SAG-AFTRA Board Approves TV/Theatrical Agreement

SAG-AFTRA Building - H - 2020

The deal now goes to the members for expected ratification.

The national board of performers’ union SAG-AFTRA, meeting via videoconference Monday, approved the new TV/theatrical agreement reached earlier this month with major motion picture and television studios, the union announced.

The vote was 67.61 percent in favor and 32.39 percent opposed, reflecting political strains in the union. The three-year agreement, which came after six weeks of bargaining, now goes to the membership for ratification, which is expected. If ratified, the new agreement will be retroactive to July 1.

“This deal represents the needs and interests of our members as they shared them with us during our national Wages and Working Condition meetings held across the country,” said union president Gabrielle Carteris. “We achieved a 26% increase in streaming residuals. In addition, a terrific wage package and an outsized increase in SAG-AFTRA Health Plan contributions. I am confident that this future-focused agreement is the strong foundation we need to evolve with the significant changes in our industry and our employers’ business models.”

Ballot materials will be posted and available Wednesday, and will include a deal summary and arguments for and against the pact. The latter, a “minority report,” is being included despite the "No" vote on the board falling shy of level that triggers such a report.

The union said in a statement that the pact is “the most lucrative deal the union has ever achieved.” Key economic terms broadly mirror the Directors Guild of America pact that was ratified April 3 in a process called “pattern bargaining,” leading a union-side source critical of the deal to complain prior to the board vote that all but $9 million of its $318 million value is derived from pattern items that the DGA achieved. “Why did that take six weeks of negotiation?” asked the source, speaking on condition of anonymity.

“In voting to recommend approval of this forward-thinking agreement to our members the board is helping to usher in a new era for how our members work and earn a living,” said SAG-AFTRA national executive director David White. “We achieved unprecedented increases in residuals in the fastest-growing category, we secured ground-breaking protections for members in the areas of nudity, simulated sex and sexual harassment, and we strengthened our benefit plans.”

Ultimately, the performers’ union, like the DGA, agreed to a concession on broadcast syndication residuals that will cost the actors $170 million over eight years, said another union-side source, but in return for more than $750 million in streaming residual gains. Union-side critics said that this will favor actors whose shows are streamed at the expense of those whose series are syndicated, but the source close to the union said that there are only about 15 series currently playing in broadcast syndication. SAG-AFTRA previously noted in a statement that the compromise would make syndication more feasible and lead to new revenue.

The total projected funding increase for the benefit plans for the next three years is $97 million and includes $54 million in additional funding of the SAG-AFTRA Health Plan, the union said. 

That a deal was made at all may be a product of the COVID-19 era. AMPTP stakeholders are so divergent — Amazon and Apple are streamers, NBCUniversal is a cable conglomerate subsidiary, Sony TV is primarily a B2B supplier — that it’s difficult to make an agreement work, said the source close to the union, who added, “Were it not for the pandemic, SAG-AFTRA would have gone on strike.”

The member referendum on the new agreement will be conducted via online vote, with paper ballots available on request. Members who are eligible to vote will receive an instructional postcard that will be mailed on or about July 1. Ratification votes received by the voting deadline of 5 p.m. PDT July 22 (electronically or by mail) will be tabulated on the same day. Informational meetings for members across the country to discuss the tentative agreement are scheduled beginning the week of July 6. Information about the agreement will also be posted online prior to the balloting period.

The contract talks, which began April 27 and concluded June 10, were led by Carteris, chairing the union’s negotiating committee, and White, serving as SAG-AFTRA’s chief negotiator. Alliance of Motion Picture and Television Producers president Carol Lombardini was lead negotiator for the AMPTP.

In other business, executive vice president Rebecca Damon, White, and COO Duncan Crabtree-Ireland updated the board on the developing protocols governing a safer return to work.

As previously reported (and with additional details as noted), highlights of the tentative agreement include:

* Value. Total package valued at $318 million over three years.

* Wages and Benefits. Wage increases of 2.5 percent in the first year plus a 1 percent increase in SAG-AFTRA Health Plan funding (forecast to generate approximately $54 million in additional funding for the next three years), 3 percent wage increase in the second year and 3 percent wage increase in the third year, with options to divert 0.5 percent to SAG-AFTRA Health Plan or the SAG Pension Plan/AFTRA Retirement Fund in years two and three. This mirrors the DGA deal, which achieved 3.5 percent wage and benefit increases in the first year and 3 percent increases in years two and three.

* Streaming Platforms. Improved residuals for original programming made for high-budget subscription streaming platforms like Amazon, Disney+, Hulu and others. The improvements, which appear to mirror what the DGA achieved, include:

    - Lower (better) budget thresholds for high-budget subscription streaming. This reduces the budget needed to trigger the high-budget subscription streaming terms, thereby increasing the number of streaming programs that benefit from improved terms.

    - Better residuals formulas. The new deal increases the ceilings that cap the amount of performer compensation included in the residual calculation, increases the percentages that are applied to performer compensation to calculate the residual for the first three years of availability of a program, and increases the percentage used to calculate the residual for use of a program on an affiliated foreign streaming service.

    - Eliminating “grandfathering.” The application of “grandfathering” will be nearly eliminated by year two of the agreement so that new episodes of existing series receive the benefit of the improved formulas. 

    - Ad-supported streaming. The agreement adjusts the formula for advertiser-supported streaming of high-budget subscription streaming programs that are exhibited on a related platform.

    - New platforms. The agreement provides clarity for how subscriber counts are determined for newly-launched subscription streaming platforms.

The AMPTP notably does not include Netflix, but a separate 2019 deal between the streamer and the union includes a clause that can make many provisions of the new deal become applicable to Netflix unless the platform objects.

* Broadcast Syndication Residuals. “Recognizing the continued decline of broadcast syndication and the inherent challenges to producers in syndicating under a fixed-residual in the current market,” said the union previously in a statement, the new deal conforms to the pattern set by the DGA by replacing the existing fixed residual with a 6 percent revenue-based residual in order to secure improvements in high-budget subscription streaming, the fastest growing part of the business. Programs that are currently syndicated under an existing license will continue to pay residuals under the current, fixed residual formula through the duration of the license, including any extensions. Also, for performer contracts entered into on or after July 1, 2020, the new syndication residual may not be advance paid, ensuring that performers actually receive checks for future syndication exhibition of their work.

* Platform Changes. Again mirroring the DGA, the union agreed to additional flexibility for producers to find the best platform for their shows by giving them certainty that they can pay residuals as though the program was always going to be made for the platform on which it ends up initially exhibiting. This provision applies to shows made for television and subscription streaming services. The provision includes terms protecting performer compensation in the event of a platform change.

* Nudity / Sex Scenes. The union achieved improvements to protections for principal and background performers working in the nude or performing in simulated sex scenes, including improvements to notice and consent requirements. New details – the agreement’s improvements to protections for performers working in the nude or performing in simulated sex scenes include stricter safeguards at auditions and interviews; a 48-hour review period for riders; clarity to the authorized use of digital doubles and digitization; access to discuss the terms of the rider; improved stringent rules during production, including closed set definitions, prohibition of recording with personal devices, improved on-set communication, and access to a cover up, such as a bathrobe; and additional security and written consent requirements around nude photography. Many of these improvements apply to both principal and background actors.

* Sexual Harassment. The new deal also includes improvements to provisions governing sexual harassment for all performers.

* Travel. The new agreement also conformed to the DGA’s extension of the existing domestic travel protocol by allowing international short flights (less than 1,000 air miles) to be booked as coach internationally. Long-distance flights will still require producers to travel performers in business class. In addition, the union secured an additional protection requiring access to private lounges and priority boarding privileges, when available for short trips in coach outside of North America. This provides security for performers who may be recognized in these airports due to exhibition of their work in international markets.

* Stunt Performers. The new deal includes improvements to how overtime is calculated for weekly stunt performers employed on episodic series.

* Money and Schedule Breaks. The union achieved improvements to money and schedule breaks, which are contractual provisions that determine when particular provisions come into play.

* Background Performers. The contract includes an additional covered background position for West Coast episodic productions, commencing in year two. New detail – the union said this will result in an additional 2,100 background jobs per year under historical employment patterns. (However, whether historical patterns remain a guide in the coronavirus era may be an open question, even when and if a vaccine becomes available.)