SAG Nudges the Studios, but the Studios Say No Thanks

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

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

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

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

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

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

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Here's the SAG letter:

September 29, 2008

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

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

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

Dear Gentlemen:

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

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

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

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

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

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

Sincerely,

Alan Rosenberg
National President

Doug Allen
National Executive Director and Chief Negotiator

Here's the AMPTP letter:

September 29, 2008

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

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

Re: Screen Actors Guild Negotiations

Dear Alan and Doug:

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

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

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

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

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

Sincerely,

J. Nicholas Counter III

cc: Peter Chernin, Bob Iger, AMPTP Board

SAG: The Calm before the Storm

The SAG elections are over, and the Unite for Strength challenger slate now has a razor-thin majority on the national SAG Board.  Indeed, one of MF’s three key leaders, David Jolliffe, was bounced off the Board (and the alternate pool) altogether.  This result, achieved by UFS (aka U4S) even in light of a somewhat lackluster campaign, suggests that SAG members are tired of MF’s inability or refusal to achieve a deal with the studios.  That view is reinforced by the low return rate (only 10%) for SAG’s push poll survey regarding the stalemate with the studios.

So now, with the members having spoken, the guild moves quickly forward into an era of progress, with a prompt conclusion of negotiations in sight?  No.  Sorry.  On the contrary, what SAG members need most immediately — a studio deal — is something that UFS never focused on (its platform was built primarily on the long-term goal of merging with AFTRA) and that MF has demonstrably failed to deliver. 

That doesn’t bode well.  Even if things went smoothly, a deal would be unlikely before January.  Unfortunately, things probably won’t go smoothly, because UFS doesn’t have clear control of the guild (and MF is not going to roll over).  There are several reasons for that:

First, MF still controls the guild presidency.  The president (Alan Rosenberg) was not up for election this year and will be in office until at least next September. 

Second, MF still controls the National Executive Director (NED), Doug Allen, and, some people contend, some other members of the guild staff (I don’t have any insight on that latter contention).  That won’t change unless UFS can change the NED’s approach to negotiations (probably wishful thinking) or fire him (see below).

Third, UFS’s margin depends on receiving near-unanimity of support from the New York and regional members.  The size of the Board (71 members) makes that hard to guarantee.  MF claims that a defection of just two regional members of the Board would erase UFS’s control, but it’s hard to verify that number because of the weighted nature of the voting system employed by the national Board. 

Fourth, the way national Board meetings are conducted makes it hard to assert control.  For one thing, the (MF-aligned) president chairs the Board meetings.  Also, the meetings run for hours, which means that New York Board members, attending by teleconference from the 3-hours-later East Coast time zone, reportedly have some tendency to go home before meetings are over, which could cost UFS its thin majority as the agenda drags on.  Further complicating matters is the use of Roberts Rules of Order to govern (or manipulate) procedure in the ridiculously oversized Board.  MF incumbents are experts in Roberts Rules; the new UFS members probably are not (at least yet).

Fifth, the balkanized nature of SAG governance has allowed MF to lock in some of its power against the new majority.  For instance, MF still controls the overwhelming majority of the Hollywood seats on the national Board (27 out of 33). (UFS controls the national Board only if it has the support of the New York and regional Board members as well.)  Also, some of the national Board’s powers are delegated to separate divisional Boards, and MF still strongly controls the Hollywood Division board.

Sixth, another aspect of balkanization is the delegation of many Board powers to various committees.  The one of most immediate interest is the Negotiating Committee, whose job is to negotiate a contract with the studios.  The members of this committee were appointed by Hollywood, New York and the regional branches, and all of the Hollywood appointees are members of the MF faction.  Ideally, UFS would replace some or all of them, but that will be difficult because, under SAG rules, replacing these members requires either a majority vote of the Hollywood Division board (which is controlled by MF) or a 2/3 vote of the national Board (but UFS doesn’t have this supermajority).  Ironically, the chair of the committee is the MF leader, David Jolliffe, who was ousted from his seat as a national Board alternate.

Seventh, it’s not clear that UFS and its allies are united on how to approach the contract negotiations, particularly considering the fact that this issue was not a focus of their campaign.  Unless it develops a clear focus, UFS and its allies will struggle unsuccessfully to control the agenda.

Eighth, UFS and its allies will have to work cohesively.  For instance, the head of the slate, Ned Vaughn, won election as an alternate to the national Board (and a full member of the Hollywood Division Board) but not as a full member of the national Board.  That raises the question of whether he will take the lead for UFS on the national Board (probably yes, since not all full members attend every meeting).  UFS will also need to fully integrate its allies, such as Hollywood independent Morgan Fairchild, who was endorsed by but not a part of the UFS slate, and the leadership of the New York Division.

Looking Ahead

That’s a lot to consider.  What happens next?  The next Hollywood Division Board meeting is in two weeks (October 6) and the next national Board meeting is almost two weeks after that, October 18, i.e., a month away.  There won’t be any progress on the studio contract between now and then.  Instead, expect a lot of jawboning.  MF has signaled that they are already lobbying the regional members of the national Board.  UFS is apparently doing the same (including via a conference call among UFS, New York and regional members this week), and should also be reaching out to the guild president (who has had differences with MF in the past), some potentially more moderate MF members, A-listers such as Tom Hanks and George Clooney, and various other constituencies.

Critically, UFS and its allies have to develop a coherent approach to the negotiations.  That’s tough, because it will require discussion of a key issue of negotiating strategy:  whether to abandon attempts to break the studios’ new media template and gain improvements.  I offered a suggested crash program on how to gain such improvements (building on a detailed memo prepared by Steve Diamond), but that was before the push poll results and dramatic economic deterioration drove the final nails in that coffin.  In light of SAG’s lack of leverage, the hard truth is that there won’t be a deal until SAG concedes on the key aspects of the new media template (jurisdiction (more here) and residuals).  The other (unfortunate) non-starter, an increase in the DVD residual, is clearly already dead.  If these are taken off the table, some other areas (such as force majeure, product integration and clips) are probably negotiable.

UFS and its allies really only have two options, neither of them good:  They can agree among themselves to give up on improving new media, but will have to recognize that it will be difficult to get the current National Executive Director (NED) and Negotiating Committee to implement that strategy, and also that the studios will know of this decision as soon as it is made, because of the large number of people involved and the attendant dissension.  Or UFS and its allies can continue to allow the NED and Negotiating Committee to seek improvements in new media, an MF approach whose failure is already clear and that will lead to nothing except continued stalemate with the studios and an electoral failure for UFS in next September’s SAG elections. 

Hovering over all of this is the need for UFS to defend against the likelihood that MF will blame UFS next year for MF’s failed strategy.  That’s a strategy that MF began to implement almost as soon candidate nominations were announced (well before the election was over), when SAG’s president, Alan Rosenberg, argued that it was inappropriate for anyone to run against the incumbents while negotiations were still pending.  The risk to SAG institutionally, and to its members, is that the contract becomes a hot potato that neither faction wants to touch.  At this rate, it’s even possible that the commercials contract (whose expiration has been pushed to March 31) would get negotiated before the stalemated TV/theatrical contract.

UFS and its allies also have to decide how to deal with the NED.  They could fire him, but it’s not clear they have the will to do so:  In an interview with me several weeks ago, Vaughn indicated great reluctance to take this approach, and both he and new Board member Adam Arkin seemed undecided on the matter in an LA Times interview within the last few days. 

The hesitancy arises at least in part from a view that the NED could be persuaded to change his spots (which seems unlikely, though perhaps not impossible), and also the idea that firing him would signal that the job is politicized, as though anyone could imagine it isn’t already.  Another concern is cost, since the NED’s contract (which reportedly expires in January 2010) would probably have to be bought out, apparently to the tune of at least $600,000 (1-1/3 years multiplied by approximately $450,000).  Not chump change, but a relative bargain considering the money SAG members are losing by not having a new contract with increases in minimums — the studios, for what it’s worth, claim that these losses are over $19 million already — and the hundreds of thousands of dollars wasted on the failed anti-AFTRA campaign (more here) and the push poll.

Other UFS or UFS-aligned members of the national Board do feel that the NED should go.  However, this approach also has difficulties.  One is the buyout cost, but even more troubling is the question of what happens next.  Who will appoint and control the hiring committee and how long the process would take are key questions the guild would have to ask, but an even harder one is who would take the job, or even want to undergo the hiring process.  That process would be particularly dangerous for a candidate because of UFS’s narrow margin of control.  Any NED candidate would have to contend with the possibility of his or her candidacy becoming publicly known, then being lost by one or two dissenters among UFS and its allies.  The interview process would thus be a high-stakes gamble that few qualified candidates would be willing to undergo.

In any case, we can expect a struggle among the UFS and UFS-aligned members of the national Board on this issue — and as long as they remain divided internally, the NED will stay, because he has the support of MF, and because inertia can always carry the day.

The other big issue is what to do about the Negotiating Committee, dominated as it is with locked-in members of the now-spurned MF faction.  As indicated above, this isn’t an easy problem.  However, as a last resort, the national Board might have to dissolve the committee, and attempt to negotiate directly, unless another approach to this problem can be found.

One thing we won’t see is a strike.  The guild membership has rejected MF and 91% of the membership wouldn’t even vote in the survey for a “better” and “fair” contract with the studios.  The economy has deteriorated to its lowest point in at least two decades (thank you President Bush), and Los Angeles, in particular, has been bashed particularly severely by the Writers Guild strike, housing price deflation, foreclosures (which now represent one-third of all LA County home sales), the failure of Pasadena-based IndyMac bank, and continued high gasoline prices, not to mention economic pressure from Silicon Valley.  A flight to the moon is more likely than a SAG strike.  Beyond that, unfortunately, the only certainty is bitter infighting and continued stalemate with the studios.

A Push-Poll with No Oomph

Sarah Palin may not know what the Bush Doctrine is, but SAG’s leadership seems to have forgotten what we might call the (Teddy) Roosevelt Doctrine:  speak softly and carry a big stick.  (It’s actually part of a West African proverb, apparently.)  Perhaps the Guild and its governing hard-line faction, Membership First, made a transcription error, because the union’s standard operating procedure over the last several months seems to have involved shouting loudly while carrying a small stick.

The latest example of this surfaced today, as SAG trumpeted the results of its membership survey regarding negotiations with the studios.  To no one’s surprise, an overwhelming majority of respondents to this push-poll – 87% – voted to recommend that SAG continue negotiating with the studios to “secure a fair TV/Theatrical contract for actors with better terms than the [studios’] ‘final offer.’”  Who’d vote against a fair deal, after all?

What was a surprise, however, was the shockingly low response rate:  only 10% of the approximately 103,000 paid-up SAG members bothered to vote – less than half the turnout SAG usually gets for votes on referendums and board elections.  The other 90% threw their ballots in the trash.  Even in Hollywood – where SAG’s hard-liners hold sway – about 50,000 paid-up SAG members didn’t vote.  That’s pretty amazing.

Why the low turnout?  The survey was large (8-1/2 x 11), brightly colored, invitingly designed and well-written.  It dealt with issues of real concern to middle-class actors.  It was urgent and partisan in tone, was attended by a lot of publicity, and came in the middle of an election.  Yet few people bothered to vote. 

Why?  Perhaps disgust with the leadership and endless internecine fighting.  Maybe fear that the bar-coded ballot wouldn’t be kept secret.  Or possibly a simple desire to be left alone and allowed to work in peace.  Probably all of those, coupled with economic worries and fatigue from the Writers Guild strike.

Whatever the reason, the Guild’s inability to get more than 10% of its paid-up members to tear off a postcard and express an opinion doesn’t bode well for it.  How many of the silent 90% would vote to authorize a strike?  Probably not many.  And if there were a strike, how many people who wouldn’t pick up a pencil to vote would nonetheless pick up a picket sign?  Again, probably not many.

Unfortunately, what the poll shows more than anything is that the Guild is in the process of making itself irrelevant.  When 90% of one’s own membership doesn’t bother to vote, that’s not an expression of “resolve” or an indication that members “agree with the strategy of the [union leadership],” to quote SAG’s press release.  On the contrary, it’s a sign of indifference – and an indication that the leadership has failed to organize the membership.

Run those numbers again: 9% of the membership wants a better deal – but surely not all of them would be willing to strike over it (the survey didn’t ask that question).  So, that’s somewhat less than 9% who’d support a strike, at least 1% who wouldn’t, and 90% who care so little that they won’t even vote in favor of seeking a “fair” and “better” deal.  That’s not a union on a strike footing, and without the big stick of a strike threat, SAG’s unlikely to get any improvement in the new media portions of the deal.

Now what?  The studios understand the numbers, and are unlikely to read them as a realistic sign of danger.  Meanwhile, SAG’s leadership is unlikely to call for a strike authorization when the membership seems so uninterested.  Yet, both SAG and the studios are dug in to their positions.  That’s a prescription for more stalemate and no deal.

Up next:  In less than 24 hours, we’ll know the results of the SAG board elections.  Whatever the results, don’t expect a deal with the studios anytime soon. 

An ironic postscript:  I just visited the Hollywood Reporter and Variety websites to read their stories about the survey.  Both of the sites interrupted me with pop-ups that wanted to … sell me something?  No, each of the pop-ups was itself a survey, asking my opinion on the underlying website.  Ugh, no thanks.  I’m done with surveys for the time being.

The Denigration Express

Hollywood’s labor troubles seemingly haven’t been so bad since the days of police brutality at studio gates, when actors, writers and directors were first trying to unionize. That’s an exaggeration, of course (and there has been much turbulence in the intervening years), but even in the dark and primordial days of the 1930s, it would have been hard for organizers to imagine the paradox of 2007-08: a writers strike over new media – the Internet and cell phones, both unimaginable 70 years ago – that lasted 100 days despite the fact that there’s been scant money in these media to date and not much likely for the next few years.

The writers strike settled in February, but in the months since, the Screen Actors Guild has been flying apart at the seams like a rag doll spun through the air by a petulant 2-year-old. First came SAG’s ill-fated attempt to marginalize a smaller actors union, an effort that only succeeded in helping that union, the American Federation of Television and Radio Artists, become a more effective rival of the guild. AFTRA ended up reaching a deal with the studios, while SAG bought itself a continuing stalemate. As a result, SAG members work under a contract that expired almost three months ago, while AFTRA members have the benefit of wage increases and other improvements under a new agreement.

The key sticking point? New media, again. SAG has rejected several portions of the template deal accepted this year by the Writers Guild of America and the Directors Guild of America, and by AFTRA in two separate agreements (one for daytime TV, the other for prime time). The studios refuse to back down, and so does SAG – yet the guild has little leverage (despite making some valid points), because it has no apparent ability to strike.

High threshold

That inability arises because a strike authorization, under SAG rules, would require a 75 percent affirmative vote of those members voting. It’s a high threshold that SAG is evidently afraid it can’t meet, since the leadership hasn’t even sought an authorization. Instead, they’ve sent out a 12-page booklet attacking the studios’ proposed deal, accompanied by a postcard that purports to ask members for an advisory vote on that deal. However, the wording all but preordains the result, and in any case the intent seems less to solicit members’ opinions than to shape them. That’s what political strategists call a “push poll.”

The result of an intransigent yet deleveraged guild has been stalled contract talks. Now we’re in the middle of the SAG board elections, further impeding negotiations – particularly since the hostility between the two main electoral factions, Membership First and Unite for Strength, rivals that of the Hatfields and McCoys. Riven by factionalism, split along geographic and economic lines, and divided on how to deal with AFTRA – merge with it? lay waste to it? wish it away? – SAG seems unable to maintain focus on the studios, its ostensible opponents. No such difficulties bedeviled the Writers Guild, let alone the staid Directors Guild.

As a consequence, the actors’ blogosphere seethes with resentment, and the entire SAG ecology hurtles along on the denigration express, where name-calling and fear-mongering abound, endless blog comments are the norm, and calm analysis is in short supply. Journalists and commentators (this author among them) are routinely vilified, and at least one prominent journalist-blogger is herself fond of the reportorial equivalent of long knives.

Election ballots are due back Sept. 18, so the results will be known soon. Meanwhile, the advisory survey postcards are due back today, the 15th. Given the timing, the 12-page booklet – which unsurprisingly mirrors the platform of the dominant Membership First faction – amounts almost to an electioneering brochure paid for with union funds.

In any case, the election will probably settle nothing, at least in the short term. Dissension, and the long process of seeking a strike authorization, or restarting negotiations with the studios (depending on who wins the elections), all but guarantee that there’ll be no deal before January at the earliest, or perhaps longer, since neither faction is likely to score a knockout punch. That timeline means more uncertainty in Hollywood for months to come, while at the same time driving the apparently-toothless SAG toward declining relevance.

The entertainment industry can ill-afford this continuing disruption – and is ready for it to end – but this particular television series will be on the air for at least the remainder of the fall season. The plot’s turning out to be a tragedy with elements of farce, and it seems the show must go on whether the audience wants it to or not. Stay tuned – if you can stand it.

This article originally appeared Monday in the Los Angeles Business Journal.

SAG: How to Make a Deal

SAG staggers on, occupied by bitterness and dissension, but with little apparent progress towards a deal with the studios. The last contract expired almost three months ago. Does that mean one’s impossible? No. Here’s a plan.

(Hats off to Stephen Diamond for his memo “How to Break the Template” for several of these ideas. Also, I know that blog pages can be hard to print out cleanly, so email me at jhandel at att dot net for a pdf.)

Why Bother?

First, a threshold question: why bother making a deal? Two reasons:

(1) SAG’s missing out on the good things AFTRA got, such as 3.5% annual wage increases (3.0% in the second year of the three year contract, but with the other 0.5% diverted to the pension and health fund), and new media coverage that, though flawed, far exceeds the current no-media state of affairs.

(2) The union risks becoming increasingly irrelevant. AFTRA is signing new TV shows, and will continue to do so. Two years out, those minimums will exceed SAG’s by about 6.5% - 7.0%, and the pain will be real. Eventually, as a result, some SAG shows may choose to decertify, and go with AFTRA. And, as new shows continue to be introduced, AFTRA’s market share increases. Likewise, reality programming, to the extent it’s unionized, is already AFTRA, not SAG. In addition, AFTRA will come under pressure to expand its jurisdiction to digitally-shot theatrical motion pictures, and may make moves in that direction, notwithstanding its current denial of any desire to do so.

Moreover, AFTRA’s direct relations with the AFL-CIO will deepen (SAG’s affiliation is indirect, through an organization called the 4A’s), and its strategic alliance may bear some sort of fruit. Meanwhile, SAG relations with the WGA are somewhat pro forma, its deal with the talent agents expired years ago, and its relations with the rest of the industry are chilly. Even within its own membership, SAG’s relations are poor: specifically, it’s Hollywood vs. the rest of the country, New York included.

Do the Studios Care?

Of course, it takes two to tango. Do the studios even care about a deal? Yes, somewhat. They probably have several fears. (1) The effect of a possible strike, no matter how apparently unlikely, that could interrupt feature production. The effect on fall 2009 would be devastating. (2) The effect of a possible strike on production of serialized television shows. Episodic shows are more immune, because production of a few shows means at least a short season, whereas half a season of Lost is pretty useless. (3) Destruction of the 2009 Oscars. Recall that the threat to the Oscars was part of what drove a settlement of the this year’s writers strike. Astonishingly, SAG has made no effort to get A-listers to boycott the Emmys, which take place this weekend, or to set up informational picket lines. (4) Destruction of pilot season. No actors, no pilots. This too would require a credible strike threat.

Put the Union on a Strike Footing

Obviously, three out of four of these leverage points require a credible strike threat. Thus, SAG leadership must develop a consensus among the membership that a strike authorization is necessary. This, in turn, would require promising that a strike would be a true last resort. The critical support of New York and regional leadership is unlikely to be offered without such a promise. Even then, it will be an uphill climb, since I’m informed that a similar promise was made but not kept in 2000, resulting in a commercials strike.

Develop a Message

The support of New York – and, hopefully, the Regional Branch Division (SAG’s branches throughout the country) – is not enough to obtain a strike authorization (which requires 75% affirmative vote of those voting). SAG must develop a one-sentence, coherent message. It doesn’t have one now. Read the push poll mailer recently sent to members, and all you’ll find is “we’re still negotiating for a better deal” and a grab bag of issues.

That’s not a compelling message. The writers had one: “New media is here, and we’re not going to get screwed again the way we did on home video.” That’s rough, guttural and compelling.

By comparison, SAG has nothing. A true message must answer the question “Why does SAG need more?” The existing deal was good enough for the roughly 50,000 performers who are members of AFTRA, and the new media template portion of the deal was good enough for the directors and writers as well. Why not SAG? A clear message is necessary.

What’s the message? Maybe “It’s a bad script.” “The studio deal’s not ready for its close up.” “The pictures didn’t get smaller, the deal got worse.” “Media giants, tiny deal.” “Actors stand tall.” I don’t know: I’m not a messaging expert, but SAG needs to hire one now.

The negotiation needs a logo and music as well. Entertainment product has these, and so do political campaigns. SAG should too – it’s common sense.

Go Public

Why isn’t the SAG Executive Director in the trades, Back Stage, the blogs, the LA Business Journal? Why hasn’t the General Counsel done a piece for the LA Daily Journal, a legal newspaper (apologies if he has – I missed it in that case) – not to mention the LA Times (there may have been an op-ed, I don’t remember, but it time for another). Where are the ads in the trades? It’s time to send the message that SAG is willing to make concessions if the studios do. That kind of transparency has a hope of moving public opinion.

Get the Reps Involved

Has there been any attempt to get the support of top entertainment lawyers or talent agents? Apparently not. Entertainment lawyers may be more realistic, given SAG’s frosty relationship with the agents. Hire one. The DGA did, and it sent a message.

Make it National

Why is the National Executive Director sitting still in Hollywood? He needs to be on the road: New York, Chicago, San Francisco, and wherever large groups of members are found. Town hall meetings should be the order of the day. Organize the members and get them supportive of a strike authorization.

What’s more, there are stars all over the country – why haven’t they been activated in press conferences? Other entertainment labor unions are national as well. Significantly, the IA (craft and technical workers) has a new National Executive Director: has SAG reached out to him?

Get Membership First – the hardliners – activated as well. Do they care about SAG, or just their own faction? Probably both. They’re assertive and at least some of them are very knowledgeable. Send them out around the country.

Get Meaningful AFL-CIO Support

Where is the rest of labor? Elsewhere. We’re not seeing statements of support for SAG, and even the Writers Guild has been stingy in its public support.

Reach Out to AFTRA

Time to mend some fences. AFTRA’s probably too steamed to be a source of great support, but no harm in taking meetings and keeping them apprised. Who knows?

Take It to the Net

What’s more, SAG needs to flood the Internet. Where are the YouTube videos, the articles in the Huffington Post, the live streaming video broadcasts, the MySpace, Facebook and LinkedIn pages, the Twitter tweets? Answer: nowhere, nada, nunca, none of the above. Why? These aren’t optional, and they should be coming from the membership as well as the leadership. The union should be training its members in new media and organizing small film crews to write, produce, direct and act in videos.

The union says it cares about new media – that’s the biggest stumbling block to making a deal. Let’s see the union take its own words seriously and get online.

Reach Out to the AMPTP and Studios

To prepare for a deal, it’s time to send the message that SAG is ready to be dealmakers, not deal breakers. Reach out to the AMPTP. Let that group’s long-time executive director, who is reportedly near retiring, that he can go out on a high note if he’s willing to hold serious talks. Let his long-time deputy know that she’ll get credit too, and public thanks from SAG.

Equally important, reach out to the studio heads, who are, after all, the bosses of the AMPTP’s executive director. Recognize their differing interests, and develop a strategy.

Get the Politicians Involved

Where’s are the mayors and city councils of LA and New York. Nowhere, and that’s because the huge number of SAG members in those two cities haven’t flooded them with phone calls, emails and letters. 120,000 SAG members, most of them no doubt in LA and New York, yet no political organizing? Shame on SAG.

Even the California Governor, despite the fact that he has bigger fish to fry (like getting a state budget passed), should be good for some support, and so should the state’s senators and LA state senators, state reps and Congressional reps – but only if all of them get pressure from constituents.

Reach Out to the Analysts and Pension Funds

Frankly, the analysts won’t care unless there’s a strike threat, and even then it’s marginal, because the effect of a strike on a media conglomerates’ profits is not great (the companies are too big) and because analysts are too busy with other concerns, such as the larger U.S. economy and also their own job security as big banks institute cutbacks. Still, it’s worth a try. Likewise, pension fund managers and the like (hedge funds, private equity funds, and VCs) are occupied elsewhere, but at least keep them apprised via email blasts and conference calls.

Reach Out to the Public

Fans need to hear from the stars, the character actors and the working-class actors. Actors are sexy, colorful, compelling, and skilled at communicating. Why aren’t they in local newspapers, the wire services, magazines, and online? Stars should offer the gossip tabloids and websites (Perez Hilton and TMZ) some casual photos if they’ll run a SAG story.

Make the Guaranteed Completion Contracts Meaningful

SAG’s issued Guaranteed Completion Contracts – no-strike contracts – to several hundred small production companies. But, as the Writers Guild realized, small companies don’t matter. The Writers Guild’s efforts in this regard were only newsworthy when they issued them to the latenight shows (not applicable here) and a few large, non-AMPTP companies: Lionsgate and United Artists in particular. Time for SAG to do the same. UA won’t make much difference this time – the company’s foundering – but Lionsgate still counts.

Organize a Boycott of Star’s Marketing Efforts

Try to get the stars to refuse to do publicity. Hit the studios where it hurts. Yes, the A-listers would be in breach of their contracts, but is a studio really going to sue George Clooney for refuse to do a press junket.

More Boycotts

Boycott and picket a studio. Do the same with the theater chains – at theaters and at their headquarters. Boycott the big and/or high profile DVD sellers (Amazon, Wal-Mart, Best Buy, Target and Circuit City) – again, at stores in LA, New York and across the country, and at their headquarters.

Threaten the Globes and Oscars

Make clear that the Globes will once again be reduced to a cut-rate press conference and the Oscars likewise. That would hurt the studios, and ABC (which has broadcast rights to the Oscars).

Reach Out to Vendors

LA hotels, restaurants, limo services, party planners, caterers, fashion designers, and florists suffered mightily when the Globes were canceled, and the Oscars would have been worse. Get the message out to them, and get them planting a bug in the studio execs’ ears whenever they’re in contact with them. The more people pressuring the execs to get a deal done, the better.

Acknowledge that Compromises Will have to be Made

Be publicly (and privately) reasonable. Send the message to the AMPTP and the Hollywood community that SAG is not a group of unreasonable hardliners, and that SAG will compromise to get a deal made.

Get a Mediator

The writers apparently got burned when they offered a concession (abandoning a demand for an increase in DVD residuals) without doing it through a mediator. No need for SAG to suffer the same fate.

Tee up the Deal through Informal Talks, Then Get Back in the Room

Probably best to conduct as much informally with the AMPTP as possible. Come January, get back in the room, and get a deal done ASAP. If there’s no real movement, crush the Golden Globes and see a deal done in February, before the Oscars.

Conclusion

Now the downer. Most of the above could have, and should have, been done over the last few years. But it wasn’t, and some of that time was occupied instead by vilification of AFTRA, a strategy that led to the morass SAG finds itself in now. Will the current leadership follow these recommendations, or something like them? Sadly, probably not. The most likely forecast for the coming months is not progress, but more stalemate.

AFTRA Interview Available in Archives

To see archived video of my interview with AFTRA National Executive Director Kim Roberts Hedgpeth, click here:



Or go to http://www.ustream.tv/channel/look-at-la. The archived video wasn't working earlier, but it is now.

REMINDER - Live Streaming Video Interview with AFTRA National Executive Director

Just a reminder: On Look at LA today, I'm doing a live streaming video interview with AFTRA's National Executive Director, Kim Roberts Hedgpeth. The interview will be today (Wednesday) at 2:00 p.m. Pacific / 5:00 p.m. Eastern. Go to http://www.ustream.tv/channel/look-at-la just before showtime. Please tune in!

Live Streaming Video Interview with AFTRA National Executive Director

On Look at LA this week, I'm doing a live streaming video interview with AFTRA's National Executive Director, Kim Roberts Hedgpeth.

As you probably know, AFTRA (the American Federation of Television and Radio Artists), and its relations with the studios and its sister union SAG, have been much in the news this year. This interview will be a unique opportunity to see these issues explored with the top executive of this 70,000 member union.

The interview will be today (Wednesday) at 2:00 p.m. Pacific / 5:00 p.m. Eastern. Go to http://www.ustream.tv/channel/look-at-la just before showtime. Please tune in!

SAG independent candidate interviews archived

To watch my interview on Look at LA with the independent candidates for SAG board, click here:

If you can't see the video, go to www.ustream.tv/channel/look-at-la and choose the most recent video (dated 9/5/08).

BTW, I interviewed the candidates in order of their position on the SAG ballot, except that Dan had to leave early and Rico arrived late, both due to scheduling constraints (no implied criticism, obviously). Everyone was invited publicly, and everyone except two or three (for whom I didn't have contact info) was invited via email and phone. A couple didn't respond, and several others were unable to make it.

Reminder - Live TV interviews with independent SAG Board candidates

Just a reminder: I'm interviewing the SAG independent Board candidates today on Look at LA. The interviews will be today, Friday (9/5) at 2:00 p.m. Pacific / 5:00 p.m. Eastern and will last for approximately 2 hours, depending on the exact number of candidates. To watch, go to http://www.ustream.tv/channel/look-at-la. Please tune in!

Can SAG Keep a Secret?

I don’t mind bar codes, at least when they’re on books, boxes, and bags of sugar. When I find them on ballots, though, I get more nervous. That turns out to be a legitimate concern in the case of SAG, which sent out a 12-page mailing a few days ago assailing the studios’ proposed deal, accompanied by a bar-coded postcard asking SAG members whether the Guild should keep fighting for a better contract or accept what the studios were offering. Now it seems the bar code may compromise Guild members’ confidentiality.

Let’s leave aside the fact that this survey is a push poll – a poll designed to influence opinion rather than simply record it. Leave aside, also, the fact that this mailer, paid for by union funds, comes in the middle of the Guild’s annual elections, and echoes the platform of the dominant faction, Membership First, which has 33 candidates on the Hollywood Division ballot: in other words, the mailer is close to being a piece of campaign literature paid for out of the union kitty.

Instead, look at the bar-coded postcard. As recounted in an anonymous SAGwatch posting (also discussed on Blog Stage and Vallywood (and here)), SAG National Director of Governance Michelle Bennett allegedly told a SAG member that “authorized staff members” at SAG could have access to a record of how each member voted (which is trackable because of the bar code).

If true, that’s not a confidential vote, despite language on the postcard that claims this to be the case. And the lack of confidentiality will no doubt leave some Guild members uneasy about voting – particularly in light of the highly partisan nature of the elections. Considering that Membership First controls the union, the dissenters – those who believe it’s time to get a deal done – may be hesitant to cast votes. That’s plain wrong: No member should have to fear his or her own union. The integrity of voting – even if only advisory voting – should be maintained.

I spoke with SAG about these anonymously-sourced allegations. The Guild told me the bar codes are necessary so that the independent company receiving and tabulating the postcards could verify that no member voted multiple times. Fair enough, I said, but would in fact a staff member such as the National Executive Director be able to get a list of who voted how … and if so, why should he be able to get such a list? SAG said they’d get back to me by the end of the day, but never did.

What to do? For one thing, the Guild and the independent tabulating company need to agree publicly, and in writing, that individual member voting information will not be made available to any SAG staff, even the National Executive Director, nor to any officer or Board member. They have no legitimate interest in it.

Second, the Guild needs to commit to publicly release all results from the survey – not just the overall percentages yea and nay, but also the absolute numbers (the turnout), with all figures broken down by Division (Hollywood, NY, or Regional) as well. SAG declined to commit to this transparency when I asked.

Finally, members who are concerned should contact SAG. Judging from the SAGwatch posting, the appropriate person may be Michelle Bennett, SAG’s National Director of Governance. Her number, according to the SAG website, is 323-549-6094. Perhaps if enough members call, SAG will assure true confidentiality, and transparency, for the survey vote. If you do talk to her or any other SAG staff, send me an email (jhandel (at) att (dot) net) or leave a comment here (anonymously if you wish), so that we all can know what position SAG is taking on this.

Live TV interviews with independent SAG Board candidates

Last week, I did live Internet online video interviews on my Look at LA talk show with representatives of Membership First and Unite for Strength, the two slates battling for control of the Screen Actors Guild Board. Those interviews were widely viewed and blogged about.

But - those slates account for 64 of the 84 candidates. There are 20 independent candidates, most of whom have less visibility.

So, this week on Look at LA, I'm interviewing the independent candidates. I expect 8-10 of the 20 independents will appear. These will be 1 on 1's, not a panel or a debate. It's an unprecedented chance for members to discover the independents and evaluate them.

The interviews will be this Friday (9/5) at 2:00 p.m. Pacific / 5:00 p.m. Eastern and will last for approximately 2 hours, depending on the exact number of candidates. To watch, go to http://www.ustream.tv/channel/look-at-la. Please tune in!

When Will There be a Contract?

When will there be a new SAG TV/theatrical contract – i.e., when will the studios and SAG close a deal? My guess: not until January or even February of next year. Do the math:

1. If Membership First wins the election overwhelmingly, and if SAG members overwhelmingly vote in the SAG survey (a push-poll, designed to influence people's votes) to have the Guild continue pushing hard for a better deal (i.e., 85% or more affirmative, and a good turnout), then MF will be emboldened to call for a strike authorization vote. If that vote achieves the requisite 75% approval level (a high level, which is why it might take as much as 85% affirmative on the poll, particularly given SAG’s embarrassing failure to defeat the AFTRA deal), then SAG will have gained significant leverage against the studios. All of these conditions have to apply.

But even then, there’s no instant deal. It takes time to win the election (ballots are not due back until the 18th), hold a new Board meeting (I’m guessing early October), hold a strike authorization vote (2-3 weeks), begin negotiating with the studios, and convince them that the landscape of power has changed. This process also runs into Thanksgiving (a week of no negotiations) and Christmas and New Years (2-3 weeks of no negotiations). That takes us into January. By then, it may take the threat of destroying the Oscars to conclude a deal (as was the case with the writers strike last year). Then of course, there’s the ratification vote.

2. If Unite for Strength wins the necessary 6 or so seats to gain control, it will take time to reorient or replace the National Executive Director and Negotiating Committee and time to open and then conclude negotiations with the studios. There will also be distracting fights with MF that will delay matters. In this scenario, we might get a deal in November or December, followed by a ratification vote, perhaps as late as January.

3. If neither 1 nor 2 applies, then we have continued stalemate. SAG (i.e., MF) won’t have the leverage of a strike threat, and will probably not have significant leverage until the Oscars. (That’s assuming the studios restart movie production in the next month or so, in light of the absence of a strike threat. Otherwise, there is some leverage earlier.) Thus, in this scenario, there’d be no deal before January or February. Even so, there’s no assurance that the studios wouldn’t just grit their teeth and sacrifice the Oscars. If that happens, who knows when there’d be a deal.

So, no matter how the election goes, don’t expect this sorry mess to end before January, at the earliest.

What Happens if the Challengers Win Control of the SAG Board?

What happens if the challengers, Unite for Strength, win control of the SAG National Board? That would effectively happen if UFS (aka U4S) won a certain number of seats, apparently about 6 seats, displacing incumbents who are members of Membership First (MF), the dominant faction. There’s expected to be an alliance between UFS and the New York and regional branches of SAG that would then be in control. That would give UFS and its allies control of the SAG National Board.

That alliance would then want to take control of the negotiating process, and strike a deal with the studios. But there’s a persistent rumor spread by at least some members of MF that that’s impossible – that SAG rules would block a majority of the Board from taking control of the negotiating process. Is that true? Let’s take a look.

Control means directing the conduct of the National Executive Director (NED) and the negotiating committee. They’re supposed to take direction from the Board. But what if either of them refuse to follow new policy set by a new board? Then the Board might have to fire the NED, and might have to take control of the negotiating committee or of the negotiating process. The Board might also have to fire the NED if it decided he were too closely identified with MF to be an effective negotiator under a new Board.

Now, I don’t know if those things are what UFS plans (and UFS leader Ned Vaughn declined to say when I interviewed him on live streaming video), but they seem to be potential moves. Are they possible? Yes, it seems likely that they are, contrary to the rumor being spread.

National Executive Director

Let’s look first at the National Executive Director. Sec. V(1)(H)(2)(i) of the SAG Constitution and By-Laws gives the National Board final, nondelegable, exclusive authority over “all decisions regarding the employment of a National Executive Director, including the decision to appoint or terminate that executive.”

That means that the NED is unprotected by the SAG Constitution and By-Laws. Now, he certainly has an employment contract. Most executives making hundreds of thousands of dollars do. That contract is not public, and SAG declined to tell me its terms. Those contracts always allow the employer to fire the employee for cause, i.e., misconduct. That seems inapplicable here: the NED’s approach to negotiation, though ill-advised in my view, is what the Board wants.

However, those contracts, and common practice, usually also allow the employer to fire the employee without cause (i.e., even in the absence of misconduct) if he or she is paid a sum of money, which is often the remainder of the amount that would have been paid under the contract (in other words, the employer has to “pay out the contract”). Sometimes the contract provides that this amount is reducible by compensation the employee gets from any new job or consulting he or she takes during the remaining term of the contract. This is called mitigation. Sometimes the employee has a duty under the contract to mitigate (i.e., seek a new job); sometimes not.

We don’t know the terms of the NED’s contract, because it’s not public. However, if it contains these customary provisions, then the SAG National Board could indeed fire him, though at a monetary cost.

Even if the Board can’t fire the NED (which seems highly unlikely), Sec. V(1)(H)(1) vests in the National Board “The general management and the control of the affairs” of the Guild and the right and responsibility to “set[] the strategic direction” of the Guild. The Board could seemingly order the NED to take a different approach to negotiation, and if he fails to do so, that would probably be cause for terminating him.

Negotiating Committee

But what about the Negotiating Committee, to which the Board has delegated conduct of the negotiations? There’s a practice of keeping the Negotiating Committee the same, not just during the negotiating cycle, but throughout the three-year life of the contract. But there’s no rule that specifically requires this, contrary to some misperceptions to the contrary.

However, even though changing the membership of the Negotiating Committee is not impossible, it is difficult, as Steve Diamond explains in a blog post. Art. VI(7)(A) provides as follows:

Each Division Board shall have the authority to select its ... members, alternates, or co-chairs (if applicable) of any other committees which have been allocated to the Division. Other than the Vice President and any members of the National Executive Committee, members, alternates, and co-chairs so selected may be removed by the Division Board at any time. ... The National Board may remove any committee member, alternate, or co-chair by a two-thirds (2/3) vote of the Board.

This means there are two different ways to remove a Negotiating Committee member (or all of them). First, the Division Board that appointed them can remove them at any time. No supermajority is specified, so I presume this defaults to a simple majority. Arts. V(1)(J)(4) & (6) specifies "majority" as a default, but speaks only to votes of the entire Board. I found no discussion of whether Division Board votes default to simple majority.

However, control of the Hollywood Board will presumably not change in this election, because only a third of the Hollywood Division’s National Board seats are up for reelection. That’s because Board members have three-year, staggered terms. Only a third are up in any given year. Since MF has all but one member of the Hollywood Division’s Board seats, control of that portion of the Board won’t change even if UFS wins all of the seats that are up.

What about the National Board, where control will change this year if UFS wins the requisite number of seats? Here, a 2/3 vote is required to remove a committee member. Diamond describes that as “a recent change to the Constitution, reflecting the desire of the Hollywood Division – now controlled by MF – to retain influence in the [N]ational [Board].” My sources advise that the change was made in April 2007. Even if UFS wins all of the seats that are up, it appears that they can’t win a 2/3 majority, because the number of seats that are up for reelection is too small.

Of course, finding that the Negotiating Committee is locked into place by a subsequently deposed Board would lead to protest within the Guild, because it would thwart the will of the majority. We might even see a complaint to the National Labor Relations Board that this situation amounts to a breach by the Guild of its duty of fair representation of each member. Whether such a complaint would have merit is unclear, but it would be a nasty and protracted fight.

So is UFS checkmated? No, for two reasons. First, committee chairs are appointed by the Board, and there’s no 2/3 requirement. See Art. V(1)(I)(4). The Negotiating Committee chair is in a position to strongly influence the conduct of negotiations.

Of course, this might not be enough, leading to a struggle between the chair and the committee members. Once again, is UFS checkmated? Once again, no.

That’s because there’s another way for the National Board to take control: it could dissolve the Negotiating Committee altogether and negotiate directly. Per Art. V(1)(I)(3), committees serve at the Board’s pleasure. That would appear to mean that the Board can dissolve the Negotiating Committee – and there’s no 2/3 requirement here either.

Moreover, per Art. V(1)(I)(4), the Board’s “delegate[ion] any of its powers and duties to a[] committee[]” is “revocable by the Board of Directors at any time.” Here too, there’s no 2/3 requirement. That means that, even if the Board can’t or didn’t dissolve the Negotiating Committee, it could strip it of its power to negotiate. The Board could then negotiate directly, which would mean that the new, moderate majority would have control of the process, albeit with, no doubt, plenty of interference from the MF back benchers.

If the Board were to do either of these things (dissolve the committee or strip it of its power to negotiate), the result could be unwieldy: the 70 member Board attempting to negotiate a contract would be quite a sight. As a practical matter, though, the Board might decide informally that certain people would take the lead. (Note, by the way, the President of the Guild would remain unchanged, since he’s not up for election until next year.)

In view of the unwieldy nature of the Board itself negotiating, the Board might be tempted to appoint a new Negotiating Committee with the same powers as the old one but new members. This would be an end run around the 2/3 rule and would be vulnerable to a challenge that it circumvented the rule. Alternatively, the Board could create a committee responsible for negotiation and some other functions, and delegate its power to that committee – i.e., a new committee with a different mandate that, among other things, includes negotiation. This would be awkward, but perhaps less so than expecting the entire Board to handle negotiations.

Amendment of the Constitution and By-Laws

Could MF amend the Constitution and By-Laws to block dissolution of the Negotiating Committee or other committees (for instance, requiring a 2/3 vote of the National Board to do so)? Unlikely. Under Art. XVIII(1), amendments can be effected either by a 2/3 vote of the National Board (Art. XVIII(1)(a)) or by a majority of the membership (Art. XVIII(1)(b)-(d)). If UFS and its allies win control (i.e., a majority) of the National Board, then MF won’t have a majority, let alone a 2/3 majority.

Alternately, MF could attempt to get the membership to amend the Constitution. There are several routes. They could seek a referendum of the SAG membership, per Art. XVIII(1)(b). However, a referendum may be called in only two ways, neither of which are likely. First, per Art. X(1), the National Board can call for a referendum. That won’t happen if UFS and its allies control the Board. Alternately, MF could attempt to initiate a referendum by petition, per Art. X(2). That takes a petition bearing signatures of 10% of the SAG membership, about 12,000 people. It’d be an expensive and difficult undertaking.

A second approach for MF, per Art. XVIII(1)(c), is a vote of the members at the Guild’s Annual Meeting, or at a special meeting. I don’t know when the next Annual Meeting is scheduled, so I don’t know the likelihood of an amendment being made this way. As for a special meeting, this could be called by the President, Art. VII(6). However, 15% of the Guild’s members is a quorum and would have to attend for any business to be done, unless the Board (by majority vote) waives the quorum, which they wouldn’t do if UFS and its allies control the Board and the purpose of the meeting was to amend the Constitution and By-Laws in order to dis-empower the Board from controlling negotiations.

Another approach for MF, also per Art. XVIII(1)(c), is a vote of the membership by mail, but only if the Board (by majority vote) calls for a mail vote, which, again, the Board would not do if UFS and its allies control the Board. Finally, per Art. XVIII(1)(d), MF would amend the Constitution and By-Laws “by the written assent of a majority of the membership.” The provision does not explain what this means, how it differs from a referendum, and how it works.

Conclusion

From the above, we can conclude that if UFS wins the requisite number of seats on the National Board, they and their allies in the other Divisions could take control of the negotiating process, notwithstanding rumors to the contrary.