Friday, December 19, 2008

SAG: When Will There be a Deal?

Lately, we’ve been lost in a morass of letters from SAG board members, stars and activists … wandering through a thicket of politics … reading the offer from the AMPTP (studios)… observing meetings in LA, NY and LA again … taking note of other developments … enjoying press releases … trying to parse the issues … and wondering if SAG will strike.

With all that, it’s easy to overlook the long-term question that should be on everyone’s mind: when will there be a deal? My answer: not until March 1 at the earliest; possibly as late as next fall; and, in the extreme case, SAG might go years without a contract.

Here’s the analysis, which depends on whether the strike authorization succeeds or fails (a question which I consider too close to call):

Scenario 1: The Strike Authorization Fails

The strike authorization ballots go out Jan. 2 and are due back three weeks later, Jan. 23. The national board then meets the next day. If the authorization fails, SAG President Alan Rosenberg has told me that the union will have to accept the offer on the table.

The Union Might Attempt to Negotiate

Given how adamant the SAG control group is (key members of Membership First plus National Executive Director Doug Allen), I’m guessing they would go back to the studios, take new media and DVD off the table if they are truly committed to making a deal, and try to make a few improvements to the deal. Whether or not they succeed, this process would take several weeks, given the glacial pace at which these negotiations have advanced. That takes us to the first week of February at the earliest.

Then the deal would have to be sent to the members for a vote. This is probably also a three week process. That takes us to roughly March 1. Then, if the deal is approved, we will have achieved a deal by March 1. So, under this best case scenario, a deal would be done by that date. BTW, this is well into pilot season, meaning that SAG will lose significant portions of pilot season to AFTRA. This die is already cast; SAG has almost certainly already passed the point of no return on this issue.

What if the deal is not approved? Then we enter a twilight zone: no strike and no deal. SAG would have to go back to management and attempt again to win some concessions, this time arguing that although the union can’t strike, it also can’t agree to the existing deal. This form of passive-aggressive leverage actually creates an incentive for the union to have the deal not be approved. The way the union might try to obtain this result is to send the deal out with a recommendation for a No vote, as opposed to sending it out without a recommendation (let alone doing so with a positive recommendation, which is unlikely, given the union leadership’s fierce opposition to a deal). In any case, if the deal is not approved, things could drag on. The negotiations would be hard fought and hence lengthy.

How Long Could Things Drag On?

Things could then drag on for quite some time. The SAG commercials contract expires March 31, and negotiations on this economically important contract will distract staff to some degree from negotiations over the theatrical and television contract. This date is unlikely to be extended, since the contract was already extended twice (from 2006 to 2008 and then from the end of October), and the JPC (representatives of the advertisers and advertising agencies) has said it will not agree to another extension. Also, this contract is being negotiated jointly with AFTRA (the process is actually going well so far), who would probably balk at an extension. Of course, an extension is always a possibility despite these factors.

In any case, if a deal is not made by sometime in June, then we enter another danger zone: the run-up to September’s SAG board elections. Nominating petitions are due in late July and campaigning lasts until balloting closes in late September (assuming the schedule is the same as it was this year). No one will want to make a deal during this period, for fear of losing electoral standing by being tarred with what the hardliners consider a bad deal. (Indeed, this proved to be a dead period this year.) Then the new board would probably have to meet before things restart. That means that negotiations would not resume until October. Who knows how long they will last. We might not see a deal until well into the fall or even later.

What happens to SAG if matters go this long? Again, who knows; this is a nightmare scenario. AFTRA will further cement its place in network television, ramping up for the 2010 pilot season (the already-impending 2009 pilot season is itself shaping up to be very AFTRA heavy). Union members might start going fi-core. Fractures in the union would deepen, and the union might even tear itself apart. The deal might get resubmitted to members, with little or no change. Some of this would probably depend on whether the September election prove an electoral bonanza for the moderate Unite for Strength faction or not.

Theoretically, the union might go years without a contract. After all, the contract (called a franchise agreement) between SAG and the talent agents expired in 2002, and has never been renewed. However, the contract with the studios is more critical to the union’s existence. Failure to achieve a contract over a period of many months might lead AFTRA to seek jurisdiction over digitally shot theatrical movies, despite their present position that they have no intention to do so. Whether or not that happens, failure to achieve a contract for such a long and indefinite period could effectively break the union. For that reason, one has to believe that cooler heads would ultimately prevail.

Scenario 2: The Strike Authorization Succeeds

If the strike authorization succeeds, the union will probably attempt to negotiate for a bit with the studios. That takes us to at least the first week of February. If SAG obtains what it wants from the studios, then we probably would see a deal by March 1 at the earliest, because of the three week voting period described above in “The Union Might Attempt to Negotiate.”

However, the studios are unlikely to agree to SAG’s demands; they’ve been quite firm in their refusal to break the new media template and reward SAG for its obstreperousness—and punish the unions that compromised to make a deal—by giving SAG provisions that were denied to those other unions (DGA, AFTRA, IATSE, as well as WGA). That would lead to a strike.

If the strike is relatively short, say three weeks, then we might see a deal towards the end of April. This timeline assumes the following: three week strike takes us to March 1; contentious negotiations take four weeks (it could easily be longer) but result in a deal (April 1); and three week authorization vote results in ratification (presumably), by approximately April 22.

However, I believe that if there is a strike, it will be long and bitter, given how dug in the parties are. Membership First has staked its future on getting a deal with new media provisions that the studios are equally determined not to accept. In addition, Nick Counter, who has been at the AMPTP for a quarter century and is rumored to want to retire, is probably unwilling to leave the organization with a SAG deal undone, or done on terms the studios consider odious. In any case, a long strike means there wouldn’t be a deal until next fall at the earliest, or perhaps much later. See “How Long Could Things Drag On?” above.

Whether the deal gets done in the fall, or even at all, depends on whether Membership First maintains effective control of the union, as they continue to have now, despite the moderates having won a narrow majority on the SAG national board. If MF holds or gains seats, they will probably continue the strike. If the moderates win solid control, they might at long last fire the National Executive Director, dissolve the negotiating committee, and end the strike.

A Few Other Notes

1. What if the union changes the NED and negotiating committee at some earlier point in the process; would that shorten any individual timeline? No, because it will take time to ramp up if these changes are made. A new chief negotiator would have to be appointed, and even if he or she is an existing guild staffer, there’s some ramp up time involved, even if short. Also, the national board would have to meet, dissolve the negotiating committee, and appoint a substitute negotiating committee, or more likely, a task force composed of some members of the board itself. This would take time too. So, these changes might result in a shorter option being pursued, but no such changes would result in a process before March 1.

2. The basic cable contract is up for negotiation at some point this year; I’m not sure when. This too will distract staff and further delay matters, if the negotiations take place. It’s more likely though that these would be deferred until after the main theatrical and television contract is negotiated.

3. Three months ago, I predicted no deal until January or February at the earliest. The schedule has obviously slipped.


A deal can’t be achieved before roughly March 1 at the earliest. If there’s a strike, we may be looking at next fall before there’s a deal. In a nightmare scenario, all bets are off. People will go fi-core, cross picket lines, and fracture the union, while the studios resume theatrical and television production with fi-core SAG members and AFTRA members (perhaps even theatrically).

In short, the union leadership is playing with fire by seeking a strike authorization. Members have already been burned with respect to the upcoming pilot season, as well as by loss to date of 3.5% fee increases. The leadership is risking permanent loss of those increases and loss of a synchronized expiration date in 2011 with the Writers Guild and AFTRA. In the extreme case, the current SAG leadership’s actions may end up breaking the union.

1 comment:

  1. I think your math is off in Scenario 1 -- because (under the old schedule) results were due on January 23, and you say that an attempt to negotiate would take "several weeks" (undoubtedly true), yet you then say that it only takes things up to the first week of February. That's only a single week, not several weeks.

    I think your first scenario is more likely to reach April 1 rather than March 1, when adding in the time necessary to obtain ratification.

    Now, of course, all bets are off, because the January 2 mailing was cancelled. I will be astonished if SAV ballots still go out after the new January 12th special meeting, but if so, it's going to take at least a few days to get revised materials printed and assembled for mailing -- so let's say the ballots go out, best case, on January 20th and are due in mid-February. If the SAV fails, add your "several weeks" and that takes things into mid-March. Getting a ratification vote will take another month, which goes to mid-April at the earliest.