SAG-AFTRA Commercials Contract Ratified Overwhelmingly

SAG-AFTRA union co-president Roberta Reardon
SAG-AFTRA union co-president Roberta Reardon
 Michael Buckner/Getty Images

SAG-AFTRA members ratified their new commercials contracts by a vote of 96 percent to 4 percent, the union announced Friday. Ratification was expected, as both the commercials negotiating committee and the union’s national board unanimously approved the contracts, and no opposition had developed.

All members in good standing as of April 1, 2013 — about 130,000, according to the union — were eligible to vote. That number reflects about 20 percent of members whose dues were delinquent, a percentage that was similar within SAG before the union merged with AFTRA. Thirteen percent returned ballots, 97 percent electronically.

“Not only are these the first major contracts negotiated as SAG-AFTRA,” said union co-president Roberta Reardon, “the contracts’ provisions provide for great improvements in the lives of our members and their families.”

Union co-president Ken Howard said “The commercials agreements represent important gains for tens of thousands of our members across the country and address longstanding concerns which bring the commercials agreements up to date in a variety of areas.”

“These contracts represent solid improvements and demonstrate the value of the collaborative relationship we’ve developed with the [industry negotiators],” said SAG-AFTRA national executive director David White.

The agreements — one for television and one for radio — are effective retroactive to April 1, and run through June 30, 2016.

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According to the union, the contracts will result in $238 million in wage increases and other payments for all categories of performers, improvements in cable use fees, increases in payments for work on the Internet and new-media platforms, and an increase in the late-payment fee. 

Key details of the three-year deal include the following:

* Wages: One-time 6 percent increase. The increase is effective over the term of the contract (April 1, 2013 to March 31, 2016) and is mathematically equivalent to 2.9 percent annual increases. That compares with the 2 percent annual increases that have become customary in Hollywood labor deals.

* Spanish-Language Commercials: Program fees increase by 10 percent and wild spot rates by 5 percent, in addition to the general wage increase.

* Pension and Health: The new P&H rate is 16.8 percent, up from 15.5 percent.

* Meals: Meal allowances increase by about one-third to one-half, and the travel per diem by about 15 percent.

* Internet and New Media: Usage cycles for commercials made for the Internet or new media, or for commercials moved over from traditional media, may be either eight weeks or one year. Cycles must be consecutive unless holding fees are paid, and the maximum period that commercials may be used is 21 months from the date the commercial was shot. Compensation rates are unchanged for commercials made for the Internet or new media (133 percent of the applicable session fee for eight-week cycles and 350 percent for one-year cycles), but are increased for move-over commercials (now 150 percent and 400 percent).

* User-Generated or Crowd-Sourced Commercials: The new commercials contract permits user-generated or crowd-sourced commercials as entries to an Internet-based contest. No contract provisions (such as required fees) will apply to such commercials when they are exhibited on the Internet during the contest, but if exhibited thereafter, the provisions of the contract will apply. Nonwinning contest entries must be removed from the Internet.

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* Commercials with Nonactors: The new commercials contract permits Internet commercials that record people in public, including at live events or interviewed at public venues or on the street, or via a hidden camera. So long as the dialogue is not scripted and the people are not cast for the commercial, the contract provisions will not apply.

* Cable: The cable cap increases from 2,000 units to 3,000. This increases the actor’s potential compensation for commercials that air on cable.

* Extras: Extras will now only be entitled to receive the agent’s commission as part of their fee if the extra has an agent and the agent procured the job for the extra.

* Data Processing: By March 31, 2014, all commercials must use Ad-ID as the commercial identifier, and all talent payroll reports must be filed electronically.

* Waivers: Various waivers are now considered to be part of the contract, and one or two waivers have been added.

* Gross Rating Points: The so-called GRP compensation model, a goal of the industry, will continue to be studied.

* Other Provisions: According to the source, there are roughly two dozen additional changes that were negotiated.

Formal negotiations between the 34-member (26 seated members and 8 alternates) SAG-AFTRA Negotiating Committee and the Industry began February 14 and concluded April 6, at 1:49 a.m. EDT, in New York. Balloting began May 1.

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This is the first national contract referendum for SAG-AFTRA. Paper ballots were available on request, but the default process was greener this year than in the past: Postcards were sent, rather than whole ballot packets; the latter were available online. Balloting was online, unless the member requested a paper ballot.

In addition, the union told The Hollywood Reporter, members were advised of the ballot process via several e-mail blasts to all eligible voters, messaging through social media, automated telephone calls, and prominent placement on the SAG-AFTRA website.

The advertising industry was represented by Douglas J. Wood, Stacy Marcus, and David Weissman with Reed Smith LLP; Linda Bennett with Saatchi & Saatchi; Kim Stevens with Arnold Worldwide; and Kathleen Quinn with the American Association of Advertising Agencies (known as the 4A’s).

SAG-AFTRA was represented by co-president and negotiating committee national chair Roberta Reardon, national executive director and chief negotiator David White, Negotiating Committee vice chairs Sue-Anne Morrow, Allen Lulu, Ilyssa Fradin, and David Hartley Margolin, co-lead negotiators Ray Rodriguez and Mathis Dunn, and senior advisor John McGuire.

In separate news, IATSE announced late last week that it had reached a new three-year commercials contract. The deal, whose terms were not released, commences October 1, 2013.

IATSE’s deal, like that of the DGA, is with commercial producers (the Association of Independent Commercial Producers (AICP)), whereas SAG-AFTRA’s is negotiated with the advertising agencies and national advertisers (the Joint Policy Committee of the ANA-AAAA, i.e., Association of National Advertisers, and American Association of Advertising Agencies).

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