AFTRA Revises Basic Cable Residuals Statistic

4:05 PM PST 03/07/2012 by Jonathan Handel

The union changes a statistic from 91 percent to 84 percent, redefines the phrase “on the air” and declines to provide hard data.

Monday morning, a person authorized to speak on behalf of AFTRA contacted The Hollywood Reporter to reveal a surprising statistic: 91 percent of AFTRA basic cable shows on the air as of mid-May 2011, the source said, were produced under the industry standard “Sanchez” residuals formula that generates run-by-run payments.

That was newsworthy, because the Sanchez formula contrasts with what AFTRA was better known for using in basic cable: an “exhibition day” or “exhibition window” approach that typically generates little or no residuals. The union has been sharply criticized for using such formulas, which AFTRA says were necessary in order to achieve unionization of the work at all.

It’s widely believed that AFTRA still predominantly uses such formulas, but the statistic purported to prove otherwise. We ran a story on this disclosure Monday afternoon. The source read the story and reaffirmed the 91 percent figure shortly thereafter.

The next day, however, a source within AFTRA, as well as the previous source, revised the statistic, telling THR that the actual figure is 84 percent, and that the 91 percent figure was based on a subset of AFTRA basic cable series, known as OPO or “one production only” shows.

That is not how the statistic was presented the day before. The Hollywood Reporter regrets having relied on inaccurate information authorized by AFTRA, and we apologize to our readers.

Despite THR’s repeated requests, AFTRA refused to provide a categorized list of its basic cable shows – or even to provide the numbers that AFTRA says calculate out to 84 percent and 91 percent. Accordingly, THR is reluctantly reporting those figures as unverified.

In addition, the AFTRA source said Tuesday that “on the air” did not actually mean shows that were on the air. Rather, AFTRA said that by “on the air” it meant shows that were either (a) in production, (b) on hiatus or (c) had been picked up to series but were not in production. That appears to encompass both existing shows – even those in their last season – and new ones that haven’t yet commenced production.

In summary, “91 percent of AFTRA basic cable shows on the air” was revised by the union to mean “84 percent of AFTRA basic cable shows that were either (a) in production, (b) on hiatus or (c) had been picked up to series but were not in production.”

The source within AFTRA, and the source authorized by AFTRA, spoke on condition of anonymity.

OPO’s – which are negotiated on a series by series basis – represent only a portion of basic cable series, because AFTRA also has a number of system-wide deals, including those with Disney, MTV, Nickelodeon and Comedy Central. The latter two provide for exhibition day residuals, according to AFTRA.

(All of the formulas and deals under discussion relate to scripted shows. AFTRA also has jurisdiction over unscripted shows, but those are not relevant here.)

The AFTRA source estimated that there were about 95 OPO shows and 10 shows under system-wide deals. Despite several requests, the union refused to provide precise numbers or to state exactly how many AFTRA shows were under Sanchez terms. The union also refused to provide a list of its scripted basic cable shows and indicate the applicable residuals formulas, notwithstanding THR’s requests.

It’s difficult to reconcile the total estimate that the AFTRA official cited as of mid-May 2011 – 105 shows – with totals derived from “show sheets” that the union publishes for Los Angeles and New York. The Jan./Feb. 2012 editions of these list about 41 and 17 scripted basic cable shows, respectively. That’s a total of 58 (with some uncertainty, due to omission of the network in several cases), as compared with the 105 shows that the AFTRA official cited as of mid-May 2011, a date some seven or eight months earlier.

Suggesting an explanation for the approximately 45 show differential (i.e., 105 minus 58), the AFTRA official said that there are no show sheets for domestic production locations outside of Los Angeles and New York or for foreign locations.

However, a review of the LA and New York show sheets disclosed listings for shows shooting in Hawaii, Vancouver, Toronto, Montreal, England, New Zealand, Australia, Capetown and Prague as well as, of course, LA and New York.

With international locations and Hawaii apparently accounted for by the LA and New York show sheets, the figures offered by AFTRA seem to imply that there are roughly 45 AFTRA scripted basic cable shows shot in runaway locations in the continental U.S.

The AFTRA source said that regardless of the exact statistics, the union had made progress for actors by starting with an exhibition day formula and bargaining up. The source said that one of the system-wide deals, with Disney, while originally negotiated with exhibition day residuals, now provided for Sanchez residuals from the very first rerun.

THR requested copies of the union contracts applicable to some of the Sanchez shows, but AFTRA declined to share these. The union did provide – on a not-for-publication basis – two-page contract summaries for four shows that appeared to reflect that the Sanchez formula applies: USA Network’s White Collar and Royal Pains, Spike’s Blue Mountain State, and FX’s Sons of Anarchy.

However, the contract summaries supplied by AFTRA don’t actually correspond to the mid-May 2011 date that the union says the 84 percent and 91 percent statistics are based on. Instead, the summaries encompass a one-year period starting July 1, 2011, i.e., about a month and a half after mid-May. It’s not known whether any of the information would have been different in earlier contract summaries.

As reported in our original story, the union also stated that FX’s It’s Always Sunny in Philadelphia and TV Land’s Hot in Cleveland, Happily Divorced, The Exes and Retired at 35 are all under the Sanchez formula. THR has not seen contract summaries or other documents relating to these programs.

Although the obscure nature and nomenclature of residuals formulas may make the debate seem inconsequential, it isn’t; working- and middle-class actors rely on residuals to survive between jobs. AFTRA does not release statistics about member’s aggregate earnings or residuals, but SAG does. The guild’s data underscore the importance of residuals to actors: on average, roughly 40 percent of a performer’s total movie or TV earnings are residuals.

The figure is almost certainly lower in basic cable work even when the Sanchez formula is used, since that formula is less lucrative than broadcast formulas. Nonetheless, basic cable residuals are money in the pocket.

The initial Monday morning call from the AFTRA-authorized source came just a few hours after THR reported that SAG had signed a discounted basic cable deal. The back-and-forth reflects a degree of continuing tension between the two unions even as they seek to merge.

Reflecting on the situation, the source within AFTRA who spoke on condition of anonymity sent THR a statement after our conversation Tuesday morning. The statement was as follows:

This is exactly why these unions must merge. Not because of so-called “undercutting”. Because as separate organizations, honest fact-based discussions over how to approach an emerging platform don’t occur and instead get politicized. As one union, such issues could be discussed together as one body to determine a rational approach, based on facts (and proprietary information that each union has but cannot share as separate institutions), which elected members can reach consensus on.  This debate over who undercut who – when, in fact, it was never about undercutting at all – is an example of the divisiveness that happens when we are separate:  allowing one set of members to consider another set of members as “the other” rather than working together in recognition that we are all “us”.

——–

Bookmark The Hollywood Reporter’s Labor Page for the most in-depth coverage of entertainment unions and guilds.

Email: jhandel@att.net

Twitter: @jhandel

comments powered by Disqus