29, 2008

Alan Rosenberg
National President
Screen Actors Guild
5757 Wilshire Boulevard
Los Angeles, California 90036-3600

Doug Allen
National Executive Director
Screen Actors Guild
5757 Wilshire Boulevard
Los Angeles, California 90036-3600

Re: Screen Actors Guild Negotiations

Dear Alan and Doug:

This is in response to your letter dated September 29, 2008 to Peter Chernin, Robert Iger and me. Your letter indicates that the Screen Actors Guild is not prepared to change its position on any of the threshold issues in our negotiations. The Guild's position remains unchanged since we last met on July 16, 2008. Further, in addition to new media, there are a number of significant issues which, in and of themselves, prevent the parties from reaching agreement.

Our Final Offer to the Screen Actors Guild is comparable to our agreements with the Directors Guild of America, the Writers Guild of America and AFTRA. Our Final Offer memorializes a set of compromises, including in the area of new media, worked out with other Guilds and Unions and particularly addresses actor specific issues raised during the Screen Actors Guild negotiations.

We do not believe that it would be productive to resume negotiations at this time given SAG's continued insistence on terms which the Companies have repeatedly rejected.

In light of the unprecedented economic difficulties facing our industry and the nation, the Companies continue to hope that the Guild's leadership will recognize the five major labor agreements that have already been concluded this year and will accept our Final Offer while it remains on the table.

We want to reemphasize that we value greatly our industry's talent – the directors, writers, actors, and below-the-line people who create entertainment products for audiences around the world - and hope that our Final Offer can serve as the basis of an agreement.


J. Nicholas Counter III

cc: Peter Chernin, Bob Iger, AMPTP Board

1 comment:

  1. It is naive to think that SAG's New Media position will be accepted by the studios through negotiation. The studios have carefully "bricked and mortared" their template, with its non-union carve-out, in such a way as to make it difficult to depart from that formula. And they won't. It would mean that all their other deals with the other guilds would suddenly become untenable in this area.

    Moreover, the studios will continue to hold Force Majeure as a club so long as SAG holds onto its New Media position.

    If SAG drops its New Media position and goes along with the AFTRA pattern, the studios should -- if SAG handles it properly -- drop their Force Majeure rollback demand. Hopefully, in such a circumstance, the remaining issues can be hammered out.

    One additional thing that is crystal clear from this letter is that DVD residual increases are dead. Otherwise, that would have to be an issue mentioned as one of the "tentpoles."

    Allen has said that SAG needs to keep some issues open so that it has some negotiating room. Fine.

    But SAG is going to be stuck with the New Media framework, one way or another. How long are we going to pretend otherwise?