SAG negotiator, president send out words of caution on DGA deal

In an e-mail to Screen Actors Guild members, National Executive Director Doug Allen and SAG President Alan Rosenberg outline criticisms of a recently negotiated deal between directors and studios. They stressed that the agreement would not be a template for an actors contract. The current contract expires June 30:

January 29, 2008

Dear SAG Member:

        Everyone hopes the WGA strike will end with a fair deal for the writers.  There has been much speculation about the impact on the WGA strike of the tentative agreement between the Directors Guild of America (DGA) and the employers' representative, the Alliance of Motion Picture and Television Producers (AMPTP).  Some have rushed to anoint their deal as the “solution” for the entertainment industry.  We believe that assessment is premature.

        All we know of the deal are the general terms described in a joint AMPTP/DGA press release.  That press release leaves many important questions unanswered.  Apparently, many elements of this deal remain unresolved and/or have not been reduced to writing.

        The DGA press release suggests progress in some areas, but until the details are known, that is only speculation.  Several examples:  The formula for new media “electronic sell through (paid downloads or EST)” is based on the higher distributor’s gross revenues, rather than producer’s gross revenues, but the definition of distributor’s gross is vague and not sufficient to protect against manipulation by the employers.  Also, information regarding employer “deals and data” will be available to the DGA to monitor distributor’s gross and paid downloads on the Internet, but the press release does not detail what data, who provides the data, and what happens if the data is not provided.  The devil is in the details.  In the tri-guild audits under the current guilds’ collective bargaining agreements (including the DGA’s), for example, some audits are still open after eight years, because of problems with enforcement under current contract language.

        Some have suggested that the new DGA deal contains a “fair market value” test for revenues included in the new media residuals calculation, to protect against self-dealing when one part of a conglomerate sells new media content to another part of the conglomerate at an unfair, low price in order to reduce residuals.  We hope this is true,  but the press release does not use “arms-length transaction” or “fair market value test” language, and says only, “If  our exhibitor or retailer is part of the producer’s corporate family, (DGA has) improved provisions for challenging any suspect transactions.”  This language could mean anything, and certainly does not guarantee against self-dealing by media conglomerates to hurt creative talent.

        Fair market value and distributor’s gross are two issues that the AMPTP demanded that the WGA take off the table, along with four other items, which resulted in talks breaking off in December.  Now after prolonging the strike for another month, the AMPTP has negotiated these two issues with the DGA.

        That is the good news.  There are also even more serious problems with other provisions described in the DGA press release, particularly those involving new media. For example, why are residuals for electronic sell-through (paid downloads or EST) for directors based on their lower DVD formula (.3%) rather than the higher pay TV formula (1.2%) in their current agreement?  All three guilds – SAG, WGA, and DGA – filed for arbitration to overturn management’s attempt to impose the DVD formula for residuals on the calculation of residuals for downloads under the current agreement.  The DGA stated in their arbitration filings that payment of the lower amount is a violation of the collective bargaining agreement and the proper residual formula is the higher pay TV percentage.  The concession by the DGA in the new deal, to use the formula that management improperly imposed under the current agreement, is an AMPTP roll-back.  The new agreed-upon percentages for television (.7%) or feature films (.65%) are much lower in the DGA deal than the percentage that the DGA claims is appropriate in its arbitration (1.2%).  And these “increases”, which are based on the discredited DVD formula, do not increase residuals on the sale of DVD’s, but only apply to downloads; despite the fact that DVD’s  will generate billions in revenue to the studios and networks for years to come.

        The very high thresholds in the DGA deal for full jurisdiction for made for new media content may well incentivize non-union work below the threshold amounts ($15, 000/minute, $300,000/program, $500,000/series, whichever is lower).  What will stop the industry from making cheap, non-union pilots at below $300,000 per episode, for testing first on the Internet before the productions migrate to broadcast or basic cable?

        Your Guild has signed 210 Internet producers to SAG contracts in the past two years and only seven of them (or 3%) would fall inside the high DGA jurisdictional thresholds.  We have worked hard, just as we do with low budget features, to capture this Internet work and to make sure it is done union.   This DGA proposal appears to abandon jurisdiction over a huge swath of actual Internet productions, which we currently cover.

        This deal gingerly addresses certain issues now, with the apparent hope that in three years or more, revenues will grow and the agreement can be improved to capture more of it.  Bargaining history in the entertainment industry, however, teaches that it is much harder to get a fair share of revenue after management puts it in their pockets for years.  Residual compensation should be based on a fair share of revenue generated by covered content from the first dollar.  Rather than a “percentage of revenue, payment from first dollar” approach to residuals, the DGA deal instead provides for a 17 day window for free streaming of television programs over the Internet without compensation (24 days for the program’s first season).  The deal also allows a one year buy-out of $1200 for Internet use v. $20,000 for one re-run on broadcast television.

        For these specific reasons, and because so much of the new DGA/AMPTP deal is unknown, no one should assume this new deal is a template for anyone else, certainly not for actors.  It is up to the leadership and membership of the DGA to decide if their new deal with the studios and networks is acceptable, but whatever they decide, their decision will not determine what will be satisfactory for the leadership and membership of Screen Actors Guild.  Each guild must act in the best interest of its own membership, including rejecting management-imposed “pattern bargaining.”

In solidarity,            

Alan Rosenberg                      Doug Allen                                 
President                               National Executive Director and Chief Negotiator

More news on the strike

Comments

[REAL WORKER]

Yeah that's right, you should go on strike too. You people are out of your minds.
People are losing their jobs, their children's education, their life savings....and you are still talking strike. The DGA could make a deal but it's not good enough for you actors? Why are you starving? Is George Clooney having problems making his rent? Because 100's of editors, camera men, grips, crafts service, waiters, security guards, runners, assistants and secretaries are having a hell of a hard time making their rent right now. You people make plenty, the DGA set a template for you to make more - take it and shut up.

This is just the rich cutting up the pie. The REAL WORKERS are going bankrupt and you're talking strike. Way to go Actors....you and the writers deserve each other.

[Mike]

The WGA has gotten a lot of support from SAG actors but do you really believe that writers will back us when we need them? No. They will probably get as many scripts written so that they can get them shot before the actors go on strike so that the networks have enough shows to air without interruption just like they did 2003 when they stockpiled scripts in case actors went on strike. SAG has given all their support to striking writers but we are fools if they will do the same for us.

[Mike]

The WGA has gotten a lot of support from SAG actors but do you really believe that writers will back us when we need them? No. They will probably get as many scripts written so that they can get them shot before the actors go on strike so that the networks have enough shows to air without interruption just like they did 2003 when they stockpiled scripts in case actors went on strike. SAG has given all their support to striking writers but we are fools if they will do the same for us.

[paint the town red]

For those of you angry that SAG and WGA won't jaccept the same DGA's terms so that crews, etc. can go back to work, remember this; Hollywood is a union town. We all work as independent contractors and if you don't like it leave. Many TV shows produced in LA could easily be done in Canada, but Showrunners have instead chosen to honor families, employees and their country by staying in LA... Get a "grip" and be grateful, or find a new business...

[andrew]

just wish this would be finished an resolved, the WGA deserve everything they get, where would the broadcasters, and movie industry be without the writers, nobody seese bigger picture in this situation

[REAL WORKER]

SAG supported WGA? Actors crossed the line and showed up for work on shows and movies until the work was done - they didn't support it. Most of them were out of work and they needed something to do. Not a single actor missed a single paycheck during the strike. Now you want the writers who are out of work for months - AND THIS DOWN OF HARD WORKING PEOPLE WHO CANNOT AFFORD TO BE OUT OF WORK - to go on strike again...for you? You actors are even more delusional then I thought.

[Johnny]

Real Worker:
It ain't about you, friend...

First of all, there aren't a lot of working directors out there. There's typically one per film. And those guys get far and beyond the guild minimums, so they don't care about collective bargaining. Second, there are a LOT of writers on tv shows, and even films, and there is a HUGE disparity of fees between the showrunner at the top and the bottom-feeding staff writers, and between the big name film writers and the script doctors who are inevitably brought in to rewrite and polish. The guys at the bottom of the ladder benefit from their CBA as much as the crew your cite benefit from theirs. You're blaming the wrong party; point your wrath toward the guys in the suits who don't want to pare down their $150 million a year salaries. Do you really think they're earning that dough? $150 million a year, think about it. Give me a break, lol...

[JR]

It appears the SAG leadership wants to derail the current informal WGA-AMPTP talks. Either the WGA is working in concert with them to do this (frightening but possible) or SAG is nervous that having 2 out of 3 guilds with settled contracts will undercut their strategy.

And I should add to REAL WORKER's comment about SAG. When you saw all of the photos of actors on the line, notice that many (Grey's Anatomy, etc.) were IN COSTUME. They were inside studios shooting, and walking the line on lighting breaks. Yes, they were still collecting paychecks. As were most of the tv writer-producers walking the line. Little-known fact - most of those folks continued to be paid as producers if their shows remained in production. Wonder if the other folks on the line knew that? And the crews?

This is tearing the town apart. Let's figure it out.

[Writer Fan]

The real worker who made a comment about George Clooney should GET INFORMED. Ignorance is what makes people attack the wrong people. NOT every actor or writer is rich. DO your RESEARCH! Plus you should learn that the DGA people get a lot of money to beging with and the deal they accepted is NOT the right deal for the other guilds. Maybe you only read the information published by the press owned by the same selfish companies. You show your ignorance by implying that all writers and actors earn the same. Talk to several writers from different shows and find the truth. They do not earn what you think. I SUPPORT THE WGA STRIKE!!!