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SAG Board OKs Studio Offer, Urges Member Ratification

19 Apr, 2009 By: Erik Gruenwedel


The Screen Actors Guild national board of directors April 19 formally endorsed and recommended guild members ratify the labor contract offered Friday by The Alliance of Motion Picture and Television Producers, the union representing Hollywood studios.

The board voted 53.38% to 46.62% in favor of the two-year agreement, which delivers 3.5% effective annual increases comprising a 3% wage increase and a 0.5% pension and health contribution increase upon ratification, and a 3.5% wage increase in year two.

Actors have been working under an interim agreement following the expiration of the previous deal June 30, 2008.

Ballots will be mailed to eligible SAG members in early May, with an expected return date at the end of the month. Tabulation will occur immediately upon the conclusion of balloting.

If approved by a majority of SAG’s 120,000 members, the new contract would conclude June 30, 2011.

“We’re eager to get our members back to work and to focus now on the challenges ahead, particularly on initiating a comprehensive effort to thoughtfully plan for the future,” said David White, interim national executive director, in a statement.

A faction of guild moderates, seeking to fast track a new contract due to the burgeoning economic recession, earlier this year replaced chief negotiator Doug Allen with a new negotiating team, headed by senior advisor John McGuire.

The new contract mandates minimum fees and first-ever residuals (at a greater percentage than DVD) on ad-supported streams of movies, TV shows, permanent downloads (burn-to-disc), original and derivative new-media programs.

As specified in the studios’ offer last December, movie download residuals would increase from 5.4% of 20% of the distributor’s gross (considered the home video rate) on the first 50,000 units to 9.75% of 20% thereafter. For TV downloads, residuals would increase from the home video rate to 10.5% of 20% of distributor’s gross after the first 100,000 units.

In addition, actors would have jurisdiction on all derivative, made-for new media productions; automatic jurisdiction on all high-budget, original, made-for new media productions; plus jurisdiction on low budget original, new media productions that employ at least one covered performer.

Besides residuals for exhibition of TV and theatrical motion pictures on consumer pay platforms (electronic sellthrough), actors would also receive residuals for ad-supported streaming of feature films and television programs and derivative new media programs.

The contract, which in large part mirrors what the studios offered last summer, apparently does not include language revamping the 20-year-old home video residual agreement — a condition the studios have steadfastly refused to address. The agreement originally applied to VHS, but the subsequent arrival of DVD and Blu-ray made potential residuals a more lucrative prospect.

“I urge members to carefully review both the pros and cons in the referendum materials, and exercise their right to vote,” said Alan Rosenberg, national president of SAG.

Guild hardliners, including Rosenberg, have long argued actors were mislead by studios about the potential of DVD (and subsequent residuals) and vowed not to be duped about new media in the same way.

Industry pundit Nikki Fink on her site, DeadlineHollywoodDaily.com, said history is not on the side of actors when it comes to technology.

“The fact is that not once have the studio and network CEOs been open to renegotiate the contract terms each time a new format caught on,” Fink wrote.

Norman Samnick, an attorney with Bryan Cave LLP in New York who worked on Hollywood labor deals in the ’80s, earlier in the negotiations told Home Media Magazine new media is a similar unknown as DVD was 20 years ago.

“No studio or actor can predict where new media will be in the next 10 to 30 years,” Samnick said. “If it goes wrong, you sit down in three years and negotiate a new deal.”



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