Monday, June 30, 2008

AMPTP Makes Final Offer to SAG

The AMPTP just made a final offer to SAG. I'm advised by a AMPTP spokesman that this offer tracks the AFTRA and DGA/WGA deals in terms of minimums, new media, and other provisions. On force majeure (an actors-only issue), the AMPTP offer holds to the AMPTP's previous position that the existing contract language should be revised.

The AMPTP spokesman confirms that this is a "last, best, and final offer" in legal terms. Such an offer would allow the AMPTP to impose the offer's terms once the SAG agreement expires tonight. However, as the AMPTP press release says, "As SAG's leadership considers our final offer, we will continue for now to work under the terms of the old contract as current productions wind down."

The AMPTP has offered to meet with SAG on Wednesday afternoon to explain the offer, but states that it will not entertain counter-offers.

Friday, June 27, 2008

Marxism in Hollywood

Another day, another denunciation. It's hard to know what the SAG Hollywood leadership is thinking. They’ve deployed robocalls, trade ads, emails, and more, in a misguided effort to defeat the AFTRA deal. Success is unlikely, but in any case, the result will probably be continued labor paralysis, not progress. After all, AFTRA is not going to strike, nor negotiate jointly with SAG, no matter what the outcome of the ratification vote.

For its part, SAG’s also unlikely to strike, since a 75% affirmative vote is required for strike authorization. What's more, we're nowhere near a strike, since the balloting process would apparently take three weeks, and hasn't even been initiated. The guild’s own New York, Chicago and San Francisco branches won’t support a strike – and have criticized the anti-AFTRA strategy – and even SAG’s allies at the WGA have been largely silent.

Meanwhile, the guild’s negotiations with the studios drag on interminably, with little evident progress. The contract expires Monday night, but that doesn’t seem to have heightened the urgency particularly. It's hard to tell whether SAG even has a strategy, or is simply stuck in a morass of overpromised goals and anti-AFTRA animus, mixed in with valid points (force majeure, clip minimums, some aspects of product integration) that might be more achievable were there a greater sense of realism in the rhetoric and tactics.

As we undergo a second Hollywood labor stoppage in less than a year, some explanation, although little comfort, is provided by Karl Marx, once considered a patron saint of the labor movement. Expanding on a remark by Hegel, Marx posited that history repeats itself: the first time as tragedy, the second as farce. This year seems proof of that. One can only hope that twice is the limit, since the SAG commercials contract expires this fall, in case you’d mistakenly thought we were anywhere near done with labor unrest.

Of course, when it comes to legal analysis, Karl is not the most authoritative Marx in a capitalist society. For that – and particularly in Hollywood – we turn to Groucho and Chico. In 1935’s A Night at the Opera, Groucho describes a contract provision that he refers to as a “sanity clause.” Chico is unpersuaded: “You can't fool me,” he says, “there ain't no Sanity Claus.”

If only there were. Rationality has been in short supply the last twelve months. The Writers Guild and the studios both seemed hell-bent on a strike, and outside voices did little to deter or shorten the experience. A federal mediator had no effect, and even the head of CAA was unable to broker a deal. Only a confluence of circumstances – including the impending destruction of the Oscars – was enough to end the stalemate. Nothing like a busted awards ceremony to get Hollywood’s attention.

Unfortunately, no obvious or immediate deadlines loom this time. Now, as then, some have called on the Governor to intervene, and his experience as both a Terminator and a kindergarten cop would make him well-suited to the task. But there’s little upside, and plenty of risk, to the governor in getting involved in a parochial Hollywood dispute, no matter the economic impact. Instead, we seem destined to a war of attrition, as SAG, AFTRA and the studios all jockey for advantage with feature production stalled and television work uncertain. Stay tuned – if you can stand it.

Wednesday, June 18, 2008

Curtain Call

“We are not done yet!” shouted Screen Actors Guild leader Doug Allen three times at the guild’s anti-AFTRA rally last week. Evidently not, but Hollywood is beyond well-done and beginning to burn. It’s time for SAG to put its full efforts into crafting the best deal it can get, rather than try to derail the AFTRA primetime deal.

Why? Several reasons. For one thing, attempting to defeat the AFTRA deal is a futile exercise. The members of AFTRA – the American Federation of Television and Radio Artists, SAG’s smaller rival – approved a similar daytime deal by an affirmative vote of 93% of those voting. It’s almost impossible to believe that SAG can cut that percentage to 49% – i.e., virtually in half – which is what would be necessary to nullify the deal.

For another thing, even if the incredible were to happen, SAG’s stated goal of persuading AFTRA to then return to the bargaining table jointly with SAG is Pollyannaish. There’s little but bad blood between the unions at this point. Indeed, given that SAG and AFTRA are both headquartered in the same office building, it’s hard to imagine what shared elevator rides must be like. Do people retreat to opposite corners like cold-war prizefighters, or do they simply turn their backs on each other?

The other reason that SAG’s mission in quixotic at best is that some (though not all) of the positions it’s taking are just non-starters. For instance, on clip consent – the issue of whether actors should have the right to veto studios’ online use of excerpts from movie and TV shows – SAG is taking positions at odds with the AFTRA deal and even with what SAG itself apparently originally proposed. That’s a quick road to nowhere.

Another example: SAG is seeking revisions in the new media template already enshrined in the Directors Guild, WGA, AFTRA daytime, and AFTRA primetime deals. That’s largely an uphill battle. SAG’s also not going to get any improvement in the DVD residual, no matter how fair such an increase may be (and I do think an increase would be fair). That’s another pointless venture: None of those four earlier deals contains a DVD increase, and it’s a fair bet that IATSE (representing technical and craft workers) won’t be looking for one either when it recommences its negotiations.

That makes five other contracts that don’t or won’t have an increase. With SAG in last position among the above the line unions (i.e., all but IATSE), it has virtually no leverage to revise the 24 year-old deal that established what the WGA called “the hated DVD formula.” Ironically, SAG put itself in this position. It could have negotiated jointly with AFTRA were it not for a series of decisions that angered the smaller union and gave it an excuse to sever a 1981 joint bargaining agreement. And even after that arrangement collapsed, SAG could have had an extended period of negotiations prior to AFTRA entering the field, had the guild not refused for weeks to set a date to start negotiations. AFTRA’s, and management’s, reactions should have been easy to predict. SAG overplayed a weak hand, allowing management to play one union off against the other, and now the guild finds itself buried under a landslide of precedent.

That’s unfortunate, because the probable result is that SAG will still be sidelined in negotiations – or maybe on the picket lines – while AFTRA begins signing up new TV shows starting sometime after July 7, the date that ratification ballots are due back from the membership. No doubt the smaller union will be vigorous in seeking new signatories and enlarging its reach. After all, AFTRA didn’t negotiate its deal simply to put it up on a shelf and admire it. A weakened SAG will be the consequence. Already, SAG’s own leadership is bitterly divided on tactics and on the inter-union rivalry.

More regrettable is what SAG’s maneuvers are doing to the industry. Feature production is already down significantly, and that trend will only get worse once the SAG deal expires. Whether or not SAG strikes, the town will enter a near-complete work stoppage come June 30. That’s a blow the battered industry and depressed local economy can ill-afford. Let’s be done with labor negotiations, at least until the guild’s commercials contract comes up for renewal this fall, when new media will once again be likely to present difficult challenges and frustrate all concerned. It’s time for SAG to finish its scene, take a graceful bow, and depart the stage.

Tuesday, June 10, 2008

Quarterlife Less Than One Percent Life

We already knew that the underperforming Quarterlife didn't get a quarter of anything on NBC, but here's how poorly it performed online: of Myspace's 140 million members, there were only 140,000 views of the show, per creator Marshall Herskovitz, speaking yesterday at iHollywood Forum's Digital Media Summit in LA.

That number's only a tenth of 1% of the Myspace membership - and even that may be an overestimate of the number of viewers, since the 140,000 refers to viewings of the show, not viewers, if I understood Herskovitz properly. Since the show online was actually many segments, the number of of viewers is probably far smaller.

Maybe the show didn't get enough ad support to drive viewers? Nope. According to Herskovitz, the show was supported by a hefty one billion ad impressions.

Herskovitz opened the kimono on a few more details: The producers didn't make much from Myspace, not surprisingly. The biggest online advertiser was Toyota, which paid $500,000 for advertising. (Not clear to me if all that money went to the producers, or if Myspace got a piece.) Another significant source of revenue was a product integration deal with a music website that Pepsi had invested in.

Thursday, June 5, 2008

SAG Shreds AFTRA's Contract

Variety and the Hollywood Reporter are reporting that SAG chief Alan Rosenberg, National Exec Director Doug Allan, and the activist Membership First faction are pushing to have SAG come out against the AFTRA deal and urge dual cardholders (members of both unions) to vote against the deal.

What a mess. If the unions had merged -- or continued to bargain jointly under the Phase 1 arrangement -- we wouldn't have this turmoil. SAG hasn't made a terribly convincing case that the AFTRA deal is so subpar that it deserves to be rejected, although certainly we can hope that SAG would achieve progress on compensation for product integration, an area in which AFTRA achieved nothing.

We'll listen closely to whatever rationale SAG offers, but it's hard to believe that any deficiencies in the AFTRA deal are so bad as to warrant rejection -- all deals are compromises -- let alone a strike or other type of work stoppage. The industry has been battered and bruised too much this year, and walking off a cliff is only going to hurt everyone in the long run, or even the short run.

With One Union Already Done, SAG Auditions for an Actors Deal

One actors union has just done its deal with the studios, and now its larger rival, the Screen Actors Guild, is back at the bargaining table. Is a SAG deal imminent? Not likely. Instead, we may be sliding toward another Hollywood work stoppage.

The signs aren’t good. Already, SAG has given a chilly response to the deal reached last week by the American Federation of Television & Radio Artists. A key source of contention is clip consent, the issue of whether studios need an actor’s permission in order to make short excerpts of movies and TV shows available online or via cell phones. SAG wants to preserve actors’ control over their own images, but the veto right SAG seeks is unrealistic in an era of Internet piracy, fan sites, mash-ups and morphing. Understandably, AFTRA all but passed on the issue, although the union’s spin might suggest otherwise.

SAG is also unhappy that AFTRA didn’t achieve increases in home video residuals, the reuse fees that actors receive when DVDs are sold. But AFTRA’s not alone. In their most recent deals, the writers didn’t achieve those increases either, and the directors apparently didn’t even raise the issue. It’s not easy to renegotiate a 24-year-old formula. SAG is right – the fees are unfairly low – but with no leverage left, the guild will have to abandon the issue sooner or later. Better to do so sooner and move the negotiations forward.

New media is another big issue. The AFTRA deal follows the template set by the directors and writers. SAG’s not happy with that either, but it’s unreasonable to expect significant changes to what’s become an industry-wide standard. Yet another key issue is product integration – scenes in movies or TV shows in which a character extols the virtues of a particular product. SAG wants compensation for these embedded commercials, and wants a veto right over them as well. A veto is not practical – studios need the fees that product manufacturers pay – but compensation is eminently reasonable. AFTRA achieved neither a veto nor compensation.

The AFTRA deal sounds like all sour and no sweet, but that’s not quite true. In particular, the new agreement increases minimum compensation levels by a healthy margin. That benefits middle-class actors, a key goal for SAG.

What now? True leadership means knowing which cards to hold and which to fold. SAG should focus on obtaining compensation for product integration – and the studios should give on this issue – but the guild will have to pass on the other major items. There’s a tough lesson here for SAG: by pushing too hard in an inter-union rivalry, the guild gave its smaller competitor an excuse to bargain separately with the studios for the first time in 27 years. That allowed management to play one union off against the other, and actors pay the price.

Unfortunately, SAG seems unyielding, and its leadership appears convinced that bargaining down to the wire is the best strategy. The SAG contract expires June 30, but the AFTRA deal will probably be ratified by union membership just days before that, creating additional pressure on SAG in the bargaining room. And, once the deal is approved, AFTRA will start signing up new television shows while SAG is still sidelined in negotiations. Yet even that may not be enough to convince SAG to close a deal quickly. Management, in turn, is unlikely to compromise much on issues already negotiated with AFTRA.

This may sound like a recipe for a strike, but it’s not. That’s because SAG rules require a 75 percent membership vote to authorize a strike, a potentially difficult threshold to meet. SAG leadership probably won’t even seek the authorization, in part for that reason, and also because the New York and regional factions of SAG leadership don’t even want a strike at all. (Those non-Hollywood factions are more aligned ideologically with AFTRA than with SAG’s dominant Hollywood leadership.)

No strike, yet no deal, means SAG might offer to continue working under the expired contract. Management is unlikely to agree, for fear that SAG could walk out while expensive movies or TV series are in the middle of production. Instead, the studios will probably choose not resume production of feature films, or of nighttime TV shows other than those few covered by AFTRA. (Daytime shows are covered by a separate AFTRA agreement, on which a deal was reached two months ago.)

A work stoppage at management’s election is a lockout, not a strike, but the effect is much the same: an industry idled – for the second time in less than a year – and another blow to the local economy, already made soft by subprime shenanigans. Los Angeles can ill afford the hit, especially in the face of competition from the non-unionized entrepreneurs in Silicon Valley. Actors are known to ask “What’s my character’s motivation?” when studying a new script. Let’s hope avoiding another work stoppage is motivation enough for both SAG and the studios.