SAG-AFTRA, Agencies Persuade Some Studios to Pay Actors Idled Under Contract During Pandemic

An empty Hollywood Boulevard- May 5, 2020 - Getty - H 2020
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Who's paying and who's not? While Netflix decided to compensate its actors their full guarantees on some shows, others are said to be weighing their path forward.

What’s a union to do about inadequate contract language when members are taking it on the chin? That’s the problem confronting SAG-AFTRA: Some television studios are holding actors under contract on unpaid “hiatus” during the pandemic rather than paying them as per force majeure provisions. That’s because 2009 revisions to the SAG TV Agreement made the entire force majeure concept arguably optional.

The union declined to comment, but a source close to SAG-AFTRA, speaking on condition of anonymity, acknowledged the dilemma. As a result, the union has told members, “We are working directly with these employers to find arrangements that work,” and agency and legal sources said the labor organization is closely coordinating with major talent agencies and a handful of talent attorneys in a still-evolving situation.

Indeed, an agency source said union staff are toiling day and night on the issue. But a management-side labor lawyer put it more bluntly.

“SAG-AFTRA is a mashup of Dialing for Dollars and Let’s Make a Deal,” said the lawyer. “They’re calling companies and respectfully acknowledging that the force majeure language doesn’t work.” Added retired management attorney Howard Fabrick, “We used to get into arguments over what constituted force majeure.”

The 2009 changes resulted from studio frustration at paying force majeure claims SAG filed during the 2007-08 writers strike, in response to studio suspensions and terminations starting as early as 10 days into the strike — sometimes termed a hiatus and sometimes denominated as neither a force majeure nor a hiatus. Amounting to $63 million and relating to over 80 shows, the grievances were settled for 33 cents on the dollar and revisions to the then-arguably mandatory provision, dating to 1937.

The clauses are opaque, as neither side has leverage for a clear win. In fact, the revisions added length and complexity. Further changes may result from the current SAG-AFTRA triennial studio negotiations, but for now, as before, a held performer under force majeure is paid half-salary for several weeks, after which the performer can terminate their services unless the studio begins paying full boat. But those half payments aren’t applied against wages payable when production restarts. “That’s a killer,” said the management lawyer.

So instead, said another management-side counsel, “the companies [say] that it’s a hiatus” and thus governed by different provisions in the union contract. Those provide no protection to actors making at least $20,000 an episode (or $150,000 for a 13-episode guarantee), theoretically leaving the matter to individual negotiation and many series regulars out in the cold. Hiatus is a position promulgated by the Alliance of Motion Picture and Television Producers (which had no comment) and disputed by SAG-AFTRA, according to a senior agency source.

But when Netflix — which is not an AMPTP member — decided to pay its actors their full unpaid guarantees on interrupted series in production, that paved the way for SAG-AFTRA and the agencies to persuade a host of others.

HBO and HBO Max agreed to pay, too, albeit on a 25 percent/25 percent/50 percent schedule and then came Amazon (same payment schedule as HBO), Starz and Lionsgate (each 25 percent x 4) and others, a senior agency source said. Two additional senior agency sources from another agency confirmed the effect of Netflix’s decision, and the HBO and Amazon payment schedules. None of the studios mentioned would comment for this article.

Meanwhile, ABC/Disney is proposing to pay out 50 percent of an actor’s remaining guarantee in 10 equal monthly installments on some shows, according to sources from two agencies. Why the long schedule? “They want extra protection,” said an agency exec. “What if production doesn’t resume until January?”

Despite the varying payment schedules, there’s one common thread uniting these studios: Most are making only partial payments in advance of production, because idled actors paid now may again need — and demand — money when they resume work.

Yet some studios are taking a different tack. In the broadcast world, NBCUniversal and CBS have yet to pick a course of action, sources said. And Showtime and Sony are still deciding what to do — even though on one series, Sony had force majeured the recurring actors but not the series regulars, according to a source. That differential treatment may seem surprising, but the 2009 SAG revisions explicitly permit even actor by actor cherry-picking.

For its part, Skydance declared a hiatus on the Isaac Asimov-based Foundation series for Apple, according to an agency source, but force majeured its actors on 11 Netflix series. (Since Apple is not a studio, the payment situation on its shows is said to be varied from producer to producer.) And Endeavor Content has put actors on unpaid hiatus, said an agency source, while Legendary is said to be paying half guarantees.

“It’s very inconsistent,” said the source close to SAG-AFTRA, with an agency source adding that the union will file claims if necessary. “These formulas are not set in stone,” cautions a talent attorney. “It’s very fluid right now [and] we’re finally getting formal proposals. There will be a lot of negotiation this week and next.”

As if this all isn’t complex enough, there are issues around pilots, too. Paramount, for example, paid one-fifth of a pilot fee to an actor in April to hold the actor, with the payment applicable against the guarantee then later paid an additional one-half of a pilot fee, on a non-applicable basis, to extend the hold, per an agency source. And the issues can vary depending on whether the pilot was interrupted or not.

Then there are motion picture force majeure issues, and various concerns for directors. And another aspect haunts writers, that studios will use the pandemic and government shutdown to trigger force majeure clauses allowing them to terminate overall deals, as many studios did during the 2007-08 writers strike (over 40 deals were axed) — and as Marvel did last month.

Still, cooperation may win out, as retaining personnel will be vital for media companies struggling to reschedule hundreds of shows at once, let alone while maintaining hygiene and social distancing. “They’re trying to keep the band together,” said Sheppard Mullin management attorney Richard Kopenhefer. “I don’t think the studios are ready to throw the furniture off the Titanic.”

May 18, 9:35 a.m. added talent attorney remarks