Dueling Press Releases

[Note - I have revised this post in a few places based on information provided by the AMPTP and SAG after the original post appeared. This is indicated by "REVISED".]

Last night saw an extensive press release by the AMPTP reacting to various statements by SAG over the last few weeks, followed by a short release from SAG responding to some of the AMPTP’s points. Who’s right? Here’s the language from the two releases and my analysis, interleaved so that you can see what items respond to what. Note that the AMPTP press release cites (in paraphrase) various SAG statements. To avoid confusion, I’ve used boldface to sort out who is speaking – AMPTP, SAG, or me (JLH).

AMPTP press release:

July 28, 2008 Hollywood Reporter – Doug Allen

SAG Statement: The problem is they're asking us to accept a deal that doesn't have the minimum standards necessary to protect actors and has negative consequences that could last for decades and really affect the professional actor in maintaining their lives and families without having a second or third job.

The Facts:

* While SAG members currently have almost no new media production rights, the Producers’ new media framework grants SAG shared jurisdiction with AFTRA over original new media programs, including low-budget projects that employ a single “covered actor.”

SAG response:

The AMPTP’s statement on their proposal for “covered” performers completely misses the point. For any original production that is made for new media at a budget threshold of less than $15,000 per minute, the producer would have the right to make that production without ANY covered performers if they so choose. That means that the producers would have the right, under our SAG contract, to produce non-union simply by not hiring covered performers. Further, it is possible that some SAG members could be categorized as "non covered" performers.

JLH analysis: Both sides are correct. They disagree on the appropriateness of the carveout (and also the effect, as is clear from other statements each side has made). However – and here SAG is missing a point – when new media starts to generate significant revenues, and becomes readily viewable on living room TV sets, budgets are likely to rise dramatically, just as they did for video games as that medium became popular. The studios, of course, will try to raise the thresholds next time the union contracts are negotiated, in three years, so this will probably continue to be a point of contention.

AMPTP press release:

* All of the new media terms in the Producers’ final offer, including those related to original new media programs, are subject to a sunset clause that protects both performers and Producers by allowing the two sides to reevaluate all of the new media terms in three years and bargain from a point of greater knowledge about the market’s development.

SAG response:

The sunset clause provides no guarantee that provisions in the agreement being negotiated that end up harming actors will be excluded from the next contract. Any such harmful provisions would have to be bargained out. If management likes how they work, they will fiercely resist excluding them from future contracts.

JLH analysis: SAG is correct. Moreover, the sunset clause is a meaningless fig leaf, as I have blogged since the concept was first touted, in the DGA deal. That’s because the entire contract expires every three years, so to add a sunset clause that says the new media provisions expire in three years is to state the obvious and add little of substance.

AMPTP press release:

SAG’s July 17 Message to Members

SAG Statement: It makes no sense for SAG to agree to allow the studios and networks to exacerbate our problem by giving them a pass to produce entirely non-union under a SAG union contract.

The Facts:

* Since 2001, the Producers have been unrestricted in producing derivative and nonderivative new media projects non-union under Sideletter 21 of the SAG Basic Agreement and Sideletter H of the SAG TV Agreement. The Producers currently have the right to produce union or non-union. For seven years, the SAG collective bargaining agreement has given Producers the right to do just what SAG now claims is unacceptable.

* The Producers’ proposal grants greater rights to SAG by significantly restricting the Producers’ ability to produce new media programs non-SAG.

SAG response:

We have jurisdiction under the current contract. The AMPTP Producers are contractually obligated to give SAG 60 days notice of their intention to produce a program made for the Internet. After notice is given, the producer may either produce programs made for the Internet under the terms of the existing collective bargaining agreement, or they may tender a letter of adherence to cover such a program with terms negotiated with SAG as provided in the sideletter.

JLH analysis: [REVISED:] The existing sideletters to the SAG agreement are ambiguous on what happens if a producer chooses not to sign a letter of adherence. The AMPTP contends that the producer would then be free to shoot non-union, whereas SAG contends that the producer would then be bound by the entire SAG agreement. It’s not clear which side is right, but it also doesn’t really matter once a new contract is agreed on (if and when that happens), since the sideletters will be replaced by the new media language now under negotiation.

AMPTP press release:

* All original new media programs employing a single “covered actor” would be automatically covered under the SAG agreement. This represents a significant concession on the part of the Producers.

SAG response: Discussed above.

JLH analysis: Discussed above.

AMPTP press release:

* Only low budget productions that do not employ a SAG “covered actor” would be outside the scope of contract coverage. This is intended to allow Producers to effectively compete and experiment with low budget original new media without being priced out of the market by expensive and restrictive contract terms.

SAG response: No specific response to the second sentence.

JLH analysis: The first sentence of the AMPTP release is correct. As to the second sentence, I agree with the AMPTP position. In a world of UGC (user generated content) and non-union content from all over the world available to anyone, instantly, companies do need the flexibility to experiment. SAG’s position, as they’ve previously stated it, is that this flexibility could or would lead to much or most new media content going non-union. The concern is real, though I think somewhat overstated, since budget levels will rise, bringing more production into the union fold, as new media content becomes more professional. This disagreement reflects a fundamental conflict between the goals of unions and management.

AMPTP press release:

SAG Statement: The DGA and WGA agreed to allow producers to make new media productions entirely non-union, at the producers’ option, for projects below budgets of $15,000 per minute (effectively, almost all new media productions for the foreseeable future.)

The Facts:

* Those new WGA and DGA contracts extend union jurisdiction to new media productions budgeted below $15,000 per minute whenever a qualifying member, e.g. a ‘professional writer,’ is employed. The proposal to SAG does the same thing so that whenever a “covered actor” is employed, the production is also covered.

SAG response: None.

JLH analysis: The AMPTP is correct. Note that they (and SAG, elsewhere) are shorthanding the threshold: the $15,000 figure is actually just one of three dollar thresholds. See Guild Agreement New Media Thresholds.

AMPTP press release:

* The definition of “covered actor” is broad enough to capture most professional actors (those with two TV or film credits, a national commercial, work on an audio book). These provisions also ensure union coverage for all actors, union or otherwise, if a single “covered actor” is employed.

SAG response: None.

JLH analysis: The AMPTP is correct. BTW, the definition is even broader than they state: it also includes stage actors who have professionally-produced credits (Broadway, national touring companies, etc.).

AMPTP press release:

SAG Statement: AMPTP’s recent offer to SAG doesn’t include residuals for programs made for new media and streamed again on ad-supported new media platforms.

The Facts:

* The Producers’ final offer includes residuals for both ad-supported and consumer pay reuse of new media programs derived from existing SAG television series. The Producers have proposed a more limited residual payment for original new media programs.

SAG response:

If an original made for new media production is streamed on new media, the budget is irrelevant because no residuals will be paid. There is one single exception for original new media productions that are produced for $25,000 per minute or more and distributed on a consumer pay platform for sale or rent (like iTunes). This is a highly unlikely and improbable circumstance. SAG has signed more than 500 producers to contracts for original new media productions. The average budget range has been $2,000 per minute.

JLH analysis: SAG is correct. Their description of the proposal is accurate – so far as we know from both sides’ press releases and from the disclosed language of the WGA and AFTRA daytime deals. Also, not the squishy language used by the AMPTP: “a more limited residual payment.” SAG is also essentially correct regarding budget levels: the actual figures I’ve heard are $2,000 to $5,000 per minute, with very occasional programming at $10,000 per minute. All of those figures are obviously way below $25,000 per minute, a figure that we’re unlikely to reach until in the next few years. However, when new media budgets rise (see my comment several paragraphs above), the $25,000 threshold may not be so distant.

AMPTP press release:

* The Producers are unwilling to agree to the residual structure suggested by SAG for original new media programs because current economics indicate that the Producers are unlikely to even recover their production costs.

SAG response: None.

JLH analysis: Hard to know without access to the studies.

AMPTP press release:

* For the same reason, under the new media terms offered to SAG and accepted by the WGA, DGA and AFTRA, original new media programs budgeted at or above $25,000 per minute as exhibited generate residuals at 3.6% of distributor’s gross on consumer pay platforms such as paid streaming or download-to-own.

SAG response: None.

JLH analysis: True. (The WGA and DGA figures are actually 1.2%, whereas the actor formulas are 3.6%, but this is because there is customarily a 3 to 1 ratio in the figures for certain types of residuals, a structure that reflects the fact that there are more actors on a movie or TV show than there are writers or directors/ADs/UPMs.)

AMPTP press release:

SAG Statement: The template doesn’t protect actors … we don’t believe the template works for SAG members.

The Facts:

* The 33 pages of new media rights and residuals laid out in the AMPTP’s final offer give SAG members numerous terms that have never previously existed in the SAG contract.

* Until SAG’s negotiators secure a new contract, its members will continue to work under the expired terms, which include little in the way of new media residuals or jurisdiction.

* The Producers’ final offer would immediately give performers their first-ever residuals for ad-supported streaming and made for new media programs while doubling the rate that has been paid for permanent downloads. SAG members deserve to share in the same new media revenue that the other Guild members are already getting – and nothing short of a new contract will allow that to happen.

SAG response:

We have tentatively agreed to most of the AMPTP’s new media “template”. The few AMPTP new media proposals with which we disagree are extremely important core areas like coverage and residuals for made for new media productions re-used on new media. That is clearly the direction the industry is headed and at a much faster pace than anyone could have imagined just 7 months ago. Management has been extremely rigid. They are not bargaining, but rather are simply demanding that we agree to the new media “template” without modification.

JLH analysis: The studios are right, but their answer doesn’t respond to the point that SAG’s making, which is that, in SAG’s opinion, what works for writers and directors doesn’t altogether work for actors. The AMPTP might have added that AFTRA disagrees, but this would just have thrown fuel on the fire. I disagree with SAG on some of its points, as discussed above, but the larger difficulty for SAG is that the union has little or no leverage. (Also, btw, the claim that things are happening “at a much faster pace than anyone could have imagined just 7 months ago” is hyperbolic.)

AMPTP press release:

SAG’s July 28 Message to Members

SAG Statement: This does not mean that new media is our only focus. We know that you are also concerned about such bargaining priorities as product integration, force majeure, background actors’ issues and mileage. We will be communicating with you in more depth on these and other bargaining priorities in the coming days.

The Facts:

* SAG members continue to work under an expired contract for one simple reason: SAG’s negotiators are holding on several exceedingly expensive and unacceptable proposals that the Producers have rejected since these talks began over three months ago.

* SAG’s negotiators have sought to focus attention on one narrow dispute in new media, while failing to mention that proposals such as a DVD residual increase remain on the table.

SAG response: None.

JLH analysis: The AMPTP is correct regarding its reference to DVD residuals. SAG has slowly begun to downplay this point though, and I expect that it will eventually be abandoned.

AMPTP press release:

* The Producers’ final offer includes significant gains in minimums, Pension and Health contributions and increases benefiting guest stars, background actors and other working performers.

SAG response: None in the press release, but SAG has generally said that these increases are inadequate.

JLH analysis: The gains in minimums are at the higher end of what’s customary (customary is 2.5%, 3.0% or 3.5% per year, and the AMPTP proposal is 3.5% for the first year, 3.0% for the second year, and 3.5% for the third year). I don’t have any analysis of the other figures.

AMPTP press release:

The Producers’ final offer of more than $250 million represents more than a 25% gain over the 2005 contract, which SAG-AFTRA described as “the most lucrative deal in the history of actor/producer collective bargaining.”

SAG response:

Regarding the value of management’s proposals (the purported $250 million in raises): Management has not offered $250 million in raises in their proposal. Their calculation includes their projections of overscale payments to certain actors over the life of the new agreement. It is impossible to estimate an increase in overscale compensation and more importantly, this is not even money that is collectively bargained. It is instead, individually negotiated by the actors who are able to bargain an overscale deal. Given actors’ recent experiences with salary compression, we know management’s projected value numbers are highly inflated.

JLH analysis: An AMPTP source acknowledged to me that the $250 million includes some (though not all) overscale, and explained that this is customary (with estimates for all the unions, not just SAG) and results from the fact that earnings reports provided by the union pension and health funds include a certain portion of overscale compensation in the figures provided. There’s apparently no other data available.

[REVISED:]

Bear in mind that some overscale is essentially collectively bargained, because some overscale is keyed off of scale. The key example of this – and maybe the only significant example – is “scale plus ten,” i.e., scale plus 10%. That’s an overscale amount (literally, because it’s 10% above scale), yet it is effectively the result of the collective bargaining process.

In any case, SAG is right that not all of the $250 million is attributable to the contract proposal, and their concern about salary compression (actors being pushed down from their quotes) also is justified. The AMPTP’s number, although it may be the best that can be estimated given the data problems, may nonetheless be misleading (depending on the magnitude of the overstatement, which could be small or might be significant), but it's impossible to tell.

Guild Agreement New Media Thresholds

This is a rather technical post:

Regarding the AMPTP-proposed SAG agreement, the media has been saying “The thresholds for new media work are $15,000 per minute, $300,000 per program, or $500,000 per series, whichever is lowest.” This is meant to describe what work is covered and what is not. (Note that there’s another prong: if any of the actors on the show is a “covered performer,” which roughly speaking means a professional, working actor, then the show is covered.)

However, “whichever is lowest” is meaningless or unclear: $15,000 is lower than both of the other numbers. Does that mean that the $15,000 threshold is what always applies, and the other figures don't mean anything? No, obviously not. Instead, the summary is loose and inaccurate.

The actual relevant language (from the WGA agreement, the AFTRA daytime agreement, and presumably from the other agreements as well) is:

[A production is not covered if] the actual cost of production is either: (a) $15,000 or less per minute of program material as exhibited, or (b) $300,000 or less per single production as exhibited, or (c) $500,000 or less per series of programs produced for a single order....

The better way to summarize this is:

Productions aren’t covered if the production cost is either $15,000 or less per minute, or $300,000 or less per episode, or $500,000 or less per single order.

BTW, note also that the media often say the $500,000 is “per series,” but it's actually per order. If the producer orders 22 episodes, then another 15, for instance, the $500,000 applies to the 22 episodes and/or the 15 episodes, not to all 37 episodes.

Note also the problem with “per order,” not “per series”: What if the production costs $20,000 per minute, $310,000 per episode, and $550,000 for the first order. It would be covered, because all of the figures are above the thresholds.

But then suppose the second order, of 15 episodes, costs $410,000. This below the threshold. Is the production suddenly non-covered? The language doesn't specify.

Also, suppose the order is reversed. Now the program starts out non-covered, then becomes covered. This presents problems as well. Again, the contract language doesn’t address this issue.

It’s a hard problem, since having a program flip-flop between covered and uncovered status is problematic, but having it permanently keep its original status doesn’t seem consistent with the spirit of the agreement (but maybe that’s the only solution). Also, the problem can’t be solved by saying “per series,” because a series could run for several years, and one wouldn’t know the series cost until the end. Also, “per season” would present the same problem as “per order” (and what is a “season” in made for new media anyway?).

There’s another problem as well, though maybe more theoretical than real: what if some episodes include “covered performers” and others don’t – are all episodes covered? Again, the language is silent.

Dot Dot Dot ... The Mark of the Beast

Jonesing for a color laser printer? You might want to think twice. As the NYT reminds us (it's not a new story), color lasers (but not inkjets nor, presumably, b&w lasers), leave their mark with yellow tracking dots:

Some, but not all, [color] laser printers do leave a series of nearly imperceptible yellow dots on the printed page. These dots usually contain the encoded serial number of the printer and may also include the time and date that the document was printed.

The purpose of this privacy-inhibiting emendation to your output is to deter counterfeiters, who might otherwise find color laser printers a nifty printing press for knockoffs of our ever-weakening national currency. A laudable goal. However, even law-abiding speech sometimes wants to be not only free, but anonymous. User beware.

SAG Challenge Slate to Oppose Hardliners

A slate called Unite for Strength has arisen to challenge the hard line Membership First faction of the SAG Board. Their goals: unseat Membership First, make a deal with the studios, and merge SAG and AFTRA. The move was first reported by the Los Angeles Times yesterday, and in today's hardcopy edition.

The challenge raises hope that reason may eventually prevail in SAG, although this would not be for two more months, since balloting doesn’t close until September 18. The group’s goals include making a deal with the AMPTP and moving towards merger with AFTRA.

However (with all due respect to the slate members), the slate doesn't have any A-list stars on it, although some of its members are well-known. That reduces the likelihood that it will be able to wrest control of the Board from Membership First, notwithstanding the fact that MF's margin on the Board in rather slim – I’m told that a change of four or five members on the Board would apparently change the balance of power.

In contrast, MF does have at least one bigger star on its slate, Keith Carradine. In the next few days, when the list of all candidates will be officially announced by SAG, we’ll see whether MF has any big(ger) stars running. That would make it harder for the challengers to gain traction, because SAG members often vote based on star power.

In any case, these developments make it even less likely that there will be a deal before balloting ends. That's because doing a deal now has little but downside risk for MF, and delay has little but upside.

The downside for MF to doing a deal now: if they do a deal now, the deal would be severely compromised from their platform, leaving them vulnerable to charges from UFS and other critics that MF dragged the Guild and the industry through turmoil, only to achieve nothing that they couldn't have gotten without the work slowdown / partial stoppage.

The upside for MF to delay: if MF refuses to do a deal before balloting closes, they get to tell SAG members "don't change horses in mid-stream, stay the course." Many voters wll find that a powerful message.

If the challengers don't succeed in winning, then there's no assurance that MF would do a deal even after the election. Indeed, MF would no doubt (and accurately) take the results as an endorsement of its hard line position. The AMPTP (studio alliance) and MF are dug in, and the stalemate could drag on for a long time. Recall that SAG hasn’t had a franchise agreement with the talent agents for six years.

If UFS does succeed in wresting control of the Board, it would probably move to fire the SAG executive director and change the composition of the negotiating committee. The studios, in turn, would probably sit down with the new SAG team pretty promptly and negotiate a deal. It’d be a complete game-changer, in the words of the AP.

SAG has a Board meeting scheduled for this Saturday. It’ll be interesting to see how the meeting is affected by the latest developments.

WGA MIA?

By shutting down the Golden Globes (and threatening to do the same to the Oscars), SAG helped the Writers Guild close its deal and end the writers strike earlier this year. SAG members -- both rank and file and a number of stars -- walked the picket lines and were vocal in their support of the WGA.

With this in mind, I asked the WGA for a statement on the current status of the SAG negotiations ... does the WGA support SAG's positions ... and why haven't WGA leaders made any public statements of support (other than a brief appearance at SAG's small anti-AFTRA rally in June)?

The WGA's spokesman responded with a short statement: “As we have stated many times, and as everyone in Hollywood knows, the Writers Guild supports SAG’s efforts to achieve the best possible deal for its members.”

Everyone in Hollywood may "know" that the WGA supports SAG's efforts, but everyone in Hollywood also knows that the writers are nowhere to be seen in the current debate -- which suggests that they, like most of the industry, are unsupportive of a second work stoppage.

SAG Hollywood Meeting Yesterday

Several hundred SAG members attended a Hollywood branch meeting yesterday, with the Hollywood Reporter estimating 400-500 people and Variety reporting the Guild's estimate of 735. The two Allens received standing ovations and enthusiastic support. They attacked the AFTRA deal and insisted that the studios were still negotiating, but did not provide details on strategy. The Guild didn't release any comment on the meeting.

AMPTP Ad in LA Times tomorrow

The AMPTP (studio alliance) is running an ad in tomorrow's LA Times. Here's the text:

“This is the BEST DEAL the guild has bargained for in 30YEARS.”
Patric M. Verrone, President of WGAW

“This has been a great ACHIEVEMENT for the DGA.”
Michael Apted, President of DGA

“This is a SOLID DEAL... another groundbreaking agreement for AFTRA.”
Roberta Reardon, President of AFTRA

“Two words describe this agreement–GROUNDBREAKING and SUBSTANTIAL.”
Gil Cates, Chairman of the DGA’s Contract-Negotiating Committee

THE DEAL
let’s keep working

A FIFTH MAJOR LABOR AGREEMENT THIS YEAR • AN INCREASE OF $250 MILLION FOR SAG MEMBERS OVER THREE YEARS • SIGNIFICANT ECONOMIC GAINS IN MINIMUMS, PENSION AND HEALTH CONTRIBUTIONS, AND TERMS FOR WORKING ACTORS • THE SAME GROUNDBREAKING NEW MEDIA TERMS THAT HAVE ALREADY SERVED AS THE CORNERSTONE OF FOUR OTHER MAJOR LABOR AGREEMENTS THIS YEAR.

SAG commentary

No deal yet between SAG and the studios. This commentary explores why:

Letter from SAG

SAG and the AMPTP seem to be holding firm to their positions. Here's an email SAG sent to their members today, and the AMPTP response:

July 17, 2008

It’s Not New Media – It’s NOW Media

Dear Screen Actors Guild Member,

I want to tell you why your national negotiating committee has not accepted the June 30 offer put across the table by the Alliance of Motion Pictures and Television Producers (AMPTP.) For one reason and one reason only: It’s not a good offer. It doesn’t address enough of your priorities (as outlined in past SAG Contract 2008 Reports), particularly in new media.

The AMPTP ‘s current offer to SAG, which is nearly the same for new media as the deals that the DGA, WGA and AFTRA accepted, has come to be called “the template.” Some of you may be wondering why we don’t just agree to the template established by the other unions.

The template doesn’t protect actors, and while we may be the last union to come to the table, we still have the obligation to address the issues that are most important to you. We have had the extra time to effectively assess the impact of rapid technological and marketplace changes, and after careful analysis, we don’t believe the template works for SAG members.

In the six months since the Directors Guild of America reached a deal with the AMPTP, the landscape in digital media has dramatically shifted. The seven global conglomerates that own the motion picture studios and television networks are so confident in digital media prospects, that they are putting up huge dollars to fast track their technology deals.

The DGA and WGA represent writers and directors, not actors. Their resolution of the new media issues may work for them, but they don’t address your specific needs. The DGA and WGA agreed to allow producers to make new media productions entirely non-union, at the producers’ option, for projects below budgets of $15,000 per minute (effectively, almost all new media productions for the foreseeable future.)

Most union directors and writers don’t have to worry about large non-union pools of trained and talented competitors, but union actors do. Non-union principal and background actors already compete for your jobs, especially outside of New York and California. It makes no sense for SAG to agree to allow the studios and networks to exacerbate our problem by giving them a pass to produce entirely non-union under a SAG union contract. We are a union, and our mission and obligation to all of our members nationwide is to promote union jobs.

Another example of how the new media template negatively impacts actors is its effect on residuals. The AMPTP’s recent offer to SAG doesn’t include residuals for programs made for new media and streamed again on ad-supported new media platforms. So a program originally made for ABC.com could be available for re-viewing on ABC.com, or any other ad-supported Internet outlet, as often as possible and forever with no residuals, no matter how much money is generated or how many times it is shown. (There is one minor exception if a program is made for and re-run on a pay platform like iTunes and the budget is more than $25,000 per minute.)

Just as we have shown we can work successfully with low-budget filmmakers, we are flexible and can accommodate fledgling new media productions under SAG contracts. We have offered to base made-for new media residuals on a percentage of revenue with no fixed obligation. If there is no money generated, no residuals are paid. But if revenue is generated from programs available over time, actors should receive residual payments. So far, management’s negotiators have rejected SAG’s reasonable solution, while management’s proposal could mean the beginning of the end of residuals.

What some among our employers – the major global media conglomerates -- insist on terming “new media” it’s really “now media.” It is urgent, instant and immediate. That’s why achieving a fair compensation formula now, in all forms of media, and confirming jurisdiction from the first dollar of the production budget, are core objectives of the SAG national negotiating committee. [Click here to downlink the full version of our “Now Media” white paper including the index of recent new media entertainment developments.]

Your national negotiating committee takes its responsibility very seriously. We want to make a deal as soon as possible, but we don’t want to make a deal that hurts actors. No deal is better than a bad deal that allows non-union productions by our employers and snuffs out residuals for projects made for and rerun on new media platforms. We don’t need to experiment on the backs of actors. Our real world and practical experience has taught us how to provide union benefits and protections in low budget productions.

Management’s resistance is frustrating but we have to be patient. The stakes are too high to concede jurisdiction and residuals for programs made for new media. That future is now and, if we ignore it, it will pass actors by and this generation and future generations of actors will never recover.

Thank you for your understanding and your solidarity.


Doug Allen
National Executive Director and Chief Negotiator

P.S. For anyone who thinks that is a hypothetical and distant future, this is what the business magazine Forbes said in a June 2008 article about YouTube:

“The vast majority of YouTube’s library is…babies laughing and dogs splashing in wading pools… Pricing for display advertising next to user-generated content has collapsed. Rates on sites such as Facebook, MySpace and YouTube have fallen 45% since February (’08), to 18 cents per thousand page views, according to digital analytics outfit PubMatic. Most of the momentum now, says Chris B. Allen, director of video innovation at media buyer Starcom is for ads within full episodes run on the TV network sites, such as NBC and Fox’s Hulu, ABC.com and CBS.com. It’s a format advertisers understand.”

Click here to download the full text of our white paper “It’s Not New Media – It’s NOW Media.” And to see an index of significant events and deals in entertainment media technology since January 2008, when the DGA-AMPTP deal tried to set “the template.” The index shows a sizable increase in technology investments, new deals, unique platforms and dramatic market forces at work.

Send your email questions or comments to us at contract2008@sag.org. (Your email browser must be open to access the email link.)

------------------

FOR IMMEDIATE RELEASE

July 17, 2008

Statement by the AMPTP

Today, SAG's chief negotiator said he could not accept AMPTP's offer because

the digital media "landscape has dramatically shifted in the six months since

the DGA" reached its deal. This statement is not just factually untrue; it

ignores the truly seismic shifts we have all seen over the last six months in

the rapidly deteriorating economy, the worsening credit crisis, and the

skyrocketing price of energy. Even in the midst of these severe economic

problems for our country and our industry, AMPTP has made SAG a good and fair

offer, with more than $250 million in increased compensation, groundbreaking

new media rights, and pension and health protections that most Americans would

envy.

By refusing to accept the AMPTP's offer, SAG's negotiators are ensuring that

SAG members will continue to work indefinitely under the old contract - a

contract negotiated by SAG that has allowed for non-union Internet production

since 2001. AMPTP has offered to extend SAG jurisdiction to original new media

production, including low-budget programs that employ a single "covered actor."

The AMPTP's final offer also guarantees residuals of 3.6% of distributor's

gross when original new media productions are reused on consumer pay platforms,

and terms to increase pay and residuals if the program is eventually exhibited

theatrically or on television. These terms are a major advancement for SAG

members compared to the existing contract terms.

In addition, the new media framework we have offered to SAG establishes

first-ever residuals for ad-supported streaming, made-for new media programs

and reuse of clips in new media. We have also offered to double the residual

rate for permanent downloads and give SAG exclusive jurisdiction over new media

programs derived from existing television series. Not a single one of these

rights exists under the contract that expired on June 30th - a contract that

SAG members now must work under because of the failure of SAG negotiators to

make a deal.

SAG - Looking Ahead

This short press release from the AMPTP (studio alliance) re today's SAG-AMPTP meeting says it all. Not particularly encouraging. And, below, my analysis.

STATEMENT BY THE AMPTP
A small group from AMPTP and SAG met today. Both parties agreed that the contents of the meeting should be kept private. No further meetings have been scheduled.

--------

With no announced progress today, and no new meetings scheduled, what happens next?

No strike: SAG probably can't get 75% yes vote to strike (the percentage required), and they're at least afraid they can't, so they won't even call a strike vote.

Likewise, I doubt in a few hour meeting they reached an agreement - I'd be very surprised if this was the case.

I think the Board won't do anything until after the 24th, to see if any credible opposition emerges for the Sept. elections. The 24th is the nominating deadline. Why would they wait? If the Board agrees to a deal now, it would be far short of what they've been demanding - and very similar to the AFTRA deal. That would leave the Membership First faction vulnerable to a charge by opposition that all the money spent opposing the AFTRA deal, and all the foregone or delayed production, was a waste of time, money, and job opportunities.

Conversely, if the Board continues to delay past the Sept. 19th deadline for ballots, they can make the case that the members shouldn't change leadership in the middle of a contract battle. After the election, we might see a deal - or, at least, that the Board sends the deal to members without a recommendation (more likely than the Board doing a deal, unless the studios give them some figleaf improvements, which seems unlikely in light of how contentious SAG has been). Or, we might see continued, longer-term delay.

If the Board has no credible opposition (which is what most people anticipate), then the same analysis applies as the previous paragraph - except that movement, if any, might occur before the September elections. That would be a plus.

Look to get a sense of the Hollywood membership's feelings, and the Membership First faction's positioning, at the Hollywood membership meeting this Saturday, July 19, 11:00-3:00. And look for possible Board action the following Saturday, the 26th. If they do decide to send the deal to the members at that time, look for the balloting deadline to be just before August 15.

That date's the deadline the studios set, after which the improvements in contract minimums in the deal on the table would no longer be retroactive, costing the actors about $10 million. I'm not sure if this time period (7/26 - 8/15) is quite long enough under the SAG rules for a vote (I just don't know), in which case the studios would probably extend the deadline by a few days to accommodate the rules and ensure that the members could obtain the sweeter deal if they voted yes.

SAG - No New Meetings

This short press release from the AMPTP (studio alliance) says it all. Not particularly encouraging:

STATEMENT BY THE AMPTP
A small group from AMPTP and SAG met today. Both parties agreed that
the contents of the meeting should be kept private. No further meetings
have been scheduled.

Looking at the World Through SAG-Colored Glasses

Day by day, the Screen Actors Guild’s Hollywood leadership stumbles deeper into a morass, dragging behind it a bewildered and divided membership. Yesterday – Thursday – saw the spectacle of SAG insisting that it was still negotiating with the studios, while the latter just as steadfastly maintained that no such thing was happening.

Thus, when the parties’ meeting broke off in the early evening, the studio alliance (the AMPTP) castigated SAG for not accepting its final offer, which includes deal terms already embodied in four other union agreements this year (DGA, WGA, AFTRA daytime and AFTRA primetime). "We made it clear our final is our final and that we're not interested in further counterproposals," said the AMPTP’s spokesman to the Associated Press. For its part, SAG reportedly acceded to some portions of the studio proposal, but not others. That sounds like SAG’s negotiating with itself, not the studios.

Now, one can argue about the fairness of the proposed deal. Indeed, in my view, some of what SAG’s asking for is unreasonable, some of it’s reasonable but unrealistic, and some of it is indeed reasonable and might yet be achievable – if the Guild focuses its wish list.

Unfortunately, a realistic focus is exactly what’s lacking. Instead, for instance, the Guild is still asking for an increase in the DVD residual – which, though well-deserved, is completely unobtainable. The Guild is also still seeking to require union jurisdiction over low-budget made for Internet productions, even when none of the production’s actors are union members. In a world of user generated content and non-union competition, that’s just not realistic – and what SAG’s asking for would break the mold of the compromise accepted in the four other major union deals this year.

Breaking a mold and refusing to compromise can be a sign of strength, but only when backed by real power (and a rational assessment of one’s position). But power is another thing SAG doesn’t have. By pushing AFTRA towards the exit before belatedly realizing the disaster that would result from separate bargaining, and by then itself refusing to bargain early, SAG succeeded only in reducing its own leverage. Added to the strategic miscalculations are an inability to articulate a convincing case for continued delay, and a toxic combination (not of SAG’s making) of strike fatigue and economic recession.

In essence, SAG’s Hollywood leadership has backed itself into a corner, then painted itself into it for good measure. They’ve promised things to the membership – like an increase in DVD residuals and changes in the new media template – that they don’t have the leverage to deliver. Meanwhile, actors and the entire industry suffer from a work slowdown with little prospect of anything to show for it.

The ill-conceived anti-AFTRA adventure finally cut the legs out from under this enterprise, demonstrating that SAG members are highly unlikely to support a strike by the 75% affirmative vote that Guild rules require. At best, the outcome of such a vote is uncertain enough that SAG leadership is unlikely to seek a vote at all for fear of having it fail.

Hovering over all of this is the question of the upcoming (September) SAG elections. Are SAG negotiators simply stalling today so that they can later urge members not to oust board members during the middle of a labor conflict? It’s hard to know, but the absence of any apparent strategy other than continued delay makes the question compelling.

Continued delay and stalemate mean one thing: no contract at all. Under some scenarios, work will continue under the terms of the old deal, which isn’t as good as AFTRA’s. Under other scenarios, the studios might impose the terms of the new deal. Either way, without a signed union contract, there’s no SAG grievance and arbitration procedure, and there’s diminishing relevance for the Guild. Nor are there any surviving no-strike or no-lockout clauses, diminishing the desirability of SAG actors and SAG-covered work.

A no-contract situation could last for months, or even years. Indeed, SAG’s already the only above-the-line union that has no contract with the talent agents. SAG’s franchise agreement expired six years ago, while separate agreements between the agents and the DGA, WGA and AFTRA remain in place. Those agreements provide a measure of protection that SAG members no longer enjoy.

Meanwhile, the beneficiary of SAG’s miscalculations is AFTRA, which has now emerged from under the Guild’s shadow. The next few weeks will probably bring news of new television shows being signed to the AFTRA contract – as opposed to the SAG contract, which effectively no longer exists.

As if all this wasn’t enough, we also have the embarrassment of the day before yesterday, when the presidents of SAG (Alan Rosenberg) and AFTRA (Roberta Reardon) got nasty with each other on the public airwaves, lobbing a variety of charges understandable mostly to insiders. Of course, the LA audience probably is mostly insiders, as are you, most likely, if you’ve made it this far. If you didn't catch the show live on KCRW, click the link, and enjoy a lovely half-hour, then keep reading here.

Rather than dissect the show bit by bit, I'll just hit a few notes. As a general matter, it was astonishing how ill-prepared Rosenberg was. He seemed to have no message to deliver, and no particular point to being on the show. He was mostly reactive. I also was surprised when he suggested that SAG leadership had never said a negative word about AFTRA. Very peculiar.

More, I was stunned that Rosenberg tried to characterize qualified voting as a civil rights issue, suggesting in particular that Native American actors would be disenfranchised if voting on SAG contracts and strike authorizations is restricted to members who have worked as actors recently. While racial bias in casting seems indisputable, the fact is that most SAG members – of any race – work little or not at all in any given year as actors. The issue in qualified voting is whether those members, with so little at stake in the business, should have the right to vote on the momentous issues of contracts and strikes. Trying to claim this as a racial issue was disingenuous at best.

It also became clear – not that it wasn’t already – that the commercials contract is going to be a source of further dissension. Reardon said she favored joint negotiation of that contract (which expires in October, a few short months away), but she added that the two unions would need to be represented 50-50 on the negotiating committee. Rosenberg hesitated in response, awkwardly mumbling that he didn’t want to anger Reardon, before finally indicating that he opposed 50-50 representation, since more of the work is done under SAG jurisdiction.

Put it all together, and we may face the possibility of SAG negotiating the commercials contract – jointly or not – while it’s still without a signed film and TV contract. That would be odd. And by the time the commercials contract is signed (assuming that that contract doesn’t devolve into stalemate), Hollywood will have spent the better part of eighteen months struggling with labor unrest. That’s entertainment, apparently.

Further Thoughts on AFTRA and SAG

Expanding on my previous post, I do want to acknowledge the obvious: this vote was a strong victory for AFTRA, especially in light of SAG's aggressive campaign against the vote. It was almost 2 to 1. AFTRA members are making a statement that they want to work, not strike. That's something the industry should be encouraged by.

Unfortunately, I also think that SAG leadership will view this vote, in their own minds, as a moral victory. That's because the margin was significantly lower than what the unopposed daytime deal achieved (93%), and SAG's viewpoint is going to prolong the process of achieving a deal. SAG's omnibus approach also risks making it more difficult for the Guild to achieve improvements in more focused areas in which improvement might be achievable.

One key such area is minimums for clip usage. Reportedly, neither the deal on the table from the AMPTP nor the AFTRA deal have such minimums. In my opinion, they should: setting minimums is a core function of any Hollywood union. Another area is product integration, where it does seem that some of what SAG is seeking is reasonable, and a compromise should be achievable. Finally, SAG should focus on holding the line on industry-proposed changes to the way force majeure is handled in the existing SAG agreement.

SAG has also listed various other issues, but the major ones seem unachievable: significant change in the new media template now adopted in four separate deals (DGA, WGA, AFTRA daytime, and now AFTRA primetime); an increase in DVD residuals (not achieved in any of those four deals, nor, apparently, even sought in several cases); and increases greater than 3.5% in certain minimums (2.5%, 3.0% or 3.5% is the norm, seldom deviated from). SAG's focus on these issues is, as I said, distracting and dilutes its more realistic points.

What remains to be seen is how this all will play out. One thing seems clear: a SAG deal won't be quick or easy.

Narrow Margin: AFTRA Ratifies Primetime Contract by 62.4%

AFTRA has ratified the primetime contract, but SAG’s assault had great effect. The margin – the percent of yes votes – was only 62.4%. The percentage of no votes was 37.6%. Turnout was not released.

In contrast, the margin on the somewhat similar daytime pact (the AFTRA Network Code), ratified April 30, was 93%. In other words, SAG drove the margin down by 30 points – well over what I (I had predicted 20 points) and other expected when SAG’s anti-AFTRA campaign began.

Thus, although the deal passed, this has to be counted as a partial victory for SAG. A strike authorization vote still seems unlikely, because a 75% yes vote is required for passage and the fact that the AFTRA deal passed makes a successful strike authorization vote questionable. Nonetheless, SAG will be emboldened by the low yes vote achieved by AFTRA, and is likely to resist compromise with the AMPTP for some time to come, absent some other decisive action by the AMPTP.

In an invitation-only press conference call, AFTRA president Roberta Reardon said she was very happy at passage in the face of SAG’s attacks on the deal. AFTRA National Executive Director Kim Roberts-Hedgepeth said she was pleased that the AFTRA membership, negotiating committee and board recognized the merits of the deal. Reardon also said they’d like to encourage merger. She also said that Membership First must be held accountable for its actions – implying that those of Membership First who are up for re-election in September should be voted out, but she declined to urge that, saying only that she hoped SAG members “use their vote responsibly.”

The AFTRA leaders declined to predict what SAG will do now.

Here are the AFTRA and SAG press releases on the above:

—————————————–

AFTRA MEMBERS RATIFY PRIMETIME TELEVISION CONTRACT

AFTRA Leadership to Focus on Unity Initiatives Moving Forward

LOS ANGELES (July 8, 2008) – The American Federation of Television and Radio Artists (AFTRA) announced today that AFTRA members ratified a new three-year primetime television agreement (Exhibit A of the AFTRA Network Television Code) reached with the Alliance of Motion Picture and Television Producers (AMPTP) by a 62.4% margin.

AFTRA—the nation’s second largest performers’ union—represents more than 70,000 actors, recording artists, broadcasters, and other talent working in the entertainment and media industries.

AFTRA National President Roberta Reardon made the following statement:

“Today’s vote reflects the ability of AFTRA members to recognize a solid contract when they see it. Despite an unprecedented disinformation campaign aimed at interfering with our ratification process, a majority of members ultimately focused on what mattered—the obvious merits of a labor agreement that contains substantial gains for every category of performer in both traditional and new media.

“Clearly, this was not a typical ratification process, and it would be disingenuous to pretend otherwise. To those of us for whom labor solidarity is more than just a slogan, the idea that politically-motivated leaders of one union would use their members’ dues to attack another union is unconscionable. Working people do not benefit when their union is under attack.

“For the sake of our members, organized labor must be united, especially in a world of ever-increasing corporate consolidation. Given this, AFTRA leadership is eager to focus on several important initiatives in the months to come:

1) Building on the suggestion of our valued supporters, we will seek to organize a summit of top actors, performers, and union leaders to engage in a thoughtful, constructive discussion of how we can achieve unity among performers—and ultimately, if feasible, merger of the performers’ unions.

2) Given that working men and women accomplish more when we work together with trust and mutual respect, we will ask the leadership of the AFL-CIO AEMI ICC unions, the DGA, WGA and others in the labor community to come together well in advance of the next round of contract negotiations to explore ways of maximizing the leverage of entertainment industry workers.

3) Finally, I intend to promptly review with our National elected leadership and the Presidents of all AFTRA Locals the conditions needed to restore trust to re-establish joint bargaining on our respective commercials contracts.

“I sincerely appreciate the committed work of the negotiating committee, elected leaders, the labor community, and individual activist members of AFTRA who worked tirelessly and publicly to secure this solid contract for television industry performers. I am especially grateful for the support of many joint members of SAG and AFTRA—such as those in Chicago, Florida, Houston, Nashville, New York, Portland, San Francisco and Seattle—who displayed courage in the face of potential retribution, by taking a stand against disunity with the power of truth and solidarity.”

Negotiations with the AMPTP over the AFTRA Primetime TV contract began on May 7. They concluded on May 28 with a tentative agreement that was unanimously recommended for approval by AFTRA’s 31-member negotiating committee. The AFTRA National Board of Directors overwhelmingly approved the primetime television contract on June 7 and recommended the deal to members, which was ratified today. The new contract is effective from July 1, 2008, through June 30, 2011.

AFTRA contracts cover more than 70% of the programming hours on major network television.

AFTRA primetime TV dramas and situation comedies include “Rules of Engagement,” “Curb Your Enthusiasm,” “Flight of the Conchords,” “Dante’s Cove,” “Til Death,” “Reaper,” “Project Gary,” “Harper’s Island,” “Roman’s Empire,” and the new “90210.”

The AFTRA Network Code, which was ratified by AFTRA members on April 30, also covers actors and all on-camera and off-camera talent on all forms of television programming: reality shows, syndicated dramas, daytime serials, game shows, talk shows, variety and musical programs, news, sports, and promotional announcements. Programs covered by the Code include “American Idol,” “Dancing with the Stars,” “Late Show with David Letterman,” “Good Morning America,” “20/20,” “The View,” “The Tonight Show,” “Oprah,” “The Price is Right,” “Deal or No Deal,” “America’s Next Top Model,” “Days of Our Lives,” “All My Children,” “Cake,” “Saturday Night Live,” “Entertainment Tonight,” and “Survivor,” among others.

—————————————

Screen Actors Guild National President Alan Rosenberg Statement

Los Angeles, July 8, 2008 -- Screen Actors Guild National President Alan Rosenberg released the following statement today:

“Clearly many Screen Actors Guild members responded to our education and outreach campaign and voted against the inadequate AFTRA agreement. We knew AFTRA would appeal to its many AFTRA-only members, who are news people, sportscasters and DJs, to pass the tentative agreement covering acting jobs. In its materials, AFTRA focused that appeal on the importance of actor members’ increased contributions to help fund its broadcast members’ pension and health benefits.

Screen Actors Guild is the actors union with more than 95% of the work under this contract, jurisdiction over all motion pictures, and more than $4 billion dollars in member earnings under the SAG agreement over just the last three years.

We thank the more than 4,500 proud SAG members from all over this country who have signed the “SAG Solidarity Statement,” in support of their negotiators. The Screen Actors Guild national negotiating committee remains committed to our core institutional mission to improve the lives of actors and their families.

We will continue to address the issues of importance to actors that AFTRA left on the table and we remain committed to achieving a fair contract for SAG actors.”

Searching for Screenwriters in the South of France

A change of pace from labor unrest – a belated letter from Cannes, originally scheduled for print publication, but cut for space reasons.

CANNES, France – Here at Cannes, almost everybody has a home. Stars and directors are found on the red carpet, and producers and distributors inhabit the Film Market in the basement of the Palais, headquarters of both the Festival and the Market. Directors can also be found at Directors Fortnight, a sidebar to the main festival, and even critics have an event, called Critics Week, another sidebar.

But where are the screenwriters? Unfortunately, they don’t get even a weekend, let alone a fortnight. That’s perhaps not surprising in the country that originated the auteur theory, the idea that the director is the sole author of a film. But if screenwriters don’t garner the glamour, they nonetheless can be found at Cannes with a bit of searching. First stop on my hunt was the International Village, a series of pointy-topped tented pavilions on the beach. Most of the pavilions had no screenwriters on offer, but a few did.

At the Argentine Pavilion, for instance, I sat down with Juan Diaz, writer of the film “Rojored,” playing in the Shorts Corner (yet another sidebar). As we watched the yachts at anchor on the bay, he revealed that he’d made an unusual transition: from production designer to screenwriter. This background allowed him to “write with images,” he explained, which perhaps accounted for the script’s sparse dialog. Interestingly, the director was comfortable with this approach, and Juan told me the film was truly a team effort.

A later stop was the Ukrainian Pavilion, where I met with the charming Tatiana Gnedash, the writer of “Doyarka from Hatspetovka,” recently the number one TV film in Russian territories. Interestingly, although Tatiana lives in Kiev, most Ukrainian screenwriters are based in Moscow. After the Ukrainian first lady discovered that, the president began a program to support the country’s screenwriters.

Visiting the Croatian Pavilion, I found no screenwriters, but did learn an interesting factoid: a film’s screenwriter in that country is generally also the director, or the author of the underlying material if the film is based on a book. In the U.S., of course, the book author seldom gets to write the screenplay.

Off the beach, at the Nespresso café in the Palais, I caught up with Brillante Mendoza, director of the Philippine film “Serbis,” in competition at the Festival. Although the writer, Armando Lau, had departed earlier that day, Brillante helpfully discussed this controversial film, which contains explicit, un-simulated sex of various orientations. The creation of the screenplay was as unusual as the film, if less salacious. It entailed two years of development, followed by a mere five days of writing. Shooting was then completed in only twelve days, during which the actors were handed the script scene by scene, day by day. The script itself consisted mostly of dialog, and very little stage direction.

Leaving the Palais, I made my way down the main street, called the Croisette, which follows the curve of the beach, until I arrived at the screening room for the Critics Week program. There I managed to see a series of shorts called “Ecrire Pour” (“Written For”), sponsored by the French channel Canal+. The premise of the series, now entering its eighth year, was simple: There are a group of eight actors or singers – it was singers this year – and each writer contestant has to choose one of them and write a short intended for that actor or singer. The actors or singers each choose one of those scripts, and those eight chosen scripts (out of about 100 entrants) get produced. I particularly enjoyed “Sheila,” written by Anna Margarita Albelo.

Yet another program, a script workshop, was advertised at the Polish Pavilion. It’s ScripTeast, intended for Eastern and Central European screenwriters.

A different sort of competition is the EON Screenwriters' Workshop. As described at a panel at the UK Pavilion, writers start with a one-page pitch document in a very specific format, then proceed through a one-week intensive workshop, and two six-month development periods, with 80 initial entrants winnowed step by step down to eight who proceed through development. Writers are paid for their work, and the program is open to U.S writers, but you have to reside in London for the duration. A key difference from other screenwriting workshops: the goal is write big-budget, commercial films, not art house pictures.

Also on the beach, I interviewed screenwriter Jerome Soubeyrand, a vice-president of the French writers guild, the Union Guilde des Scenaristes (tiny by U.S. standards, at just 250 members). I learned that French screenwriters get even less respect than Americans. In fact, a few days earlier at Cannes, the cast and crew of the blockbuster “Bienvenue chez les Ch'tis” ascended the red-carpet steps for a photo op – but the writers weren’t invited, said Jerome. Complementing the UGS, and with a pavilion nearby, is the SACD, an organization that collects royalties on behalf of screenwriters (a function performed in the U.S. by the Writers Guild).

Back on the Croisette, at the magnificent Carlton Hotel, I found a surprise lying on a table amongst the special festival issues of Variety and the Hollywood Reporter: a Swiss Army knife, with an imprinted URL, ThisIsALongShot.com. Rather than a fish scaler or wood saw, it had a USB drive nestled between the scissors and the pocket knife. On the drive was a file that explained I had found one of fifty such knives that a pair of filmmakers had left lying around the Festival. The filmmakers, Matthew and Barnaby O’Connor, had made a $10,000 movie last year and were hoping to find distribution – hoping, that is, that a distributor might pick up a knife and then pick up the film to boot.

But the funny thing was, it turned out that the movie, called “A Horse With No Name,” had actually been a film with no script. The brothers concealed that fact from their actors, and furiously wrote scenes day by day, just in time for shooting. That set me thinking. Maybe the O’Connors should collaborate next time with the makers of “Serbis” – who knows, they might even win an award. In the magical city of Cannes, as you might imagine, anything’s possible.

Qualified Voting Redux

Remember "qualified voting"? Also called "affected voting," it's the idea that only some union members should be eligible to vote on a contract (or strike authorization): namely, those who are actually affected by it – i.e., those who work under the contract. The countervailing argument is that unions are supposed to be united, and thus any member should be able to vote on any contract.

Several months ago, anti-strike forces in SAG pushed for qualified voting, putting forward a proposal that would have disqualified many SAG members from voting because they hadn’t worked even a day in the previous 12 months as a SAG actor. That would have reduced the likelihood of a strike, because actors who aren’t working have little to fear from a work stoppage (they’re already not working). SAG leadership killed the proposal, describing the proposal as anti-democratic.

Ironically, while spurning qualified voting for their own union, SAG’s leadership urges it on AFTRA, complaining that news anchors, weathermen, and assorted other non-actors get to vote on the AFTRA primetime deal now out for ratification. That complaint seems a bit hypocritical to me. What’s good for the SAG goose should be good for the AFTRA gander.

For what it’s worth, the Writers Guild uses a hybrid system: news writers didn’t get to vote on the WGA deal, but all other members, even those whose only credits or writing income was in the distant past, did. That included not only writers of features and scripted TV, but also writers of game shows and late-night variety shows, which are rather different businesses than traditional scripted work.

To put a cherry on it all, we turn to recent news from a third actors union (they all should merge one day), Actors’ Equity, which reached a deal with Broadway theater owners on its own contract earlier this week. In passing, Variety discusses the ratification procedure that will now follow: the contract will be sent to the members, “with voting eligibility reserved for members who have worked under the production contract since 2000.” Sounds a lot like the qualified voting that SAG rejected. Is Equity inequitable, or just sensible? I’m almost sorry I raised the question.

AMPTP-SAG: How Final is Final?

Over on Vallywood, the smart and analytical law professor Steve Diamond has a piece that explains the legal implications of an employer making a "final offer," as the studios did two days ago. It's worth reading, along with my piece that also takes a look at what happens next, but through a different lens.

SAG-AMPTP: No News is No News

SAG and the AMPTP (studio alliance) met for four hours today. According to the AMPTP, the meeting was at SAG's request, and the AMPTP answered questions on the proposal it put on the table two days ago. The AMPTP adds that SAG said that it (SAG) will contact the AMPTP on Monday. No further meetings between the two sides are scheduled.

The above is per the AMPTP's press release. SAG's slightly later release was less detailed, but noted that SAG will be studying the AMPTP proposal (which is reportedly 43 pages) over the next few days.

SAG: What Next?

Hollywood’s quiet today. Still, with the studios’ “final offer” on the table, the natural questions is, what happens next – and will there be a strike? My answer: there won’t be a strike until late July at the earliest, if at all, but there also won’t be a SAG deal until then, at the earliest. Here’s why:

• Tomorrow, Wednesday, SAG and the AMPTP (studio alliance) meet. The AMPTP says it will answer questions regarding their offer on the table, but not entertain counter-offers.
• Sometime after that meeting, SAG will probably issue a press release blasting the deal, although perhaps stopping short of formally rejecting it.
• Then everyone stops working for a few days for July 4.
• Next Tuesday, July 8, the AFTRA ballots are due back, and we’ll see whether SAG succeeded in defeating the AFTRA deal. There are three possibilities:

1. The AFTRA deal passes resoundingly. Then, SAG will ultimately have to bow to the reality that it won’t be possible to make significant improvements to the AFTRA deal (though some may be possible if SAG stays focused in negotiations). The process of accepting this setback, and accepting the resulting reality, will take time and happen in stages, like grieving (per Elisabeth Kubler-Ross). Denial, anger, bargaining, depression, and acceptance may all be part of the process.

In any case, SAG leadership would take time to change its internal thinking and its public spin. Then there would have to be negotiation with the studios to close a deal (and the studios almost surely would negotiate a bit from yesterday’s “final” offer). This process will take several weeks at a minimum. So, the earliest we would see a deal would be late July.

2. The AFTRA deal is defeated. Unlikely, but possible. In this case, SAG will probably call a strike authorization vote, a process that takes 2-3 weeks and requires a 75% affirmative vote. If that vote passed, the leadership could call a strike at any time. Because of the 2-3 weeks (which starts July 8), the earliest we would see a strike would also be late July.

3. The AFTRA deal passes, but with only 50%-70% of the vote. In this case, SAG will declare a moral victory and dig in its heels. We’d spend the summer with SAG, AFTRA, and the AMPTP jockeying for position, with none of them necessarily strong enough to deliver a knockout blow. And, unlike the WGA strike, where the Oscars became a deadline that forced a resolution, there appears to be no such hard date this time.

Complicating things: if the AMPTP’s offer constitutes a “last, best and final” offer (the AMPTP says it does, but reportedly some guild sources say it doesn’t), and if SAG formally rejects it (which they may not be obligated to do – what if they neither accept nor reject it), then the AMPTP could decide to declare an impasse. Then, the AMPTP could either impose the terms of the new deal on any SAG actor who chose to work, or lock out the SAG actors. That’s a lot of if’s, and, also, a lockout might (or might not) galvanize the union. Nonetheless, watch for this as a possible move.

For more thoughts on the situation, tune in to the investor conference call I'm doing for Wachovia Capital Markets, today (Weds.) at 11:30 a.m. Pacific (2:30 p.m. Eastern). The call is open to the public and free of charge. Details in the post just below this one (http://digitalmedialaw.blogspot.com/2008/07/im-doing-investor-conference-call-for.html).

Investor Conference Call re SAG/AFTRA

I'm doing an investor conference call for Wachovia Capital Markets, tomorrow (Weds.) at 11:30 a.m. Pacific (2:30 p.m. Eastern) on the Screen Actors Guild and AFTRA situations. Please join us. Call in details below

DATE: Wednesday, July 2, 2008
11:30 AM Pacific; 2:30 PM Eastern

PARTICIPANT DIAL-IN: (800) 374-1206 (domestic)
(706) 634-5796 (intl)
Passcode: 54441528

REPLAY DIAL-IN: (800) 642-1687 (domestic)
(available for 1 week) (706) 645-9291 (intl)
Passcode: 54441528

Analysts: MARCI RYVICKER and JOHN JANEDIS, Wachovia Capital Markets

Feel free to publicize -- this invitation is open, and there's no charge. If you're a blogger, it's ok to post this info.