SAG-AFTRA Netcode Contract Negotiations Begin

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Residuals are likely to be in play.

Bargaining has begun between SAG-AFTRA and the major television networks and producers over a renewal of the union’s Netcode television agreement, The Hollywood Reporter has learned. The agreement covers unscripted and non-primetime fare.

The current iteration of the contract has been in effect for over three years and expires June 30. The union negotiating team is led by SAG-AFTRA national executive director David White, and the management lead is ABC labor executive Marc Sandman, on behalf of the four major broadcast networks and Sony’s television production arm. Sandman, rather than AMPTP president Carol Lombardini, has led Netcode negotiations in previous years as well.

Sandman and a union spokesperson both declined to comment. The union had previously announced that talks were scheduled to start May 30. Update: the day after this article published, the union issued a press release stating that talks had in fact begun May 30, under a press blackout.

The Netcode, more formally the National Code of Fair Practice for Network Television Broadcasting, is also referred to as the “front of book” to distinguish it from an exhibit that formerly covered primetime programming. The agreement, which encompasses syndicated programs, daytime serials (soap operas), promotional announcements, variety, quiz, game, reality, talk, news, sports and other unscripted content, was inherited from AFTRA when the industry’s two performers’ unions merged in 2012.

Sources previously told THR that the agreement dated to the 1950s and needs updating to “further monetize and expand audience for these programs.” Among other things, that probably means shifting some residuals formulas from fixed amounts to a percentage of the license fee a producer obtains.

That’s because so-called “fixed residuals” can make exploitation uneconomical if they take too large a bite out of producers’ revenues, whereas a percentage residual scales up or down with the magnitude of the license fee. Fixed residuals can be more lucrative for the performer than percentage residuals — but not if the producer elects to let a show go unexploited.

Finding a balance between those poles may be politically contentious within SAG-AFTRA, where older members in particular mourn the decline of once-sizable rerun fees.

Meanwhile, another union is finding talks unexpectedly difficult: negotiations between the AMPTP and IATSE broke off recently without a deal, ahead of a July 31 expiration. Bargaining is likely to resume after SAG-AFTRA reaches a Netcode deal.

June 1, 4:20 p.m., updated as indicated in third paragraph.