We've Got Hollywood Covered

Contract Time Is Coming: Now, What About That Combined SAG-AFTRA Clout?

The commercials contract talks will be the first test of SAG-AFTRA's strength at the bargaining table

Don't expect the merger of SAG and AFTRA to give them any added clout when they sit down with the ad industry in the coming months to negotiate a new commercials contract.

But it does give them one major advantage: They won’t be fighting with each other.

That's a major shift for the famously fractious actors guilds that since March 30 have been one union, 165,000 members strong. “There’s no possibility of being divided at the bargaining table," SAG-AFTRA’s Executive Vice President Ned Vaughn told TheWrap. "Of course, that makes us stronger.”

True, the Screen Actors Guild and the American Federation of Television and Radio Artists have bargained jointly before. But for the first time the former bitter rivals really will be on the same page with their bargaining proposal — in large part because they’ll have written it, and will live with it, together.

“I have negotiated the commercials contract since 1997,” SAG-AFTRA Co-President Roberta Reardon told TheWrap. “From our very first planning sessions this year it was clear to me that this would be a different process and an improved one. Joint bargaining prevented the two unions from developing different strategies and forced us to attempt to work in tandem — but we were still two different institutions with our own needs and agendas.”

Also read: SAG-AFTRA Gearing Up For Commercials Contract Talks

The current contract, which covers about $1 billion in annual work, expires March 31. The two sides are working under a one-year extension of the three-year deal reached in 2009, with the two sides prepared to sit down at the beginning of the new year.

Even their adversary in the commercials talks, the Association of National Advertisers, thinks the merger could make negotiating more efficient.

“We’ve always made a point of speaking to both groups in our talks, so on a practical basis it doesn’t make much difference to us,” Doug Wood of Reed Smith, ANA’s general counsel, told TheWrap. “But if it simplifies things on their side, it should make things easier for everyone.”

In addition to wages and working condition issues, the two sides had planned to wrestle with a plan to revamp the way commercials residuals are calculated. But both sides told TheWrap that issue was off the table until more data has been accumulated.

Also read: SAG, AFTRA Commercials Deal: a Good Omen?

That’s one less potential roadblock to a deal, and Wood said he’s relatively confident a deal will be reached without too much grief.

“We’ve never really tried to take advantage of any internal differences,” Wood said, “but if I were the TV industry, I might be worried.”

He was referencing the 2008 film and TV contract negotiations, when AFTRA suspended joint talks and cut its own deal with producers. Outraged SAG members lobbied AFTRA's rank-and-file and the roughly 45,000 members with joint membership to defeat ratification of their sister union’s agreement — but that didn’t work.

With a membership too divided by the battle to authorize a strike vote, SAG couldn’t reach a deal until it had replaced its leadership more than a year later.

That meltdown between the two unions set in motion a major shift in the TV landscape. With its new contract and SAG plagued by infighting, AFTRA had free rein to organize new TV work. It targeted pilots, which had been SAG’s domain by a 9-1 margin. In one year, AFTRA reversed that number and hasn’t relinquished its hold since.

The fallout from the 2008 contract dispute went a long way toward shifting the attitude of SAG’s membership on the merger.

While AFTRA was strengthened by the TV gains with increased dues and contributions to its health-plan contributions, SAG was losing ground. It suffered especially when producers virtually halted feature film production in 2009 to lessen their vulnerability to a strike.

All this transpired when the nation’s economy was hitting the skids, so SAG and its health and pension fund took a significant hit. 

Faced with the options of a costly battle over jurisdiction with AFTRA or a gradual diminishment of its strength, SAG opted for a third choice: merging. 

“We were left to do nothing, or go to war,” said one SAG-AFTRA board member who chose to stay anonymous. “The problem was that it would have been the wrong war.”

That's a reference to the bigger and ultimately more critical battle for SAG-AFTRA: the rapid emergence of new media.

An increasing number of independent producers now have the ability to create ultra-low budget work for YouTube and thousands of other streaming sites. That's creating a generation of young actors who don’t see union membership as an integral part of an acting career, posing a serious threat to the long-term viability of the union.

"Anyone pursuing a legitimate professional career still needs to be a union member," said the board member. "But the growth of low-level non-union work is a frightening reality and a massive challenge, and the only way we’re going to be able to address it is with a united front."

So how is the merger going?

Although it passed with more than 80 percent of the vote, its opponents still believe it was a mistake.

Also read: SAG and AFTRA Merger Overwhelmingly Approved by Membership

“You mean the disaster?” said one member, who chose to remain anonymous. “Those of us who fought against this are being vindicated sooner than we thought. It’s sad for the sake of the union, but for the Screen Actors Guild, over 80 years of history, is gone. The replacement is a joke.”

Some members have suggested that the union’s financial health — and consequently its ability to mount a serous strike threat — has been hurt by the merger. SAG-AFTRA officials acknowledge that new memberships are down and that the number of members behind in dues payments has risen.

But the union’s overall financial picture is sound, they maintain, and in the case of the dues and initiations, steps taken by the union prior to the merger precipitated the problems.

Membership in AFTRA was available at a cost of $1,600 in the months leading up to the vote; it’s $3,000 to join SAG-AFTRA now. A number of individuals jumped at the deal, resulting in a new membership surge prior to the merger — and the subsequent drop-off.

Similarly, members had to be paid up in full on their dues in March in order to vote on the merger; the next round of dues came just two months later in May, so the union has let members who are in arrears on their dues slide until the next dues period at the end of this month.

"From a financial standpoint, merger was absolutely the right decision," SAG-AFTRA co-president Ken Howard told TheWrap. "Not only did it improve our bargaining position, but we’ll also be a more efficient organization."

In its first federal financial filing in July, SAG-AFTRA showed assets of $172.3 million and liabilities of $138.9 million. The liabilities don’t include the severance and vacation payments to the roughly 80 staffers voluntarily laid off in September, which likely range into the millions of dollars.

Also read: 80 SAG-AFTRA Employees Will Exit With Buyouts

The final verdict on the merger won't be clear for years, or at least until the next round of negotiations with the TV and film producers in 2014. For now though, despite some glitches, the transition seems to have gone smoothly enough. It's hardly empirical evidence, but the message boards that for years flowed with members' vitriol are relatively placid.

"There's been a tremendous amount of effort by the staff to make this come off without a hitch," SAG-AFTRA's executive director David White told TheWrap. "The daily life of a member and how they deal with the union has been seamless, and that was by design. We worked hard in advance of the actual merger, to ensure that the member transition was as smooth as possible.”