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SAG, AFTRA Commercials Deal: a Good Omen?

The two unions were able to work jointly — and the Guild showed it could close a deal without threat of a strike.

The Screen Actors Guild and AFTRA’s new tentative commercials contract ignited a flicker of hope that the guild can now return to bargaining its long-expired TV/theatrical pact.


The new commercials pact that negotiators for SAG, AFTRA and the ad industry’s JPC agreed upon early Wednesday is at least a much needed victory for the actors’ unions. The contract marks the first time the unions have bargained jointly since AFTRA bargained its own film and TV contract with the Alliance of Motion Picture and Television Producers last spring.


Other professionals in the industry are also heartened to see the Guild close a deal without threat of a strike.


“It’s outstanding. The two unions were able to strike exactly the right balance of hard-nosed protection of our members and a responsible approach to a tough negotiation,” a member of SAG’s national board, who requested anonymity, told TheWrap.


The commercials contract, which still must be submitted to the Joint National Board for approval and then mailed to members of both unions for ratification, included a $36 million wage increase, a $21 million increase in pension and health funds and the unions’ first payment structure for made-for-the Internet commercials.


The SAG board member said the gains are a remarkable victory considering the rocky economy, which has hit the ad industry hard. “We got wage increases and pension and health increases when unions all over the country make concessions. That just cannot be overlooked,” he said.


The increases in P&H contributions are especially welcome because all of the Hollywood unions’ pension plans decreased in value 20 percent last year due to the Wall Street crash. SAG’s pension plan lost 22.7 percent of its value; AFTRA’s fell 23.4 percent.


A date to send the contract to SAG and AFTRA’s joint board has not been set, but a source close to the talks said it would happen soon.


Not that everything went without a hitch. Talks extended beyond the midnight Tuesday deadline, and another individual close to the negotiations said they were not as amicable as they appeared. The unions had to fight hard against several rollbacks proposed by the JPC, including a $20 million cut to pension and health contributions.


“In exchange to agreeing to an extremely high cap on health and retirement earnings and flexibility, we got them to give us a very generous wage increase and more than $21 million in contributions to the funds over the life of the contract,” the individual said.


The unions also capitulated to a two-year study of the Gross Ratings Points compensation model, to be conducted by consulting firm Booz Allen Hamilton. SAG and AFTRA argued in a drafted strike-authorization letter that the study would impair the unions’ ability to adopt a new compensation model.


And many actors feel the gains made in the commercials contract still aren’t enough. Former SAG Hollywood board member Brian Hamilton said that although he is grateful that his unions’ negotiators held their ground, actors’ compensation for commercial work isn’t what it should be.


“I wouldn’t say the increases are generous. I’d consider generosity a more realistic percentage of the advertising budget. Approximately 2 percent of an advertiser’s budget goes to talent. So, ‘generous’ would be 5 percent.”


Hamilton illustrated his point by explaining how he was compensated for appearing in a Teleflora.com commercial that aired during the Super Bowl. Hamilton said he was paid scale for the day’s shoot, received residuals for the two times the ad aired on network TV and a small residual for Internet use. The actor estimated he grossed about $3,500 to appear in a commercial that the advertisers paid $3 million to air during the Super Bowl.


New York-based SAG member Matt Mulhern is concerned that the pact’s terms for New Media compensation falls short. 


“They tripled the session fee — which is fine — but instead of residuals they’ve established a per-year buyout, so the ad continues to be shown into the next year,” Mulhern said.


That model is similar to the model the AMPTP has proposed in its “final offer” to SAG — the same model that has already been accepted by the AFTRA, the WGA, and the DGA.


The SAG board member said he understands Hamilton and Mulhern’s concerns, but chooses to look on the bright side.


“I think the terms are as good as they can be at this time. The advertising industry is having very serious setbacks right now,” the board member said. “I know that everybody wants more. But we protected Class A, and we established reasonable residuals for the usage of commercials even in the new media space.”


The board member declined to comment on whether SAG will soon move to reignite stalled talks with the AMPTP, but he indicated that moves are being made behind the scenes.


“There have been ongoing discussions throughout the commercials contract,” he said. “While the left hand has been busy, the right hand hasn’t been at rest. I am hopeful that there are going to be some developments.”