SAG Update: More Mediator Meetings

SAG met last week with the federal mediator, as I previously blogged. The AMPTP, representing the studios, met with the mediator yesterday. SAG will be meeting with him again next Wednesday. That's a pace of one meeting a week. No word on whether the meetings will become more frequent.

Wardrobe Malfunction

Yesterday, Sarah Palin inexplicably returned to the topic of her $150,000 makeover, asserting that “Those clothes, they are not my property. …  I'm not taking them with me.”  This set me thinking, and I realized that Palin hasn’t gotten a fair shake on this affair – not from the over-educated blue state media, nor even from the thoughtful conservatives deserting her in droves like glaciers cracking under the stress of global warming. 

You’d expect this sort of abuse from high-brows in the Lower 48, of course.  Look at what just happened to poor Ted Stevens.  The Alaska Senator, whose taste apparently ran more to gas grills than fiery pantsuits, was convicted today by a Washington, DC jury of making false statements on Senate forms.  (As though anyone should care about such trifles.)  Non-Arctic Americans just don’t know how to give Alaska politicians a break.  Sadly, though, Palin’s attackers even include the Anchorage Daily News.  That paper has endorsed Obama, declaring Palin “too risky” a choice, like wearing white after Labor Day.

Anyway, let’s take a closer look at this tempest in a dressing room.  Palin may not know what the VP does, any more than Dan Quayle could spell potato(e), but at least she can see Russia from her state, which is more than Quayle could say.  The Bush doctrine may be foreign to her, but she knows more about speaking in tongues than most of the rest of us ever will, or will ever care to.  You can fault her on the issues, question her intelligence, call her ill-prepared, and point to various other irrelevancies, but when it comes to sartorial policy, Palin’s judgment has been as impeccable as her choice of colors.  Here’s why:

First, she got someone else – the RNC – to pay for the goodies.  In other words, she had the good sense not to waste her own money this way.  Now that’s the sort of steady hand we need on the tiller of government.  That’s the sort of parsimony not seen in Washington since Imelda Marcos came to visit.

Second, Palin helped Obama by soaking up $150,000 that the RNC could better have spent on TV buys and bumper stickers, and by diverting attention from the reasons to elect McCain-Palin, assuming for the sake of argument that there are any.  She helped her opponent.  That’s altruism of the highest order, even if McCain himself might not see it that way.

Third, by flaunting her good fortune – by accepting a makeover that could pay off many people’s mortgages – Palin has set a shining example of the American dream.  Who wouldn’t like to receive a treasure trove of clothing, or perhaps electronic gadgets, or expensive cars?  Pick your pleasure!  It’s all aspirational.  For those less lucky, well, let them eat cake.  Or baked Alaska.  It’s the American way.

Fourth, take note again of Palin’s latest remarks:  “I'm not taking them with me.”  (She meant the clothes, not McCain’s increasingly snippy staffers.)  Again, very sensible.  Only a fool or a Democrat would wear the same designer dress twice.  Scuff those pumps?  Out they go.  You can put expensive lipstick on this hockey mom, but she's not going to lose her common sense.

Fifth – we’re almost done here – it’s important to remember that not all the clothes were for Palin.  Some were for her family, all the way down to her infant son Trig, who can scarcely be expected to buy his own $92 rompers.  That’s Republican family values at their best – when you come into good fortune, make sure the entire family unit benefits.  Palin’s a religious sort, so ask yourself:  what would Jesus do?  It’s a hard question, since the answer is probably not “wear a dress and heels.”  In any case, this is a candidate who not only talks the talk, she walks the walk – and in pricey shoes, no less.

As we know, no good deed goes unpunished, and this story ends tragically:  The McCain apparatus announced over the weekend that much of the clothing has been or will be returned.  Thus, Palin gets the blowback, but not the blouse.  Deprived of this most personal of earmarks, she’s back to blue jeans and, hopefully, back to Juneau in a week as well.  But who knows – if her ticket loses, maybe she’ll snag a spot as a talking head on Fox, as some have speculated.  Then we can look forward to a new Sarah Palin, outfitted at network expense in clothing neither too cheap nor too pricey:  a wardrobe, in other words, that is as fair and balanced as Fox’s own coverage.  You betcha!

SAG Update: Union Meets with Mediator

SAG leaders met Friday with the federal mediator, and in a statement said that they discussed with him the union's request for mediation and "the possibilities regarding the resumption of negotiations." The AMPTP is set to meet with the mediator Thursday.

It's hard to be optimistic though: the two sides are very far apart, and both are very dug in to their positions, particularly on new media. Unfortunately, I expect mediation will fail by around mid-November, leading to the negotiating committee sending a strike authorization vote to the membership. That reportedly takes 30-45 days, suggesting that we could have a strike in January.

I'd guess a strike, if one occurs, would start before the Globes (January 11), and that (regardless of when the strike, if any, starts) SAG will attempt to reduce the Globes to the same sort of cut-rate press conference it did last year during the writers strike, when A-list actors promised to boycott the ceremony, leading to its elimination. The strategy would be to then threaten to do the same to the Oscars -- a threat that was one of the factors that led to a resolution of the writers strike, just a couple weeks before the telecast.

This time is different though, and the strategy has less likelihood of success. By February of 2008, the studios had achieved all of the upside they could get out of the strike: they terminated unproductive writer deals (through contract provisions called force majeure), did their deal with the Directors Guild first, and established the new media template they desired. All they faced was downside (destruction of the Oscars) if they didn't do a deal, and they faced no downside from doing a deal.

Here, though, the studios face, in their calculation, a downside if they do a deal on SAG's terms: they would be "rewarding" a very intransigent union and would be fracturing the new media template they've fought so hard for. Unions that accepted the template -- the Directors Guild and the smaller AFTRA actors union -- would have been in effect punished for their more accommodating style of negotiations. Moreover, the AMPTP would be giving additional ground in a significantly worsened economy.

For those reasons, there’s a significant possibility that the studios would accept destruction of the Oscars as a cost of doing business. There’s also the possibility that some, or even many, A-listers, few of whom appear to support a strike, would cross SAG protest lines and attend the Oscars. This would reduce the “cost” to the studios, as well as fracture the union.

This is the formula for a long and bitter strike. I hope, if and when an authorization vote goes to the membership, that they reject it. There are several steps between now and a potential strike, so there’s still hope that cooler heads will prevail. Unfortunately, there seem to be scarcely any at SAG, so the best hope is that the members resist the “educational campaign” SAG would wage, and vote against a strike if a ballot does go out.

AMPTP Agrees to Mediate

Not surprisingly, the AMPTP has agreed to attend sessions to be conducted by a federal mediator, as requested several days ago by the Screen Actors Guild.  

However, in today's statement announcing their position, the studios also reiterate that they won't budge from their position that the new media template agreed to this year by three other unions -- writers (WGA), directors (DGA) and rival actors union AFTRA (in two separate deals) -- should be good enough for SAG as well.  SAG, for its part, is equally adamant that the deal needs modification.  

Reportedly, no date has been set for the first meeting.  The mediator will be Juan Carlos Gonzalez, who unsuccessfully mediated the WGA negotiations just before the contract expired and the union decided to strike.  I doubt he'll have any more luck this time.  If nobody budges, I expect a strike by early January at the latest.  

Here's the AMPTP statement:

The Producers have demonstrated our willingness to bargain reasonably.  So far this year, we have reached four major labor agreements, and each one of these agreements has required compromise after compromise on our part.   We have also offered compromises to SAG already, in a package that includes more than $250 million in economic gains and groundbreaking new media rights.   We are, of course, willing to meet with a federal mediator in the hopes of achieving our fifth Guild agreement this year.   But we are also realistic:  It will be very difficult to reach an agreement if SAG continues to insist unreasonably that it deserves a better deal than the ones achieved by the other entertainment Guilds during far better economic times.

Movie Review - Saving Marriage

(Off-topic)

“Saving Marriage” sounds like another name for the No on Prop 8 campaign – the effort to save gay marriage in California from the reactionary forces across the country that are trying to snatch back this right, granted just months ago by the state Supreme Court. 

That’s  a Republican-dominated court, by the way, and the majority opinion was a 121-page scholarly document written by a Republican appointee.  So much for the canard that unthinking, knee-jerk activist judges (impliedly, Democrats) are on a mission to thwart the people’s will.

It’s a mixed time for gay marriage.  On the one hand, the California decision was a stirring victory and, what’s more, Connecticut just became the third state to legalize same-sex marriage, in a state Supreme Court decision released only days ago.  On the other hand, polls show Prop 8 is winning, probably due in part to the huge fundraising advantage the anti-gay forces possess, which allows them to run many more TV ads.  Passage would be an enormous setback.

Into this charged environment comes “Saving Marriage,” which is indeed a movie, not a nom d’campaign.  Thus, it’s not about the California campaign or the Connecticut decision.  Rather, it’s a documentary about the first state that legalized gay marriage – Massachusetts, five years ago.  There too, it was a decision by the state Supreme Court (called the Supreme Judicial Court, or SJC, in Massachusetts) that set the ball rolling.  As in California, there was much joy when the decision came down.

But what happened next was nail-biting:  two separate votes in the state legislature, spaced 18 months apart, that could have led to a ballot referendum to undo the SJC decision.  You already know the ending:  the anti-marriage effort failed, and gay marriage remains legal in Massachusetts. 

Yet, there’s significant drama in the film, due to the convoluted legislative procedure, and perhaps even more to the skill of the filmmakers – directors Mike Roth and John Henning, and editor Paula Gauthier.  By following several couples, politicians and activists throughout the process, the filmmakers focus on the very human meaning of what might otherwise be a series of parliamentary procedures.  For its part, the procedural stuff is rendered clearly and with little fuss by minimally-animated diagrams.

So – drama on-screen … and tears in the audience.  Although not a weepie, this is a moving film and an excellent job.  It played film festivals last year and is now in city by city release, courtesy of Regent Releasing.  See it, but skip the popcorn and make a donation to No on 8 instead.  That way, maybe we’ll get to see a sequel – the story of how same-sex marriage in California was saved from the clutches of its opponents.

90 mins., color, 1.33 aspect ratio, digital.  Rated PG-13 for brief strong language.

SAG Steps Toward Strike

The SAG national board passed a resolution yesterday on what to do regarding contract negotiations with the studios.  My take:  Membership First outmaneuvered the newly-elected Unite for Strength faction and its NY and regional allies and is taking the union down a path that may well lead to a strike.  I’m not optimistic.

The vote was almost 97% in favor, meaning that the resolution was a compromise between all concerned.  Yet it gives MF much of what it wanted.  The vote was taken right near the end of the meeting on Sunday (even though it was supposed to have been addressed Saturday), with Membership First knowing that the meeting had to end at 1:00 p.m. so that the NY and regional board members could catch their planes.  (This weekend’s meeting was conducted in person in LA.)

I think UFS acted to protect their chances of gaining additional board seats in next September’s elections.  Yes, those elections are almost a year from now, but politicos, even non-pros, think ahead.

Here’s the step by step process SAG authorized, and my analysis and comments.  Following this are the SAG and AMPTP press releases.

1.                  Request appointment of a federal mediator.

Comment:  Useless.  The parties are far apart on at least two of the three major issues – union jurisdiction in new media from dollar one, and residuals for all new media when played in new media for an extended period.  On a third of SAG’s major issues – force majeure – there’s probably room for compromise of some sort, or the studio’s might even abandon their hardline position if SAG give on other issues – but I’d anticipate no movement on this or other issues if SAG doesn’t abandon its efforts to change the new media template regarding the first two issues. 

Also, remember that appointment of a mediator in the WGA negotiations accomplished nothing.  A negotiator, having never worked in the entertainment industry, will struggle to gain credibility in the room and the understand the issues in detail. 

Moreover, the studios may threaten SAG and the mediator that they’ll roll back parts of the offer on the table.  This might particularly be true regarding the increase in minimums – i.e., the AMPTP will allude to 3.0% or even 2.5% rather than the 3.5% that AFTRA got.  Their justification would be the weakened economy.

Note that the resolution doesn’t say when a mediator would be requested, though I’d expect the next couple of days.

Of course, all this is assuming the studios agree to mediate at all.  They don’t have to, although refusal to do so would presumably trigger mailing of a strike authorization ballot (see paragraph 2).  Their apparently undecided as of this point.  The AMPTP press release doesn’t address the issue.  I’m told that the studios will be discussing the question over the next several days.

2.                  If and when the negotiating committee determines that mediation has failed, the negotiating committee is to send SAG members a strike authorization ballot and “educational information.”

Comment:  So the national board tossed this hot potato back to the negotiating committee – a possibility I wrote about several weeks ago – after the negotiating committee had tossed it to the board.  In any case, note that the resolution doesn’t say how long mediation would have to continue before being declared a failure.  However, I expect that if mediation occurs at all, it won’t last more than 2 weeks or so.  That takes us into early or mid-November.

3.                  Comment:  It takes a yes vote from 75% of those members voting in order to authorize a strike.  However, it doesn’t matter how few members vote – there’s no quorum. 

The “educational material” to be sent to members will, of course, assure the members that a strike authorization is a necessary tool for negotiation, and that it doesn’t mean there will be a strike.  Although that’s literally true, I think it’s misleading.  If the members authorize a strike, the national board will almost certainly vote to initiate one.

And, there will probably be no organized voices arguing for a no vote, other than the studios and, perhaps, the A-listers if they decide at long last to get involved.  Unite for Strength and its allies, by voting for the resolution, would be hard-pressed to argue for a no vote.  Also, if they did, they’d be branded traitors by Membership First, on the grounds that they were pushing to deprive the negotiating committee of a necessary tool. 

For these reasons, there’s a good chance that the membership will vote to authorize a strike.  This is particularly true if the turnout is low.  As a result, 8,000-10,000 members could take a 120,000 member union out on strike.

The voting process takes about 30 days, taking us into early to mid-December.

4.                  Comment:  If the strike authorization passes, then the national board could call a strike by a majority vote.  They might urge the studios one last time to recommence negotiations, but I doubt the studios will be willing to “reward” SAG for its hardline approach.  Thus, in mid-December, if this scenario plays out, the SAG leadership may call a special meeting of the board for early January, just after the holidays.  And at that meeting, UFS would be hard-pressed to argue against a strike, and the board would probably initiate a strike at that time.

5.                  Comment:  If there is indeed a strike, I think it will be long and bitter.  The studios will take the current offer off the table and, by the time the strike ends, SAG would probably not get more than what it could have gotten three months ago (if that).  Come next September, Membership First will blame AFTRA for having done a deal that undercut SAG’s leverage, and will blame Unite for Strength for its pro-merger platform.

6.                  The resolution also “adds four new members to the National Negotiating Committee, two from the Hollywood Division, one from the New York Division and one from the Regional Branch Division.” 

Comment:  This would changes the balance of power from the existing 9 Hollywood (all Membership First) v. 4 NY and regional to 9 Hollywood Membership First v. 2 Hollywood but not necessarily Membership First v. 6 NY and regional.  I.e., Membership First would have at least a 9 to 8 majority no matter what.

Also, although the resolution doesn’t say so, I’m told by sources close to the process that the new appointees will be alternates, not full members.  If this is the case, then MF would preserve its existing 9-4 majority.  In any case, as noted above, I think the negotiating committee will end up deciding to send out a strike authorization vote to the membership.

7.                  Comment:  Two topics apparently didn’t come up at the board meeting:  (1) Firing Doug Allen or removing him as chief negotiator; and (2) dissolving the negotiating committee and retrieving its power for the board itself.  With the current National Executive Director aka chief negotiator (Doug Allen), president (Alan Rosenberg) and negotiating committee chair (David Jolliffe) in the room, the likelihood of a successful mediation with the studios is low indeed.

———

Here’s SAG’s press release:

SCREEN ACTORS GUILD NATIONAL BOARD OF DIRECTORS VOTES TO REQUEST FEDERAL MEDIATOR AND SEND STRIKE AUTHORIZATION REFERENDUM TO MEMBERS IF NECESSARY

Los Angeles (October 19, 2008) – The Screen Actors Guild National Board of Directors today passed the following resolution at its quarterly plenary in Los Angeles:

“In hopes of moving the Theatrical and TV negotiations forward, the national board hereby takes the following actions:

SAG will formally request a federal mediator be brought into the negotiations.

The Board adds four new members to the National Negotiating Committee, two from the Hollywood Division, one from the New York Division and one from the Regional Branch Division.

The Board authorizes a referendum and accompanying educational information be sent to the members requesting their authorization for the National Board to call a strike in the Theatrical and TV Contract, at such time as the Negotiating Committee determines in its sole discretion that the mediation process has failed.”

Adopted 96.72% to 3.28%

Approval of the strike authorization would require 75 percent approval of members who vote.

“We hope mediation will help move this process forward. This action by the board demonstrates our commitment to bargain with the strength of our unified membership behind us. Economic times are tough for all Americans, but we must take a stand for what is fair,” said Screen Actors Guild National President Alan Rosenberg.

“Our number one goal remains securing a good contract without a strike,” said SAG National Executive Director and Chief Negotiator Doug Allen. “I am pleased by the board’s strong show of support for the national negotiating committee and look forward to meeting with the federal mediator and the AMPTP committee as soon as possible.”

Screen Actors Guild and the Alliance of Motion Picture and Television Producers (AMPTP) negotiating committees met for 44 days of formal negotiations and have not yet reached a successor agreement to the TV/Theatrical Agreement that expired June 30, 2008.

The board further resolved to add four new members to the negotiation committee, two from the Hollywood Division, one from the New York Division and one from the Regional Branch Division.

——————-

Here’s the AMPTP’s press release:

The AMPTP has successfully negotiated four major labor pacts with Hollywood Guilds this year, and we would like to close a fifth with SAG.  That said, there is simply no justification for SAG to expect a deal that is in excess of what the other Guilds negotiated in better economic times. No matter what SAG does - whether it be authorizing a strike or following a different approach - it will not change the harsh reality that currently confronts our industry.

Cal Prop 2 (farm animal confinement) interview

Learn more about California Proposition 2, regarding cruel confinement of farm animals.  Check out my interview below with a representative from the Yes on 2 campaign:

Can't see the video window?  Click on this link instead:

http://www.ustream.tv/flash/video/791198.  For more info, see my article Torture in the Henhouse.  And visit LookAtLA.net for more interview shows.

Torture in the Henhouse

(Note – off-topic.)

Online streaming video interview at LookAtLA.net – Yes on Prop 2 – tomorrow, Thu., 10/16, 2:00 pm Pacific / 5:00 pm Eastern.

I like my eggs scrambled.  That’s real comfort food:  hot, tasty, and hard to screw up.  An added bonus is the association with brunch.  Turkey bacon, scrambled eggs, and fresh-squeezed OJ is a great way to start a weekend day at a fun restaurant, surrounded by happy people.

Unfortunately, many of those people wouldn’t be so happy if they knew what the animals went through to get to the table.  I’m not.  Commercial farming often involves confining cattle, pregnant pigs and chickens to tiny cages in which the animals have no room to move.  According to the Yes on Prop 2 campaign, hens live for more than a year in a space smaller than a sheet of letter-size paper.  Then they're killed.  The LA Times reports undercover video released by animal rights activists that shows, in the paper’s words, “egg-laying hens crammed into filthy cages, while, nearby, discarded birds are left to die in piles of corpses.”

Prop 2 would change that in California.  It’s a modest measure, requiring only that calves raised for veal, egg-laying hens, and pregnant pigs be confined only in such a way that they can lie down, stand up, fully extend their limbs or wings, and turn around freely.  The primary industry affected is the egg business, since the other two are quite small in California.

The new statute would not require that these animals be free range – but granting farm animals the ability to move about, even while caged, is just basic decency.  The New York Times says as much in a strong editorial, stating that “The fact that such fundamental decencies have to be forced upon factory farming says a lot about its horrors.”  The Times urges a yes vote, and that every state enact such legislation.  I agree.

The LA Times has a different spin.  The editorial starts off strong:

The egg industry is rife with cruelty to animals. Millions of hens in California are kept in cages so small that every natural instinct is thwarted: They cannot perch, walk or spread their wings. On some farms, cages are stacked and hens on the bottom live in waste.

All creatures, even those bred to provide food, deserve to be treated humanely.

Surprisingly, though, the LAT then veers into cost benefit analysis, arguing that producing eggs in non-cage systems results in 25% higher prices to the consumer.  It’s unclear why this is the comparison, since the Act would not prohibit cage systems if the cages are large enough to allow movement.  Such cages would presumably result in a more modest increase in costs.

But leave that aside.  Leave aside also that the cost estimate was produced by researchers at a school, UC Davis, deep in the heart of ag country.  The real issue is whether we’re willing to treat farm animals with no more decency than the dirt they walk on, if they’re allowed to walk at all.  The NYT has an answer to this, and it’s spot on:  “No philosophy can justify this kind of cruelty, not even the philosophy of cheapness.”

For more information, watch my online streaming video interview at LookAtLA.net with a representative of Yes on Prop 2.  It airs tomorrow, Thu., 10/16,at  2:00 pm Pacific / 5:00 pm Eastern.  I invited No on 2 as well, but they never got back to me with availability of a representative.

SAG Stalemate Update

Here's the latest with the actors:

Variety reports that the major studios are prepping "40 or more" films to go into production starting this coming spring, so that they'll have product for 2010 and 2011.  Although there's the risk of a strike starting this year and continuing through the spring, there's also the certainty that if they don't start production, they'll have no product in the pipeline come 2010.

Implicit in the story is the assumption that production intended for 2009 release is complete.  It's unclear to me if this is true.  Earlier reports, if I recall correctly, had suggested that summer 2009 was ok but that fall 2009 was not.  Also, remember that the studios and networks claimed during the run up to the writers strike that they had banked enough TV scripts to not be affected quickly by the strike.  That turned out to be spin, as shows started going dark earlier than predicted -- a month or so into the strike, if memory serves.  So it's unclear if some of this is spin.

Next news is likely to come next weekend (Oct. 18-19), when the SAG national board meets.  Items on the agenda will include whether to send a strike authorization referendum to the members.  Possible also will be discussion of whether to change or dissolve the negotiating committee and future of the National Executive Director, Doug Allen. I don't know whether these latter two items will indeed be brought up, but it's logical.

If an authorization does get sent out (which I think is a distinct possibility), the earliest that results would come in would be mid-November.  A strike would then require a vote of the board. That, in turn, would require a special meeting, I believe.  Thus, I wouldn't expect a strike at the earliest until sometime after that -- perhaps December, in light of the Thanksgiving holiday at the end of November.  Or, SAG might try to reopen negotiations, then strike in January, after the holidays.  A nice way to begin the new year perhaps?

It's astonishing to think that SAG might strike during what analysts increasingly consider the worst economy in 80 years, but it's possible.  The hardline Membership First faction and SAG leadership are itching for a strike to dislodge the studios' refusal to give on new media, and the moderates (the Unite for Strength faction, plus the New York and most/all regional board members) have been silent so far.  It's unclear how the latter group will handle the board discussion in two weeks regarding a strike authorization.

Phase One Reanimator

Aieee, it’s alive!  Remember Phase One?  That’s the 27 year old joint bargaining arrangement between SAG and AFTRA that collapsed this spring, leading to AFTRA making a separate primetime TV deal with the studios and networks and SAG sliding into a stalemate, leaving it with no deal after unsuccessfully trying to defeat AFTRA’s.  Hostility abounded.

With all that, Phase One appeared to be a dead letter, although officially it was only suspended or something like that.  Now it seems Phase One may not be so dead after all.  The SAG and AFTRA commercials contracts expire March 31, 2009 (extended from October 31) and AFTRA has taken a step towards joint negotiation, approving a deal that would set conditions for joint bargaining with SAG under Phase One.

Of course, the devil is in the details.  The AFTRA press release did not include the terms of the agreement, saying that they were confidential until the SAG National Board acts on them.  That meeting is scheduled for October 18. 

In any case, AFTRA noted that the agreement was facilitated by the AFL-CIO, which is a good sign, and Back Stage magazine’s Blog Stage blog says SAG approval is likely (though no source or explanation is offered for this, so the basis for the conclusion is unclear). 

In another surprising touch, AFTRA National President Roberta Reardon commented to Blog Stage that “I do have to commend President Rosenberg and Doug Allen [SAG's national executive director] for working hard on this.”  That’s probably the nicest thing either union has said to the other all year.  Let’s hope the spirit of comity continues, and the unions can negotiate together.

Of course, the town’s more immediate concern is whether SAG will go on strike against the studios and networks.  (In contrast, the commercials contracts are negotiated with associations of the major advertisers and ad agencies, a completely separate group.)  It looks like Reardon shares that concern, telling Blog Stage that it would be difficult for SAG to negotiate a commercials deal while simultaneously waging a strike but “you still have to prepare.”  Indeed.

Report: SAG Strike Would Have No Immediate Credit Impact on Entertainment Conglomerates

Fitch Ratings, a leading global rating agency that rates the credit of large businesses, municipal governments, and entire industry sectors (they must be very busy these days), has produced a short analysis of the effect of a possible SAG strike on the credit ratings of media conglomerates.  Their conclusion:  “limited impact … over the short-term of six to nine months.” 

The analysis is less explicit on the effect of a long strike, but appears to suggest that it too would not have great effect on the conglomerates, but would hurt theatrical exhibitors and TV broadcasters.  This seems contradictory:  if the latter two sectors are affected, then so would be the upstream studios, and therefore their corporate parent conglomerates.  Fitch estimates that studio and network operations account for roughly 20%-40% of conglomerate revenue, depending on the conglomerate, so it’s hard to see why the effect would be immaterial.  Of course, some impact would be diluted by a further shift to reality programming (which is either non-union or AFTRA).

Another question mark:  Fitch says that it assumes that most 2009 films are already in the can.  However, the general feeling in Hollywood seems to be that although summer 2009 production is complete, fall 2009 is not.  I don’t know of any definitive analysis of this, however. 

Also unclear, and unmentioned by Fitch, is whether fall 2009 could be filled out by acquisitions from Sundance, Tribeca and Cannes.  My experience at these festivals is that a lot of the films screened there are not particularly commercial, which limits the prospects for such acquisitions no matter what the need in the fall.

This all suggests that a strike might have to last 6-9 months, or perhaps more, before the studios might be willing to compromise on jurisdiction and residuals related to original productions for new media, the key roadblock.  The cost of such a strike in lost wages would be enormous for actors, and, presumably, for the local economy, and the effect on SAG would be to further drive television production to AFTRA. 

In contrast, the benefits of a strike would be sparse:  a small increase in revenue over the next three years (a period during which original production for new media is not likely to generate much revenue), and less likelihood of having to fight a bad new media precedent in future negotiations (i.e., three or six years from now), when there may start to be significant new media revenue at stake. 

The obvious question is, why not strengthen SAG through member organizing and inter- and intra-union fence-mending, then fight (and possibly strike) in 3 years, a time when the stakes may be meaningful, the economy may have improved, and actors and others won’t be suffering from post-writers strike fatigue.  That’s a question to which SAG seems to have no convincing answers, and thus we careen towards a possible strike for no good reason. 

Note:  The Fitch analysis did not review GE (NBC Universal), because Fitch (for unknown reasons) does not cover GE, nor Sony, because it’s not U.S.-based.

SAG: Toss that Hot Potato Back (UPDATED)

As I blogged yesterday, SAG’s negotiating committee has the power to send a strike authorization referendum to the membership at large, but it instead punted to the national board. In other words, the negotiating committee recommended that the national board send out such a referendum.

Ironically, SAG’s negotiating committee was granted this power by the very national board that it has now punted to. And, I understand, the power was granted just a few months ago.

What’s more, the negotiating committee is controlled by the hard-line, pro-strike Membership First faction (as was the national board at the time). So why didn’t they just vote to send the authorization referendum to the membership?

Answer: pure, craven, cowardly politics. By punting to the national board, Membership First has seemingly mouse-trapped the new, moderate members of the board. Those members, from the Unite for Strength slate, have a razor-thin majority on the board if they maintain solid support from the historically-moderate New York and regional members of the board.

Here’s the trap: If UFS votes against a strike authorization, then MF will accuse them in next September’s elections of having sold out the guild and caused the guild to have to accept a bad deal. On the other hand, if UFS votes for a strike authorization, then they’re vulnerable to the charge from their own supporters that they’re a mere echo of MF, or unskilled pawns. And they take the guild one step closer to an ugly, protracted strike that will probably lead the guild at terrible cost to a deal no better, and quite possibly worse, than the one on the table now.

Astonishingly, UFS has been silent in the face of this, as I alluded to yesterday, and Andrew Salomon forcefully discusses in an excellent piece called The Inexplicable Sounds of Silence. If UFS wants to be seen as a true choice, not a hollow echo, they need to be front and center now. They need to speak out.

And what should UFS do in the national boardroom on the 18^th — which way to vote? My recommendation: make a substitute proposal. For this, I’m indebted to an offhand comment by Voiceguy to my post yesterday. His suggestion: “Maybe the National Board should send it right back to the Committee: ‘We told you before that you had this authority, so if you want to use it, go ahead and use it. Don't push it back to us.’”

I think Voiceguy is exactly right. UFS and its allies should call MF’s bluff and toss the hot potato back in their hands. If MF wants a strike, let them own it (a point Salomon makes as well).

UPDATE — It appears UFS isn’t going to follow this suggestion. Ned Vaughn emailed me this brief statement: “The matter of a strike authorization is now in the hands of the national board and that’s where it will be dealt with. It wouldn’t be appropriate to comment on it further at this time.”

SAG: A Half Step Closer to a Strike

SAG moved closer to a strike today, but not quite as far as some predicted. The guild’s negotiating committee, which has the power to send a strike authorization referendum to the membership at large, instead elected to recommend to the national board that it send out such a referendum.

That board is sharply divided, with a newly-elected Hollywood moderate group, coupled with their New York and regional allies, having a razor-thin margin of control. But that faction, Unite for Strength, may not be united on the issue of strike authorization. They ran on a platform of merger with AFTRA, and didn’t address how they’d approach negotiations.

The new members are also less experienced in the parliamentary procedure used by the 71-member national board, and they’re up against the fact that the board is chaired by the guild president, who’s aligned with the hardline Membership First faction that also controls the negotiating committee – and other levers of power, such as the National Executive Director and the separate Hollywood board.

But perhaps the toughest problem for the Hollywood moderates is that if they oppose a strike authorization, they risk being blamed by Membership First in the next elections (11 months away) for the flawed deal that SAG will probably have to accept under any circumstances.

Thus, it would come as no surprise if the national board voted to send a strike authorization to the members. That authorization would require an affirmative vote from 75% or more of those voting in order to pass. (Note — not 75% of the total SAG membership, as some outlets have mistakenly reported.) If the turnout is low, as it was for SAG’s push poll (10%), SAG might achieve that threshold — as it did with the push poll (87%), albeit on a different question (whether to keep negotiating, not whether to strike). The board might then vote to take the union out on strike even if only a few thousand members voted for it.

It seems bizarre that SAG might strike over gaps in the new media template, since the medium will account for very little revenue over the next few years — and the gaps will, accordingly, probably be of little consequence over the next three years — and do so even as the economy as a whole deteriorates, but that’s entertainment, apparently.

SAG Apparently Seeking Strike Authorization

Lewis Carroll was a master of bizarre fantasy, willful illogic, and headstrong characters. Not surprisingly, that often makes his shape-shifting prose relevant to present-day concerns. Consider Alice’s fall down the rabbit hole:

The rabbit-hole … dipped suddenly down, so suddenly that Alice had not a moment to think about stopping herself before she found herself falling down what seemed to be a very deep well.

Either the well was very deep, or she fell very slowly, for she had plenty of time as she went down to look about her, and to wonder what was going to happen next. …

Down, down, down. Would the fall never come to an end?

– Lewis Carroll, Alice’s Adventures in Wonderland

If we were focused on the broader world, we’d note how woefully applicable this passage is to the current economic crisis — will the fall never come to an end?

Or we might look at the sorry state of politics, and ruminate on how we’ve fallen from a potato(e)-head VP (Dan Quayle) to a frat-boy boob of a president, and now to a VP candidate who was mayor of almost nothing just two years ago. Again — will the fall never come to an end?

Our focus is SAG, however, but the question is still relevant. The Hollywood Reporter is reporting that SAG’s negotiating committee will probably approve a measure today asking the guild membership for a strike authorization. Variety is less sure, referring to “speculation” along these lines. But if the Reporter is accurate, we’re off on a journey deeper into Wonderland.

Now, whether an authorization will pass is unknown: 87% of members responding to a guild survey said the guild should keep negotiating for a “better” and “fair” contract, but that’s not the same as saying they’re willing to strike over it — and, critically, only 10% of the guild’s paid-up members even bothered to return the survey.

The other 90% didn’t care enough to return the survey, and many of them are probably sick of guild politics and may not want a strike. Whether they’ll bother to vote is another question, and thus we face the possibility of the 120,000 member guild striking based on the vote of just a few thousand members. That has a rather Carrollian illogic to it.

Then there’s the matter of the subject of the strike: SAG wants to fill some gaps in the new media template agreed to by the Directors Guild, Writers Guild, and AFTRA (twice). Fair enough, except that there’s little money in new media today, and there’s unlikely to be much for the next few years. Thus, those gaps have little immediate impact — and may never, depending on how new media business models evolve. Why not wait, and strike (or threaten to do so) in three years, when there may be more money at stake? Why now?

That, in turn, brings us to the subject of “now,” and back to the economy. Banks are busy failing, housing prices are deflating, and gas prices, though off a bit, are still quite high. Congress seems more capable of running from the problem than solving it, and economists are debating whether this is the worst crisis in 20 years, or in 75.

Into this nerve-wracking landscape strides SAG, apparently willing to trigger a second Hollywood strike in less than a year — i.e., to risk losing real money, and, no doubt, some people’s homes, for the sake of precedent that could be argued over in three or more years, when it really matters. It’s true that precedent, once installed in Hollywood union agreements, is hard to dislodge, but it still seems illogical — in a sort of Carrollian “verdict first, trial afterward” fashion — to strike over issues as incremental and, to date, speculative, as these.

SAG’s appears to be playing a dangerous game: Seek an authorization and fail to obtain it, and the guild’s leverage collapses. That’s a real risk, because an authorization requires 75% yes vote of those voting. With failure comes the possibility that the studios would withdraw the offer on the table, and substitute an inferior one. That’s glory for you, as Humpty Dumpty once remarked.

Seek an authorization and obtain it, and the next step is a vote of the guild’s national Board — controlled now by the newly-elected moderates (Unite for Strength) and their allies in New York and the regional branches. But they’ve only got a razor thin margin, susceptible to disruption by the hardline Membership First faction. What’s more, it’s unclear if UFS would take a stand and oppose a strike. Their leader, Ned Vaughn, was vague when I asked him about negotiating strategy in August (and he hadn’t returned my call seeking comment by the time I wrote this article). Membership First, in contrast, is quite decisive, and its certitude might carry the day: The Board might indeed call a strike if the members grant it the authority to do so.

But if a strike does happen, then what? The studios are unlikely to back down on the new media template they’ve set. The result is likely to be a long, bitter strike, with the possibility that SAG will end up with a worse deal than it’s being offered now. Of course, SAG might prevail. That’s what the hardliners are betting, in any case.

You may be wondering why UFS would even permit the Negotiating Committee to seek a strike authorization in the first place. Answer — they may not have a choice: Membership First still controls many aspects of the guild, including the Negotiating Committee. Moreover, the first national Board meeting isn’t until the 18^th. That’s probably the first time the moderates could take a decisive stand, if they’re inclined to do so. (There’s a Hollywood Division board meeting next Monday, the 6^th, but Membership First still controls that board.)

In other words, today’s vote (if it takes place as the Hollywood Reporter predicts), is a preemptive strike by Membership First against the new, moderate majority — yet another symptom of the guild’s bitter divisions. Now we’ve left Alice behind, and entered the world of the Italian Renaissance — in particular, the world of cutthroat political strategist Niccolò Machiavelli — and that of the ancient Greeks, who coined the word “hubris,” a word that surely applies to an attempt to thwart the will of SAG voters. Sometimes a rabbit hole leads to Wonderland, but other times to a place far more dangerous. Will the fall never come to an end?