Union Wish List Includes A Substantial Increase In Cable Residuals.
By Robert Goldrich
The Screen Actors Guild (SAG) and the American Federation of Television & Radio Artists (AFTRA) exchanged proposals last week (1/24) with the Joint Policy Committee (JPC) of the American Association of Advertising Agencies (4A’s) and the Association of National Advertisers (ANA) for a new TV and radio commercials contract. The current pact expires on March 31.
Although formal negotiations between the unions and the JPC aren’t scheduled to get underway until Feb. 14 in New York, the posting of the proposals on SAG’s Web site has elicited an earlier-than-usual industry buzz. The preface to the 35-page JPC and 18-page SAG/AFTRA proposals read: "This is the first time that the unions have released so much information to their memberships so early in the process, and it represents an important step toward a successful contract campaign."
The proposals amount to wish lists for both parties, representing in some cases a starting point for collective bargaining. Prominent on the union wish list is a significant increase in residuals for broadcast spots shown on cable TV. The proposal stated that "all principal performers shall be paid for each cable use in each 13-week cycle an amount equal to 37 percent of the rate payable for a Class A [broadcast network] use of the corresponding number, with the exception of use number one, which shall be equal to a session fee."
Per this proposal, TV commercials shown on basic cable would pay residuals equivalent to approximately one-third the amount the same spots would command when shown on the major broadcast networks. The current formula—which is based on the number of basic cable networks that run the commercial during a 13-week cycle—yields considerably lower cable residuals.
The cable residuals issue figures to loom large at the negotiating table. Newly elected SAG president William Daniels ran on a platform that called for the union to take a harder line with the ad industry in upcoming talks, particularly in the area of spots shown on basic cable.
The unions also proposed instituting increased pay for foreign use of American commercials. For spots aired in Europe (except the U.K.), the unions advocated raising the minimum payment from two to five additional session fees. For U.S. TV commercials in the U.K., a union-drafted contract amendment called for an increase in the minimum from three to six additional session fees. (For spots airing exclusively in the U.K., the use rates set forth in the British Actors Equity Contract apply.) For all other countries outside the U.S., the union proposal supported a hike from one to four additional session fees.
Another SAG and AFTRA-penned proviso would provide extra jobs for union extras. The union wants to see the new contract "increase the number of registered extra performers [from 30 to 75] who must be employed before non-registered [non-union] persons may be employed to perform crowd work" in a spot.
In the area of stunt performers, the unions are looking to increase opportunities for women, ethnic minorities and people with physical disabilities. For example, rather than asking employers to strongly consider performers of minority heritage when stunt doubling for an actor of the same race, the new proposal would make such hiring mandatory.
JPC
While the unions are asking for larger employer contributions to their health plans, the JPC has proposed a cap on such payments tied to no more than the first $500,000 earned by a performer annually.
The JPC also wants to revise the current provision that requires overtime and double-time pay for weekend work. Instead, the JPC has proposed a clause that pays for work on Saturdays and Sundays "at straight time unless those days are the sixth and/or seventh day of consecutive employment of a principal performer for a single producer."
Other JPC proposals include deleting spot airplay in Mexico from the contract’s computation of use fees; increasing the PSA waiver for principal performers from one to two years; changing the status of performers operating hand, stock or string-manipulated puppets from on- to off-camera principals; and decreasing the pay of non-speaking performers who appear on camera for no more than two seconds.
RUNAWAY FACTOR?
Though not mentioned in the JPC laundry list of proposals, the runaway production issue has been bandied about in industry circles vis-à-vis the pending commercial contract talks. SAG has been vocal in its opposition to filming leaving the U.S. for foreign countries, and last year the union and the DGA co-sponsored an independent study chronicling the impact of runaway business on the American economy (SHOOT, 7/9/99, p. 1). SAG and the DGA have hired Washington, D.C. lobbyists in a quest for legislative solutions to the runaway problem. The unions are also part of the National Entertainment Coalition (reported on by SHOOT in last week’s lead story).
Yet while SAG has proposed the aforementioned increase in cable residuals, others contend that the basic broadcast residuals system is, in part, causing some advertisers and agencies to produce spots outside the U.S. As earlier reported (SHOOT, 7/23/99, p. 1), in an open letter to the industry, the Association of Independent Commercial Producers (AICP) addressed the runaway issue. Among the remedies suggested in the AICP letter was a restructuring of "costly residual use fee systems." The letter contended that "usage fees for onscreen talent serve as strong financial deterrents" to advertisers shooting domestically. While it’s clear in the SAG contract that a signatory cannot leave the country to avoid terms of the agreement, a production house and ad agency can opt for a foreign shoot to save money in production. And once that’s done, some clients are realizing even larger savings via talent buyouts, according to the AICP.
The AICP is not party to the talent contract negotiations, which are between the unions and the JPC. In an address to SAG membership in December, Daniels related that the goal of the upcoming negotiations is to attain "a fair contract without a work stoppage." The unions have struck in the past, holding a three-week ad industry work stoppage in ’88.
As earlier reported (SHOOT, 1/7, p. 1), AICP president Matt Miller said that in the worst possible case scenario of a strike, "a work stoppage will not stop work." He noted that there are non-union talent options available, both domestically and internationally.
Endeavor Group Sells Professional Bull Riders, On Location and IMG To Parent of WWE and UFC
The parent company of WWE and UFC is buying Professional Bull Riders, On Location, and IMG from Endeavor Group in an all-stock deal valued at $3.25 billion.
The deal is part of Endeavor's efforts to shed some of its assets as it looks to be taken private in a proposed transaction with private equity firm Silver Lake, which was announced in April. Ariel Emanuel, who serves as CEO of Endeavor, is also executive chair and CEO of TKO.
Professional Bull Riders is a bull riding league that has more than 200 annual live events, approximately 1.25 million fans, and reaches more than 285 million households in more than 65 territories. On Location is live event company for more than 1,200 sporting events, such as the Super Bowl, Ryder Cup and NCAA Final Four. IMG is a distributor and producer of sports content, packages and sells media rights and brand partnerships, and provides consulting, digital services and event management to clients such as the National Football League and National Hockey League.
Parent company TKO Group said Thursday that the acquisition from Endeavor Group will complement its existing businesses as well as broaden its reach in the premium sports market.
"PBR, On Location, and IMG are industry-leading assets that meaningfully enhance TKO's portfolio and strengthen our position in premium sports globally," TKO Chief Operating Officer Mark Shapiro said in a statement. "Within TKO, they will help power the growth of our revenue streams and position us to capture even more upside from some of the most attractive parts of our sports ecosystem: media rights, live events, ticket sales, premium experiences, brand partnerships, and site fees."
As part of the deal, Endeavor will receive about 26.14 million common units of TKO... Read More