IATSE and Teamsters Reach Mutual Assistance Pact

The International Brotherhood of Teamsters and the International Alliance of Theatrical Stage Employees have entered into an agreement to work together toward common goals. The move represents a major change from the previously frosty relationship between the two unions.

The pact sets out how the unions will address organizing efforts, deal with jurisdictional issues and establishes new lines of communication aimed at strengthening the relationship. Teamsters Locals 399 (Los Angeles) and 817 (New York) represent motion picture and television drivers and others. IATSE represents most below the line crew.

A joint committee will be established to oversee the efforts of the two unions. Recent meetings (which I previously reported) between the leadership of the two labor organizations have led to closer ties.  The Executive Boards of both unions unanimously ratified the agreement. 

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Fixing the Residuals System

The residuals system is broken. It’s expensive to administer and is an invitation to conflict as platforms such as new media evolve. Yet we need residuals, because talent survives on these payments between gigs. Can the system be fixed?

Yes, I believe so. For a proposal, see my piece in today’s Hollywood Reporter.

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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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Hollywood Crew Deal Ratified

As expected, the membership of IATSE, the union representing Hollywood crew members, ratified that organization’s proposed contract with the studios yesterday, although not without significant opposition. The new contract takes effect August 1 and runs for three years, as is usual with Hollywood labor agreements. It includes 3% annual wage increases.

The deal had been opposed by some members, who cited rollbacks in the healthcare plan, as well as concerns regarding new media. However, IA President Matthew D. Loeb remarked, “We feel we have given our members the best protection we can at a time when the bottom is falling out of a lot of traditional business models.”

Unofficial partial ballot totals posted on the No campaign’s web site showed a wide difference of opinion from local to local, with opposition ranging from 20% to 45% among the 7 locals for which data was available. Turnout was unclear from the figures. The 15 Hollywood-based IATSE locals covered by the contract encompass over 35,000 members.

Meanwhile, the Screen Actors Guild is still in stalemate with the studios, with no evident movement. In NY, negotiations between SAG and AFTRA jointly with the advertising industry continue this weekend. SAGWatch quotes a source reporting “some progress,” which contrasts with indications earlier in the week. That contract expires in ten days.

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Hollywood Labor’s Long-Term Future: More Unrest

After a year and a half of Hollywood labor turmoil, we’re finally nearing a SAG deal and the end of this negotiating cycle. Will this be the beginning of a new era of labor peace in the industry?

Unfortunately not. Silicon Valley is not going to suddenly take an Ambien and stop innovating. That means that a scant two years from now, when negotiations for 2011 renewals of the guild and union contracts begin, negotiators will be challenged with even newer forms of “new media,” new business models, and new economic realities.

Thus, the cycle of anxiety, distrust and failed bargaining may begin again. And so on when those renewals expire three years later, and again three years after that, and so forth. Hollywood is now yoked to the computer, Internet and consumer electronics industries, all of which evolve at breakneck speed, dragging slower-moving Hollywood along like a clumsy partner in a three-legged race. That has toxic consequences for the entertainment industry’s labor relations, including, notably, an increased risk of strikes, stalemates and slowdowns.

What to do? I suggest that Hollywood guilds, unions and management form a joint New Media Working Group. This body should have members from management and from the Writers Guild (WGA), Directors Guild (DGA), Screen Actors Guild (SAG), AFTRA, IATSE, and management. Perhaps the AFM (musicians union) should be included as well; I don’t know enough about that union to venture an opinion.

The function of the Working Group would be to analyze and report on developments in new media and the possible resulting effect on existing labor agreements and relationships. The goal would be to track those changes on an ongoing basis and generate various options for addressing them in the collective bargaining agreements.

By doing this work on an ongoing basis, it might be possible to reduce the paroxysms of last-minute activity that characterize the negotiating process today. And, by conducting this work jointly, it might be possible to bring the various unions, and management, onto the same page in their subsequent negotiations: that is, to ensure that everyone has a common knowledge base from which to work.

To do its work, the committee should meet quarterly or even monthly. It will need research support (sharing of data) from all parties, and a budget for purchase of research reports and other such expenses, consultants as necessary, and perhaps a staff person who would travel regularly to Silicon Valley. The committee would build relationships with major players and information sources—agencies, attorneys, other guilds, academics, research firms, tech companies, and the like.

Silicon Valley will continue to innovate, and new media will continue to evolve. Yet, when it comes to guild agreements, the entertainment industry seems content to snooze between contract renewals. Isn’t it time to try a different approach?

Portions of this article previously appeared December 14, 2007, as Memo to DGA - Please Propose a Tri-Guild New Media Adjustment Committee.

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SAG: The Mediation Express

SAG met with the federal mediator last Wednesday, and now the AMPTP is meeting with him this Thursday, reports Variety. Meetings between the mediator and either one side or the other have been coming at a rate of one meeting per week over the last month. There haven't been any joint meetings.

Meanwhile, as I blogged yesterday, the AMPTP restarted negotiations with the IA today (Monday), and will meet with them tomorrow and Weds., and then again, reports Variety, next Mon.-Weds. as well. Looks like the SAG mediation has jump-started the IA talks. Not exactly what people were expecting, I imagine.

AMPTP, IA to Talk Monday

Negotiations between SAG and the AMPTP (studios) are stalled, and the mediation process seems glacial, so the AMPTP is taking advantage of its free time to negotiate with IATSE, it seems. The two parties are sitting down for talks tomorrow (Monday) and have scheduled three days' worth of sessions, reports Variety.

The IA and AMPTP last met about seven months ago, also for three days. Seemingly, there's no rush -- the IA deal doesn't expire until next August. But on the other hand, the AMPTP would love to be able to announce yet another deal incorporating the new media template that SAG objects to. That template -- a set of provisions regarding minimums, residuals, jurisdiction and other matters -- has been part of four other deals this year (DGA, WGA, and two AFTRA deals).

Memo to DGA - Please Propose a Tri-Guild New Media Adjustment Committee

Since the WGA negotiations have devolved into nuclear winter, it looks like the next move will be talks between the studios and the DGA. Here's a suggestion/request for the directors: please include, in your proposal to the studios, a tri-guild New Media Adjustment Committee.

What does that mean?

"Tri-guild" - the committee should have members from management and from all three above-the-line guilds (WGA, DGA, SAG), assuming each guild ratifies a similar contract proposal (so that all three guild agreements would contain the same language establishing the committee). The committee might also have members from the IA (IATSE represents many below-the-line workers, i.e. craftspeople), AFTRA (a performers union), and AF of M (musicians union), both of which also have new media issues (since both also receive residuals); however, these latter two unions haven't generally been part of multi-guild committees in the entertainment industry. The committee should also have more-or-less non-aligned members from the legal and agency world, academia, and elsewhere.

"New Media" - the committee's focus would be the issues associated with new media.

"Adjustment Committee" - the committee would have the power to propose and pre-negotiate changes to the WGA, DGA and SAG agreements, so that new media issues aren't dealt with in an almost-indigestible lump on the eve of (or after) contract expiration, which is part of what led to the current, bitter strike.

The committee should meet quarterly or even monthly. It will need research support (sharing of data) from all parties, and a small budget for purchase of research reports and other such expenses. The committee would build relationships with major players and information sources (agencies, attorneys, other guilds, academics, research firms, tech cos., etc.).

The WGA had a Contract Adjustment Committee in the 1990's, with a general focus (it had nothing in particular to do with new media), but I understand that it was not very effective. This time the stakes are higher, because technological change, like the Terminator, will never stop.

This means more of what we've been seeing for the last 10 years: software keeps evolving, business models keep changing, hardware gets smaller, faster and cheaper, data capacities and transmission speeds increase, new web sites spring up overnight with instant audiences, and new technologies are developed on a regular basis.

Where all this leads is unknown, but one thing is clear: Silicon Valley is not going to suddenly take an Ambien and stop innovating. Yet, when it comes to guild agreements, the entertainment industry seems content to snooze between contract renewals.

The guild agreements are multi-hundred page accretions of hard-fought gains, historical accidents, and tough compromises. Unless the entertainment industry establishes a mechanism to modify those contracts on an ongoing basis - rather than attempting to do so under looming deadlines - we may face repeated strikes and near strikes (de facto strikes) at regular, three-year intervals. The 2007 strike is no fun, to put it mildly. Do we really want the same thing in 2010 as well?

Union Disunity

Today's Hollywood Reporter leads with the news that AFTRA has moved its national HQ from NY to LA, in the same building that SAG occupies. That sounds nice - the actors' unions sitting next to each other like good friends in math class, passing notes (or texting each other) when the teacher's not looking.

All very fine, except for one thing: AFTRA and SAG aren't so friendly, it turns out. Technology is one reason why: the unions have overlapping jurisdiction in primetime shows shot digitally, and AFTRA makes deals with producers that undercut SAG's rates. Indeed, I advised a filmmaker once who was shooting a film in digital, and guess which union he chose to sign with?

(By the way, if you're a producer, talk to a lawyer first before signing with any union. There are some significant benefits, but also major pitfalls if not done right.)

The tension between the two unions may undercut their unity when contract negotiations with studios, producers and networks begin next year. In fact, SAG members on the joint SAG-AFTRA negotiating committee plan to bloc vote, which would undercut AFTRA's influence on negotiations. Tit for tat? Perhaps.

Meanwhile, the two branches of the Writers Guild of America (WGA) - East and west (the West-Coast branch insists on lowercase) - have never been close, but generally play well together. Not so the IA (International Alliance of Theatrical Stage Employees) and the WGA. They each claim jurisdiction over animation writers and reality TV writers, and the words between the two unions get nasty at times. The studios, meanwhile, take the position that there are no writers in reality TV at all, which is kind of a complicated question.

As for contract negotiations, while SAG's (and the DGA's) begin next year, the WGA's have already begun. Those talks are getting nowhere so far. All three unions have big issues: home video residuals (the formula, in place for 25 years, dramatically favors the studios), compensation and residuals for digital media, and, of course, two perennials, compensation rates and pension and health insurance rates.

SAG has observers on the WGA strategy team, while the Directors Guild of America (DGA) is a bit less aggressive in its posture with the studios. At the end of the day, though, the residual formulas in the three union's agreements with the studios tend to be similar, as do some of the other provisions as well.

The bottom line though, is this: studios and networks are stocking up on scripts, shows and movies, filling their larders today as insurance against possible multiple strikes next year. Even if none materialize, a de facto strike - i.e., a work slowdown imposed by the studios - seems certain. That's because, come next year this time, the studios and networks will find their cupboards overflowing with product, and will have little need for more until they've drawn down what they've got.