SAG TV/Theatrical Ballots Later Than Expected; SAG Litigation Continues; and More

The ballots for SAG’s recently approved TV/theatrical contract won’t be going out until mid to late May, a source tells me, several weeks later than the early May target that the Guild stated as recently as a week or so ago. That means that ratification, if achieved as expected, will not come until early to mid June, since balloting is expected to be a three week process. UPDATE: The ballots will go out May 19 and are due back June 9, SAG announced today.

The source, who spoke on condition of anonymity, explained that writing the pro and con statements has only just begun. That process takes a week, and then another week is allowed for rebuttal statements to be written.

(BTW, a copy of the proposed TV/theatrical agreement is available here. I’ve not yet done an analysis, but in the meantime you can read SAGWatch’s.)

Meanwhile, ballots for the commercials contract will be mailed to both SAG and AFTRA members Thursday, and due back May 21, reports Variety. It’s expected to pass easily. In contrast, the TV/theatrical contract will probably pass with a yes vote in the 60%-75% range, roughly in the neighborhood of the AFTRA deal, which achieved 62%. Only a simple majority (i.e., just over 50%) is required.

In other SAG news, Unite for Strength revealed in a Facebook email several days ago that the force majeure compromise is 33 cents on the dollar. “Force majeure” refers to arbitration claims on behalf of about 500 actors for a portion of wages lost due to the 2007-2008 Writer Guild strike. The claims amount to about $63 million, and, thus, the total settlement is about $21 million. The compromise goes into effect if the TV/theatrical agreement is ratified. Each company can opt out on a company-wide basis if they wish. SAG members will receive checks from those companies that don't opt out several weeks after the agreement is ratified, I'm told.

That settlement amount—33 cents on the dollar—is on the low side, but that was a tradeoff. SAG wants its contract to expire in mid-2011, to synch up with the WGA, AFTRA, and DGA. That’s an issue created by the ten-month delay that the hardline Membership First faction inflicted on the union; without the delay, the deals would have synched up as a matter of course. To get synchronicity at this late date, SAG had to give something up.

Remember also that the claims are under arbitration. SAG could have gotten zero cents on the dollar if the arbitration had proceeded; or it could have prevailed altogether. With that much uncertainty, a settlement in the 50% range might have been expected. That would have yielded a total of about $31 million, rather than $21 million. So, it’s a reasonable conclusion that SAG gave up about $10 million in order to get the synchronized expiration date—and prompt payment to the affected members.

The Guild also had to agree to modify the TV-related force majeure language in a way that reduces the likelihood of future force majeure claims. To put this in context, though, I’m told there has never been an industry-wide force majeure claim before. The studios obviously want to avoid seeing one again, not only to reduce their costs, but also to decrease the strength by which SAG members would support a writers strike in the future. (In other words, if actors have to bear the entire cost of their own lost wages, they may be less likely to enthusiastically support a strike by a sister union.)

Speaking of lost wages, I also have a couple of factoids on the SAG layoffs: the total number of people laid off was 36 (not 35, as previously reported), with an additional 26 unfilled positions that will remain unfilled. That’s a total reduction in force of 62 positions, and the annual savings to the Guild is $2.5 million in salaries ($4 million if bonuses and other factors are included).

Moving from lost wages to lost causes, there are developments in the lawsuit filed against SAG by the union’s own president, Alan Rosenberg, and his fellow Membership First plaintiffs 1st VP Anne-Marie-Johnson and board members Diane Ladd and Kent McCord. That suit, as you may rather have forgotten, seeks to unseat the TV/theatrical negotiating task force, as well as interim National Executive Director David White and Chief Negotiator John McGuire. That group—plus the commercials negotiating committee—is the team that managed to close two deals in as many months, while MF closed nothing at all over several years.

The lawsuit, in my opinion, hasn’t got a Popsicle’s chance in hell. After all, what judge is going to unwind a twice-ratified union leadership change? Incredibly, the lawsuit proceeds on not one but two tracks, since there are now both a trial court action and a concurrent appeal. Rosenberg’s and his co-plaintiffs’ solicitude for the members apparently includes spending their money on pointless multi-pronged litigation—understandably, since abandoning the litigation before this summer’s SAG election would be no boon to MF’s election prospects. Indeed, if MF ever wins control of the Board again, you can expect a motion to have SAG reimburse Rosenberg et al. for their no doubt considerable litigation costs.

In any case, there are developments on two fronts. In the trial court, SAG filed its Answer to the plaintiffs’ first amended complaint. A variety of defenses are asserted, including that the complaint is moot (because the SAG Board re-fired the previous NED, Doug Allen, at a meeting, after having first done so by a written assent document), interferes with the union’s right of self-governance, and is barred by the wrongful acts of Rosenberg and his co-plaintiffs (this presumably refers to the 28-hour filibuster over which Rosenberg presided in an attempt to prevent Allen from being fired).

Meanwhile, in the Court of Appeal, Rosenberg & co. filed their Appellant’s Opening Brief several days ago, accompanied by multi-volume, multi-hundred page appendices of documents. The arguments are simply a rehash of the arguments Rosenberg and his co-plaintiffs made in the trial court–which were rejected not only by the trial court judge, but also in an earlier appeal. Yes, the current appeal is actually the second, and the case is only three months old.

What next? As the name implies, the Appellant’s Opening Brief is the first brief in the appeal. The next few weeks will see the filing of the respondent’s brief (SAG’s brief) and the reply brief (in which Rosenberg et al. get to reply to SAG’s brief). Then comes oral argument, unless the court decides to proceed based on the briefs alone (which I think the court has the right to do, but I’m not sure).

For those who find appellate work dry and lifeless (it’s all briefs and legal arguments, with no witnesses or jury), the trial court action will grind on as well, doubtless with demurrers, a motion to dismiss, motions for summary judgment, depositions, interrogatories, requests for production of documents, and all of the other costly accoutrement of modern-day litigation. Actually, that’s pretty dry and lifeless too. This could go on for months, providing amusement to everyone except SAG’s accountants. As in entertainment, so too in litigation: the show must go on.

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SAG Cutting Staff by 8%

Because of a budget shortfall, SAG's cutting its staff by 8%, or 35 people out of 440, report the trades, LA Times and blogs (see SAGWatch for links). No word on whether any top-level staffers will go. One source said that all names known internally are clerks and similar staffers.

The budget shortfall is allegedly due in part to uncontrolled spending by SAG while it was underMembershipFirst control for the last several years, according to a report on SAGWatch. The larger economic crisis is no doubt another factor.

That 8% figure is about the percentage several studios have cut recently as well. The trades (Variety and Hollywood Reporter) and LA Times have cut as well, the latter even more significantly. Day jobs such as waiters, temps and personal trainers are down as well, as one of the trades recently pointed out (apologies - I don't remember which one). Dark days in Hollywood.

SAG Board Approves Studio Deal

Voting on party lines, a sharply divided SAG board approved the tentative deal with the studios yesterday by a vote of about 53% to 47%. The deal now goes to the membership for ratification, with a bruising fight promised by the hardline MembershipFirst faction. Ratification is nonetheless expected, and will mark an end to an almost ten month Hollywood stalemate.

Ballots will go out to the members in early May and will be due back three weeks later. The balloting material will be accompanied by both pro and con statements, and the fight over the deal will be a prelude to SAG’s presidential and board elections, which will commence in July and run through September. Current SAG president Alan Rosenberg has come out in opposition to the deal, while Ned Vaughn, leader of the moderate Unite for Strength group, told Variety that he favored a yes vote.

Although the deal is expected to be ratified, it won’t achieve the over 90% thumbs-up that the Writers Guild deal did last year. An approval in the 60%-70% range seems more likely, given that the AFTRA deal last year achieved only 62%, as a result of an ultimately futile anti-ratification campaign conducted by SAG.

Details and analysis of the deal are available here, and below are press releases from SAG, AFTRA (a rival actors union) and the AMPTP (the alliance representing the studios).

On a personal note, I had a surreal experience outside yesterday’s board meeting. As I talked to a board member who discussed his/her vehement opposition to product integration (a form of product placement, and an issue on which the new contract gives nothing to actors), another board member walked up and handed me a can of energy drink. I looked over and saw a marketing truck painted to look like a can of the drink and blaring rock music. In other words—product placement at SAG’s own board meeting! A bit of a surprise.

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SCREEN ACTORS GUILD NATIONAL BOARD OF DIRECTORS APPROVES TENTATIVE TELEVISION AND MOTION PICTURE CONTRACTS AND RECOMMENDS RATIFICATION

Los Angeles (April 19, 2009) – The Screen Actors Guild National Board of Directors today voted 53.38 percent to 46.62 percent to approve and recommend to members, new, two-year successor agreements to the 2005 Producer-Screen Actors Guild Codified Basic Agreement and 2005 Screen Actors Guild Television Agreement.

The proposed agreement, covering actors in motion pictures and television delivers 3.5% effective annual increases comprised of a 3% wage increase and a .5% pension and health contribution increase upon ratification, and a 3.5% wage increase in year two.

The board passed the below motion shortly after 4:00 p.m. today:

It was moved and seconded that the National Board directs the Interim National Executive Director to send the tentative agreement between the Producers represented by the AMPTP and the Screen Actors Guild for successor agreements to the 2005 Producer–Screen Actors Guild Codified Basic Agreement and the 2005 Screen Actors Guild Television Agreement to the membership for ratification, with a recommendation from the Board to vote ‘Yes.’
Approved: 53.38% –46.62%

“I urge members to carefully review both the pros and cons in the referendum materials, and exercise their right to vote,” said Screen Actors Guild National President Alan Rosenberg.

Interim National Executive Director David White said: “We are pleased that Screen Actors Guild members will soon be voting on a deal for television and motion pictures. We’re eager to get our members back to work and to focus now on the challenges ahead, particularly on initiating a comprehensive effort to thoughtfully plan for the future.

Our negotiating committee, task force and professional staff have worked countless hours on this agreement over the last year. On behalf of the National Board, I thank them for their time, commitment and expertise.”

Chief Negotiator John McGuire stated: “This tentative agreement delivers increased contributions to the SAG pension plan, increased minimums, a significant gain in background actor numbers from 50 to 55 over the term of the contract, and it tracks the new media provisions achieved by other entertainment industry unions. The term of the agreement puts SAG in sync with the other unions, and does not include the extended term recently proposed by the AMPTP.”

Provisions of the proposed deal include:
• A two-year term of agreement concluding June 30, 2011.
• Effective annual increases comprised of 3.0% in wage increases and .5% in pension contributions upon ratification, and a 3.5% wage increase one year following ratification.
• A new media structure that tracks those achieved by other industry unions, resulting in gains for actors including:
o Jurisdiction on all derivative, made-for new media productions; automatic jurisdiction on all high-budget, original, made-for new media productions; plus jurisdiction on low budget original, new media productions that employee at least 1 covered performer.
o Residuals for exhibition of TV and Theatrical motion pictures on consumer pay platforms (Electronic Sell Through) at a greater percentage than those paid for DVD distribution.
o Residuals for ad-supported streaming of feature films and television programs.
o Residuals for derivative new media programs.
• Additional 5 covered background actors in feature films. From 50 to 53 covered background positions upon ratification of the contract, and from 53 to 55 covered background positions in year 2. Adds 1 covered background position in TV, from 19 to 20, upon ratification.
• Increased compensation for guest star premium from 7.5% to 10%.
• Increased trailer money break from $2,500 to $3,000, or more per week.
• Increased overtime money break for three-day performers from $2,700 to $3,000.
Ratification ballots will be mailed to eligible SAG members in early May, with an expected return date at the end of the month. Tabulation will occur immediately upon the conclusion of balloting.
Bargaining for a successor agreement to the 2005 SAG TV/Theatrical Contract began on April 15, 2008.

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AFTRA Statement Regarding New Screen Actors Guild Film and Television

Agreement

The American Federation of Television and Radio Artists issued the following statement by President Roberta Reardon regarding the announcement that the Screen Actors Guild National Board has approved a tentative agreement with the Alliance of Motion Picture and Television Producers on a new SAG film and television contract.

“AFTRA congratulates our sister union, Screen Actors Guild, on its new tentative agreement with the AMPTP. I applaud the SAG Negotiating Task Force for bringing a strong contract to the SAG National Board for approval, and I commend the SAG National Board for its leadership in approving and recommending this contract for ratification by their membership.”

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Statement by the AMPTP

The new AMPTP-SAG agreement is the eighth major labor agreement reached by AMPTP since the start of 2008 and the 312th such agreement in AMPTP’s 27-year history. Because both sides were willing to compromise we now have an agreement that will provide SAG members with meaningful wage boosts, pension increases, first-class health benefits, and a complete set of new media rights and residuals. With this agreement in place, our entire industry can work together to overcome the enormous economic challenges before us.

SAG & Studios Agree to Tentative Deal

The Screen Actors Guild and the AMPTP (alliance representing studios and producers) reached tentative agreement yesterday on a two-year TV/theatrical contract, potentially ending a ten-month stalemate that halted production of most studio movies and put thousands of people out of work.

The deal will probably be approved by the SAG board today or tomorrow and ratified by the membership by mid-May, but the hardline MembershipFirst faction has vowed to fight the deal, so ratification, although likely, is not assured. Assuming the deal is in fact ratified (which takes a 50% majority), the stalemate would be over by mid-May. Some production might resume before then, in anticipation of ratification, but this is unknown.

In separate news today, the SAG and AFTRA boards meeting jointly approved the commercials contract reached April 1 with the advertising industry. Ratification ballots will go out to the members of both unions next week, with a return date in mid-May. The deal has wide support among the leadership and is expected to pass easily.

Back to the tentative TV/theatrical deal: Critically, this deal would expire on June 30, 2011, effectively synchronizing it with the Writers Guild, Directors Guild and AFTRA (smaller actors union) deals. That means all four unions will be able to coordinate negotiations and strategy, even to the point of threatening a joint strike by two (WGA and SAG) or three (WGA, SAG and AFTRA) of the unions. (The DGA has essentially never gone on strike, and AFTRA seldom does.)

This synchronicity should give the unions significant leverage, which raises the question of why the studios agreed to it. Probably they needed to restart theatrical film production soon in order to have movies for 2010. That would seem to be the only pressure point SAG had, since the union was widely understood to be unable to strike (a strike authorization would have taken a 75% affirmative vote of those voting, and the union didn’t even seek such a vote for fear of failing).

The gain—synchronicity—came at a price to SAG, however. The new deal compromises the force majeure claims SAG has pending from the 2007-2008 WGA strike. These are claims by actors for lost wages due to the strike, and amount to tens of millions of dollars. It’s unknown as yet how much will be foregone. Also, since the claims were the subject of a pending arbitration process, it’s unknowable how much SAG would have gotten if it had continued to pursue the claims. Thus, it’s hard to calculate the dollar cost of the compromise. The new deal also modifies the force majeure language in the union contract, but the details are unknown.

The deal includes no changes in new media from the AMPTP’s February offer, according to sources. That offer, in turn, is essentially the same as the new media provisions that the DGA, WGA, and AFTRA (in two separate deals) agreed to. (IATSE’s new media provisions are similar in several respects as well.) No change was expected by anyone, yet, ironically, new media was the reason the hardliners stalemated for ten months in a futile attempt to improve on the template accepted in the other five union deals.

The deal will take effect upon ratification, and includes an immediate 3.0% increase in minimum pay rates plus a 0.5% increase in pension and health contributions. A year later, there will be an additional 3.5% increase in minimums, which will run through contract expiration.

In contrast, AFTRA members have been enjoying a 3.5% increase for the last ten months (when AFTRA did its deal), and will receive their 3.0% + 0.5% bump on June 30 of this year. That means that for virtually the entire contract period, AFTRA rates will be about 3.5% higher than SAG’s. In other words, the new deal does not give SAG a double increase in order to catch up with AFTRA.

If SAG wants to ever catch up, they’ll have to seek a double increase in 2011, but that will involve giving up some other issue that SAG would otherwise have negotiated for, and in any case a double increase in 2011 would not be retroactive to the 2009-2011 period. This is part of the damage that the hardliners inflicted on the union.

Speaking of retroactivity, that’s an element that, not surprisingly, this deal doesn’t include either. That means that SAG actors who worked in TV over the last ten months will not receive makeup payments to bring them up to higher minimum pay levels that they would have received if the deal had been done promptly. This also is a result of the delay that MembershipFirst caused by not making a deal almost a year ago. And, of course, the whole issue of expiration date was caused by the hardliners’ delaying tactics.

The deal next goes to the SAG national board tomorrow for approval and then to the members for ratification over a several week period. SAG hardliners will fight the deal—SAG president Alan Rosenberg, 1^st VP Anne-Marie Johnson, and former Hollywood board member David Jolliffe are among those who have already spoken in opposition—but I expect it to pass, although not with the over-90% margin the Writer Guild deal did a year ago. The deal will almost certainly go out to the members with a minority statement in opposition. Nonetheless, people are sick of not working and will probably agree that the deal was the best obtainable in a bad economy and with SAG weakened in large part by the hardliners themselves.

One thing that’s clear is that this is a time of enormous change for the Hollywood actors unions. Most immediately, actors have a lot to vote on over the next several months: the commercials contract, the TV/theatrical contract, the AFTRA Board elections, and then the SAG presidential and Board elections, the latter of which are expected to run from July through September.

In addition, several of the Hollywood unions’ pension and/or health plans have made cutbacks (AFTRA, AFM, and IATSE), due to the stock market collapse and to the continued increases in health care costs. Also, SAGWatch reports today that SAG itself is in difficult financial straits, due to MembershipFirst’s mismanagement: loss of union dues due to the production slowdown over the last 10 months, departure of television work to AFTRA due in large part to SAG’s internal strife, the expenses of futile battles with AFTRA and internally, and, most significantly, alleged bloated hiring practices that added 100 staff members to the union payroll. Layoffs are apparently expected, and the LA Times is reporting today that the union has a deficit exceeding $6 million.

SAG’s new leaders have difficult work to do on various other contracts that expired or were ignored on MembershipFirst’s watch, including the franchise agreement between SAG and the town’s talent agents, which expired seven years ago. Then there’s the perennial question of SAG-AFTRA merger, which will probably be a factor in the upcoming SAG elections, as will vituperative arguments about the new TV/theatrical deal and the responsibility for the large-scale decline in SAG’s power and prestige.

Change isn’t limited to the labor side. The AMPTP’s longtime head, Nick Counter, retired several weeks ago. Also, interestingly, the new TV/theatrical deal was negotiated primarily on an informal basis by key SAG leaders and studio heads, not by formal bargaining between the union and the AMPTP. Although AMPTP acting head Carol Lombardini played a part late in the discussions, this process raises questions as to the future role and effectiveness of that organization.

Hanging over all of this are the twin factors of the economy and new media. The troubled economy will continue to harm the entertainment industry for some time to come. New media will continue to evolve, and will probably roil the unions, and the industry as a whole, for a decade or more.

And, of course, with mid-2011 expiration dates set for the WGA, DGA, AFTRA (two deals) and new SAG deals, negotiations will start again in the towards the end of next year. No rest for the weary, or sleep for the sinful, it seems.

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SAG Stalemate Update

The Screen Actors Guild stalemate grinds on. Variety says there are back-channel talks with studio heads, but it’s hard to know whether talks are actually in progress or, if any, how substantive they are. These rumors have persisted off and on for almost two months at least.

Causing the stalemate is the issue of contract expiration date rather than new media; there’s talk of a trade-off between this issue and the (unrelated) SAG demand for force majeure payments per the previous SAG agreement. Meanwhile, the passage of time itself threatens to generate new roadblocks.

The SAG Board is meeting this weekend, and Variety suggests a proposed TV/theatrical deal might be presented to the Board then. I’m skeptical, but you never know. The SAG story has had a surprise around every corner, although for the last year, stalemate has unfortunately been the one constant.

What is known is that the SAG and AFTRA boards will spend part of the weekend meeting jointly to review the proposed commercials contract, a deal reached earlier this month between the two unions and the ad industry. That deal, a good one for labor, has garnered little opposition and is expected to be approved overwhelmingly, first by the two boards, then by the two unions’ membership, a process that will take several weeks.

In contrast, the TV/theatrical deal—even though there isn’t one—has garnered opposition. The MembershipFirst hardliners have pledged to oppose any deal endorsed by the current leadership, in part because of new media issues. A small band of MF-ers, in groups of 50-100, have been protesting the nonexistent deal in small weekly rallies around town for the past 6-8 weeks. That group is led by Scott Wilson, and has included, from time to time, SAG President Alan Rosenberg, 1st VP Anne-Marie Johnson, former national board alternate David Jolliffe, and even twice-ousted National Executive Director Doug Allen.

Speaking of Johnson and Jolliffe, they are two of the several dozen candidates in the upcoming AFTRA national and LA board elections. MF, which bitterly opposes merger between SAG and AFTRA and burns with hatred for AFTRA, has adopted a strategy of attempting to attack merger from within AFTRA itself—not that AFTRA is likely to be keen to merge with SAG at this point anyway, given the turmoil the Guild has endured at the hands of MF for over a year.

Thus, as Variety points out, MF-ers Bonnie Bartlett, Frances Fisher and Sumi Haru currently sit on both the SAG and AFTRA national boards. MF candidates in the upcoming AFTRA elections, in addition to Johnson and Jolliffe, include Steven Barr and David Clennon. Ballots will be mailed May 8 and due back June 3.

The AFTRA press release is below.

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AFTRA press release:

American Federation of Television and Radio Artists, AFL-CIO

Los Angeles, California (April 16, 2009)—The Los Angeles Local of the American Federation of Television and Radio Artists—the people who entertain and inform America—announced the complete list of candidates for its 2009 election of Los Angeles Officers and Board members, Los Angeles-based National Board members, and delegates to the 2009 AFTRA National Convention.

All seven incumbent AFTRA Los Angeles Officers were named candidates for re-election by the AFTRA Los Angeles Nominating Committee and will run unopposed for additional two-year terms. They include Los Angeles President Ron Morgan; First Vice President Susan Boyd Joyce; Second Vice President Gabrielle Carteris; Third Vice President Bobbie Bates; Fourth Vice President Jason George; Recording Secretary Patrika Darbo; and Treasurer Jay Gerber.

A total of 22 AFTRA Los Angeles Board seats are up for election with candidates either having been selected by the Los Angeles Nominating Committee or qualifying for the ballot by Nominating Petition. Actors named by the Nominating Committee to fill 11openings include incumbents David Bowe, Raza Burgee, Andrew Caple-Shaw, Gabrielle Carteris, Bob Joles, and Kate Linder, along with David Andriole, Mimi Cozzens, Sandra de Bruin, James Schneider, and Marcia Strassman. Qualifying for the ballot by Nominating Petition are incumbent actors Nancy Daly and Paul Napier, joined by actor David Jolliffe.

Incumbent announcer Mike Sakellarides and announcer Chuck Southcott were named by the Nominating Committee as candidates to fill two vacancies representing that category. Dancer Galen Hooks, also an incumbent Board member, was named as a candidate by the Nominating Committee to fill one vacancy in that category.

Candidates to fill two singer vacancies are incumbents Susan Boyd Joyce and Dick Wells, both also selected by the Nominating Committee. Incumbent broadcaster Pepe Barreto was named by the Nominating Committee as a candidate for re-election representing the newsperson category with two additional newsperson seats remaining to be filled. There are also three vacancies representing the sportscaster category to be filled.

Thirteen seats representing Los Angeles on AFTRA's National Board are up for election, with one seat guaranteed for Los Angeles Announcers and one for Los Angeles Newspersons. The remaining 11 seats will be filled based on the plurality of votes received. All National Board candidates qualified for the ballot by Nominating Petition. Candidates include incumbents Bobbie Bates, Susan Boyd Joyce, Gabrielle Carteris, Jay Gerber, Ron Morgan, Paul Petersen, and Sally Stevens. Also running are members Granville Ames, Steven Barr, L. Scott Caldwell, David Clennon, Milo Edwards, Carole Elliott, Anne-Marie Johnson, D. W. Moffett, Jason Priestley, Elizabeth Reynolds, and Alan Ruck.

Officer and Board Candidates will have the opportunity to address the membership at the AFTRA Los Angeles annual "Meet the Candidates" forum on Wednesday evening, April 29, at the union's headquarters.

Los Angeles members will also elect 198 delegates to represent their performing categories at the 2009 AFTRA National Convention scheduled for August 6-8 in Chicago, Illinois.

Ballots will be mailed on May 8 with a voting deadline of June 3. Elected Los Angeles Officers and Board members will begin their terms July 1. National Board members begin their four-year terms at the conclusion of this summer's National Convention.

SAG and the Studios: The Next Roadblocks

Last year proved that time is not on SAG’s side. Recall that the union’s then-leadership wanted better terms in new media than the other Hollywood unions got. Without leverage, all SAG achieved was stalemate, and it’s had no contract with the studios since last June. SAG hardliners fiddled while the calendar burned, and the extended delay, in turn, created a new issue: contract expiration date.

That issue, in essence, is this: SAG wants any new deal to expire in mid-2011 (3 years from when the old deal expired), while the studios are offering what amounts to mid-2012 at the earliest (3 years from whenever the new deal is ratified). It makes a difference, because a mid-2011 expiration would synchronize SAG with other Hollywood unions, giving the Guild and its allies more bargaining power then—perhaps enough to achieve improvements in new media.

The studios, of course, want nothing to do with a stronger SAG and so, although the Guild’s under new leadership, the stalemate continues. Up until this evening, there’d been little news lately about SAG and the studios—and understandably, since SAG’s been busy working with AFTRA on the just-concluded talks with the advertising industry. A few hours ago, stories appeared on the Variety and LA Times websites suggesting that back channel talks may have led to a mutually-acceptable compromise; however, that claim was essentially denied by a SAG spokeswoman. In any case, the apparent stasis is deceiving, because time marches even if the negotiations perhaps do not. So we have to ask: would delay itself bring more roadblocks?

Unfortunately, yes. Right now, AFTRA’s minimum are 3.5% higher than SAG’s. That’s because AFTRA did a deal last June, and received an increase at that time. SAG has continued to work under the expired agreement and old rates. Come June 30 of this year—a scant 12 weeks from now—AFTRA’s minimums will kick up another 3.0%, plus a 0.5% increase in pension and health contributions, while SAG will still be stuck in neutral if there’s no contract. At that point, it would take a 7.0% increase to bring SAG up to parity.

Are the studios likely to cough up such a large increase? Maybe. And maybe you’ll find dollar beers and fifty-cent pizzas at the local multiplex. In other words, not likely—or not easily, at any rate. The point is, the pay gap would become yet another tough issue to fight over, and yet another impediment to a deal. Indeed, even the current 3.5% gap may be an impediment, because SAG’s increases will always lag AFTRA’s by more than nine months, unless the studios are willing to give SAG another bump in just a few months, or unless the unions merge.

But there’s more. The start of summer also heralds the SAG election cycle. Candidates for SAG board and the SAG presidency will probably be announced in July, and the campaigning will continue through close of balloting in mid to late September. During that time, candidates will be nervously jockeying for position. The one thing they’re not likely to be doing is making tough compromises in order to close a deal with the studios.

So there it is. Either a deal is made in the next couple months, or it likely slips out of reach until October or beyond. But if that happens, the expiration date issue becomes all the more difficult. Then one wonders if the Guild might work without a contract for the next two years, then threaten a joint strike with the writers. That’d be one way to re-synchronize expiration dates, at a tremendous cost in lost wages however.

Of course, hovering behind it all is the question of whether motion picture production will, or can, resume in the absence of a contract. That’s a tough one, and the answer may differ depending on the financing: self-financed studio pictures don’t need production bonds, but independent movies do, and such bonds have been unavailable due to the possibility, however theoretical, that SAG could strike. (I’m unclear as to whether studio pictures financed under hedge-fund slate deals require bonds.) The studios no doubt need to resume production soon, in order to assure an uninterrupted flow of product for 2010. That may drive some sense of urgency on the management side; if so, it’s probably the only leverage SAG has.

The takeaway: for the sake of the industry, and the Screen Actors Guild, let’s hope Variety’s right and a deal is imminent. Otherwise, we’ll slip further and further into the uncharted waters of labor stalemate.

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SAG-AFTRA Ad Deal Done

Score one for labor. SAG and AFTRA jointly reached a deal late last night with the advertising industry, retaining the current lucrative compensation structure for broadcast network commercials, and largely resisting the industry’s attempt to reduce pension and health contributions. Solidarity, it seems, makes a difference. In the words of a labor-side source close to the talks, “the unions effectively won.”

The industry’s chief negotiator, Doug Wood, had a different perspective: “neither side won or lost,” he said in an interview; rather, the deal was “fair on both sides.” He described the process as one of “give and take,” and contrasted it with TV and theatrical labor negotiations, which he called “crazy.” (SAG will presumably wade back into that thicket now that the ad deal’s done, and attempt to revive the stalled talks with the studios.)

The three-year deal was reached just hours after the last contract expired. If ratified as expected by the union boards and membership (a process that’s likely to take 4-6 weeks), it will run through March 31, 2012. The deal is worth more than $2.8 billion over three years, said a union source. Wood approximated the deal at $1 billion per year, and said the total increases amounted to $30 million per year, or 3%.

Under the new agreement, actors will continue to be paid under the so-called “Class A” structure for their work on broadcast network commercials, though the unions agreed to an industry proposal for a two-year pilot study of an alternative approach, called the Gross Rating Points (GRP) model.

The current system, based on the number of times a commercial is run, has become a sore spot for the industry: network advertisers balk at making high payments to actors even as broadcast network audiences have declined. Nonetheless, it looks like they’ll continue to make those payments for several more years at least. Wood counseled patience: “If I had my druthers, I’d get [a switch to the GRP model] done sooner rather than later,” he remarked, but he expressed conviction that if the pilot study goes well, the unions will essentially be forced to change to the new approach by 2012. At that point, the GRP model will be a “fait accompli,” said Wood, and software and systems will be in place for an quick changeover at that time.

The GRP model, according to the industry, would maintain the same aggregate compensation to actors as a whole, but shift the allocation in favor of actors in cable ads. The issue has been bubbling since at least 2006, when the contract was extended for two years to allow a study of alternative approaches. The GRP model emerged from that study.

Union concerns with the GRP proposal include an interesting gender issue, according to a labor-side source. Women, it turns out, appear disproportionately often in daytime commercials for household products and the like. Those commercials have lower viewership than primetime commercials do, and the unions want to ensure that a ratings-based formula would not adversely affect female actors’ earnings.

The new deal also includes a 5.5% overall increase in wages and other compensation over the life of the contract. It also, for the first time, sets rates for commercials made for the Internet, though those minimums don’t kick in until the third year of the contract, Wood noted (he nonetheless called the minimums a “big victory” for the unions). Interestingly, new media did not prove to be the flashpoint in these negotiations that it has in the deals between Hollywood studios and actors, writers, directors and crew.

In addition, the advertisers’ contribution rate for pension and health plans was increased by 0.5%. Under the new deal, the contributions will be subject to an annual cap, as the industry sought, but the cap is much higher ($1,000,000 per performer, per contract, per year) than the advertisers had proposed ($250,000).

The joint SAG-AFTRA press release is below. UPDATE: Also below is a blog post from industry chief negotiator Doug Wood.

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Here’s the SAG-AFTRA joint press release:

AFTRA AND SAG REACH TENTATIVE AGREEMENT WITH ADVERTISING INDUSTRY ON NEW COMMERCIALS CONTRACTS

NEW YORK (APRIL 1, 2009)—Screen Actors Guild and the American Federation of Television and Radio Artists announced today that the AFTRA/SAG Joint Negotiating Committee has reached a unanimous tentative agreement with the Joint Policy Committee (JPC) of the American Association of Advertising Agencies (AAAA) and the Association of National Advertisers (ANA) on terms for successor agreements to the AFTRA Television and Radio Commercials Contracts and the SAG Television Commercials Contract, subject to approval by the SAG/AFTRA Joint National Board.

The new three-year agreement contains a more than $36 million increase in wage rates and other payments for all categories of performers in the first year of the contracts, approximately $21 million in increased contributions to the SAG Pension and Health Plan and the AFTRA Health and Retirement Fund, establishment of a payment structure for work made for the Internet and other New Media platforms, important new monitoring provisions, and improvements for choreographers, extras, and Spanish language performers.

The new contracts also contain an agreement in principle outlining terms for a pilot study for the purpose of testing the Gross Rating Points (GRP) model of restructuring compensation to performers as proposed by Booz & Co. The two-year study is scheduled to commence on April 15 and will be conducted by a jointly retained consultant engaged by the Unions and the Industry. The results and possible adoption of the study’s findings will be subject to negotiation by the parties not later than January 3, 2012.

The unions successfully protected the critical “Class A” payment structure and continued unchanged the editing provisions in the existing contract.

Highlights of the new agreement include:

• Three-year agreement, term effective April 1, 2009 to March 31, 2012

• 5.5% overall increase in wages and other compensation over the life of the contracts, including a 4.43% increase, effective April 1, 2009, in Class A, Wild Spot, and basic cable session fees

• For product made for the Internet or in New Media, 1.3 times the minimum session fee for 8 week’s use and 3.5 times the minimum session fee for one year’s use

• 0.5% increase in the employer contribution rate to the AFTRA H&R and SAG P&H plans bringing the total contribution rate to 15.3%. The agreement provides for a cap on P&H and H&W contributions, but the committee successfully negotiated the industry from their initial demand of $250,000 to $1,000,000 per performer, per contract, per year.

• Secured five, new covered jobs for commercial extras, up from 40 to 45

• Established new exclusivity provisions for made-for cable only commercials

• Instituted, for the first time, a contract provision to pay extras a round-trip mileage fee of $8

• Increased foreign use payments under the Spanish Language section of the contract

• The across the board increase under the AFTRA Radio Commercials Contract is 5.3%, including contributions to AFTRA H&R and the AICF

• All of the unions’ proposals regarding diversity issues were addressed in the negotiations

“The AFTRA and SAG commercials contracts provide our members with the solid foundation they need to sustain their careers and families,” observed AFTRA National President Roberta Reardon and AFTRA Chair of the Joint Negotiating Committee. “In this round of negotiations, during the worst economic crisis since the Great Depression, we successfully improved wages and expanded benefits to keep our members working now and in the future. This is a major victory for our unions—and a victory for organized labor as a whole—and I applaud the Joint Negotiating Committee for their vision, hard work, and solidarity.”

“I am so proud of the work of our Joint Negotiating Committee. It was a hard-fought negotiation and our greatest victory was in protecting Class A residuals payments. By securing a joint study to research and develop a workable compensation model, our negotiating committee protected every member who works under these contracts across the country,” said Sue-Anne Morrow, Screen Actors Guild Chair of the Joint Negotiating Committee.

“Our Joint Negotiating Committee held together in the face of some very tough issues and they stood firm for our core principles. We have achieved a deal that brings significant improvements to these contracts. Our gains include establishing the first-ever payment structure for made-for-the Internet and new media commercials and significant increases in wages during a very troubled global economy. I am proud to take this tentative deal to our Joint National Board,” said John T. McGuire, Screen Actors Guild Chief Negotiator.

“The Joint Negotiating Committee provided us with clear objectives borne out of the nationwide Wages and Working conditions meetings leading up to the negotiations,” said Mathis L. Dunn, Jr., Chief Negotiator for AFTRA and Assistant National Executive Director for Commercials, Non-Broadcast, and Interactive Media.“ Among the priorities, our members asked us to increase minimum compensation and preserve Class A. We achieved those objectives and more, including agreement on a test study that will allow for a meaningful exploration of how best to adapt our contracts to meet the changing needs of all performers working in the shifting landscape of new technology.”

Formal negotiations between the 26-member AFTRA/SAG Joint Negotiating Committee and the Industry began on February 23 and concluded on the morning of April 1 in New York City.

Details of the new agreement will be submitted to the SAG/AFTRA Joint National Board for approval at a date to be determined, and if approved, will be jointly mailed to the membership of both unions for ratification thereafter.

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Here’s the post from Doug Wood:

New Collective Bargaining Agreement with SAG and AFTRA

I am pleased to announce that the JPC and SAG and AFTRA have tentatively agreed on terms for a new collective bargaining agreement commencing April 1, 2009 and ending March 31, 2012.

Formal negotiations began on February 23 and concluded in the early morning of April 1. Since the opening of negotiations, the two sides met for a total of 25 days.

In many ways, these negotiations set a new stage in the relationship between the advertising industry and the unions. Rather than approaching the bargaining table as adversaries, the two sides sought to find solutions to one another’s key issues. While many of these issues were difficult to resolve, the conviction by all parties to find reasons to agree rather than disagree resulted in a fair and balanced agreement.

Full details of the agreement will be released shortly.

I would like to thank the members of the JPC who worked many hours in developing the industry proposals and particularly Danielle Korn and Leslie Meeds who fully participated in the negotiations and were at the bargaining table every day, including days that went well into the night. A special thanks goes to Kathleen Quinn of the AAAA. Kathleen is the glue that keeps the JPC working. Her tireless efforts at the negotiations and years of knowledge working with the unions proved to be invaluable. I’d also like to thank the ANA, particularly Bob Liodice, Christine Manna, Dan Jaffe and Keith Scarborough for their support and assistance.

Most importantly, I’d like to thank the union negotiators – John McGuire, Mathis Dunn, and Ray Rodriguez -- for their tireless efforts throughout the negotiations.

Lastly, I’d like to thank my colleagues, Elky Stone and Greg Hessinger. Their assistance, knowledge, and wisdom throughout the negotiations helped us all focus on the key issues and accomplish the tasks at hand.

In the end, our success was a team effort that I extend my thanks to everyone involved.