What SAG-AFTRA and Studios Need to Resolve as Contract Talks Resume

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Optimism for a strike-ending deal is high as issues like streaming compensation and AI consent are on the table

AMPTP SAG-AFTRA strike talks
SAG-AFTRA president Fran Drescher, left, and AMPTP president Carol Lombardini. (Christopher Smith/TheWrap, Getty)

SAG-AFTRA and the Alliance of Motion Picture and Television Producers are set to return to the negotiating table Monday — just eight days after the WGA reached its own deal — with several issues that need to be resolved in order for Hollywood to resume production.

Many actor-specific issues will be discussed in the negotiating room, but the biggest topics will be increased compensation to counter declining real wages — particularly when it comes to streaming — and ensuring that actors have control over whether their performances and likenesses are replicated by AI programs.

Once again, the quartet of CEOs that took over talks with the WGA — Disney’s Bob Iger, Warner Bros. Discovery’s David Zaslav, NBCUniversal’s Donna Langley and Netflix’s Ted Sarandos — are expected to be in the room negotiating with the actors’ guild’s negotiating committee, led by chief negotiator Duncan Crabtree-Ireland and guild president Fran Drescher.

Insiders on both sides say there’s confidence that a deal can be reached, though no one will know for sure what will need to be done to get there until the two sides meet and go over the latest proposal. WGA negotiating committee members told TheWrap last week that confidence that a deal could be reached soared once they saw the new counterproposal from the studios, which finally addressed the terms that the guild demanded not go ignored when their strike began.

While there isn’t complete overlap between the sticking points that led to the WGA strike and those that led to SAG-AFTRA’s, Loeb & Loeb entertainment chair Ivy Kagan Bierman believes that the progress that the studios and AMPTP made in general with the WGA should help grease the wheels for a SAG-AFTRA contract.

“The studios have moved so much from when these strikes began, discussing contract points like AI protections that at the start of the WGA talks they weren’t willing to offer,” said Bierman, who has experience negotiating contracts on behalf of both talent and studios. “A number of the hurdles have already been cleared, and it’s clear that the studios are driven to get a deal done.”

As is standard for labor talks, SAG-AFTRA and AMPTP are keeping their plans for these talks confidential, but there are some key points that will be worth examining if and when these talks yield a tentative agreement:

Where’s the money coming from?

One of the big divides that SAG-AFTRA and AMPTP couldn’t bridge during the talks in June was on the issue of minimum rate increases. Both the actors’ and writers’ unions were focused on fighting back against the AMPTP’s decades-old practice of pattern bargaining, in which they would hold firm on contract terms that apply across different guilds.

“We couldn’t completely overthrow it. There are still parts of this contract that we agreed to that the AMPTP patterned after the DGA deal,” WGA negotiating commitee co-chair David A. Goodman told TheWrap last week. “But we stuck firm to demands that were unique to writers until the studios understood that we wouldn’t accept any deal that didn’t properly address them.”

The AMPTP is likely to use pattern bargaining to hold firm on the 12.5% compound rate increase on basic minimum that it negotiated with the Directors Guild and which the WGA later agreed to: 5% in the first year of the contract, 4% in the second, and 3.5% in the third. SAG-AFTRA was previously pushing for a 19% compound increase, including 11% in the first year, to account for rising inflation and cost of living.

The WGA, however, didn’t need that basic rate increase, as it was able to secure pay raises for all of its writers through other means such as guaranteed employment for a certain number of writers through the production process and a minimum number of weeks paid at scale rates for writers of Appendix A shows, which include comedy-variety.

One option that SAG-AFTRA may take in lieu of pushing for basic rate increases is to secure pay rates for specific types of performers in other parts of the contract. In its proposal comparison released the day the strike was announced, SAG-AFTRA asked for things like increased pay for background actors, compensation for singers and dancers when they are required to both sing and dance for a project and closing loopholes that have resulted in lower pay for stunt coordinators such as not being able to receive residuals.

Much like the WGA — perhaps even more so — SAG-AFTRA covers the work of a wide variety of performers and is working to ensure that no one in their union gets left behind in this contract. If dramatic across-the-board increases in minimums are no longer on the table, type-specific contract language for each kind of performer may be the solution to ensuring higher pay.

What will a deal on streaming look like?

By far the biggest sticking point between actors and studios is streaming compensation. Even if higher production pay is secured for performers, the issue of declining linear TV residuals has been on the minds of many SAG-AFTRA members for years, and the union wants a new compensation structure to reflect streaming’s new status as the dominant entertainment medium.

In June, the guild proposed a structure in which a percentage of each streaming service’s revenue is shared among SAG-AFTRA members, using third-party viewership data to determine how much each performer gets. That proposal was flatly rejected by the AMPTP with no counterproposal offered.

If the studio CEOs are approaching these talks the way they did with WGA earlier this month, it’s probably safe to assume that they will propose some alternative model of streaming compensation. It’s possible that it may be similar or identical to the bonus system agreed to with the WGA, in which writers receive additional cash if 20% of a streaming service’s subscriber base watches a TV episode or film that they wrote in the first 90 days of release.

The question though is whether such a model, or a different one presented by the studios, will be accepted by SAG-AFTRA’s membership. In an op-ed for The Los Angeles Times, Nelson Cheng, a union member since 2010 whom has never made enough in a year to qualify for the guild’s health plan, made the case that SAG-AFTRA must push for a full structure for streaming residuals to be included in their contract.

“What this fight should be about is allowing working actors the chance to earn a livable wage with reasonable health coverage. Reasonable residuals have to be part of that,” Cheng wrote.

AI consent and compensation

The most hotly discussed issue, and the one that might take the longest to resolve, is artificial intelligence. While much of the language regarding AI use in the WGA contract was based around a potential future in which technology is powerful enough to create a production-ready script, AI is already being used to replicate the voice and likeness of performers.

Back in August, top studio executives told TheWrap that they were confident that a fair deal could be reached on AI with SAG-AFTRA, saying that the offer they made to the guild prior to the start of the strike was far from their final offer. It’s the AMPTP’s belief that with enough time, terms can be reached on performers receiving proper compensation for digital replicas of themselves and ensure that such replicas cannot be made without their fully informed consent.

But given the stakes and the enormous potential that AI has to impact the livelihoods of actors, SAG-AFTRA is certain to pore over every word in the contract and make sure that the language around AI is satisfactory, as they did in June when the studios’ last proposal, according to guild insiders, had ambiguous language that SAG-AFTRA felt could be exploited against its members.

Comments

One response to “What SAG-AFTRA and Studios Need to Resolve as Contract Talks Resume”

  1. Ted Faraone Avatar
    Ted Faraone

    The problem with a commitment from the studios to the actors regarding something akin to using actors’ images in artificial intelligence is that the studios regularly renege on such commitments if they think they can get away with it.  Now, regarding AI, has anyone ever met a studio exec whose “intelligence” was not artificial?

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