SAG-AFTRA, Studios Reach New TV and Theatrical Agreement

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The agreement caps six weeks of bargaining via videoconference.

Performers’ union SAG-AFTRA and major motion picture and television studios reached agreement Wednesday on a new three-year TV/theatrical deal, the parties announced Thursday, capping six weeks of bargaining via videoconference.

The union and the Alliance of Motion Picture and Television Producers had been operating under a press blackout since talks began April 27. The current contract expires June 30. The new agreement now goes to the SAG-AFTRA national board for review, and then to members for a ratification vote.

The talks were led by union president Gabrielle Carteris, chairing its negotiating committee, and national executive director David White, serving as SAG-AFTRA’s chief negotiator. AMPTP president Carol Lombardini was lead negotiator for the AMPTP.

“We are living in transformational times,” said Carteris. “With all that is happening in the world right now, we accomplished something significant, with gains in streaming residuals and increased contributions to the benefits plans.”

According to the union, 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 Directors Guild of America pact that was ratified April 3, 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 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.

* 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. 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.

The union summary made no mention of force majeure and hiatus provisions, some of which the studios contend allow them to hold actors indefinitely until production is resumed. But that matter was already a subject of discussion between the union and studios, outside the contours of formal bargaining, and the union had persuaded some studios to pay idled actors.

“I am proud of the historic protections we achieved for SAG-AFTRA members, particularly women working in scenes related to nudity and simulated sex,” Carteris said. “Working with this negotiating committee has been an honor. They have distinguished themselves with their commitment, dedication and drive. After participating in more than a decade of negotiations, this is one of the most meaningful packages we have ever  secured. Fighting for the needs of the membership, we looked to the future and planned smartly for where our industry is going. This is a real and well-deserved victory.”

Carteris also congratulated the negotiating committee and union staff, including White and chief contracts officer Ray Rodriguez.

“Our negotiating committee members, led by our fearless President Gabrielle Carteris, were a collaborative and disciplined force to be reckoned with,” said White. “This agreement represents significant and much needed monies to our pension, health and retirement plans, and compensation gains designed to protect the current and next generation of our membership, particularly in the area of high-budget subscription streaming residuals. We also have specific wins for weekly stunt performers and background performers, in addition to language codifying much-needed improvements in the critical area of nudity and simulated sex scenes.”

White also congratulated Rodriguez and the union’s staff.

Meanwhile, the WGA continues talks with the AMPTP ahead of a June 30 contract expiration after a May 1 expiration was extended. The union has released extensive details on its bargaining position, which goes beyond what the DGA and SAG-AFTRA achieved.

Writers have continued working from home and via virtual writers rooms since the economic lockdown in March, but the situation is quite different for actors, who are suffering from the production shutdown as well as the loss of side gigs in many cases. Despite the consensus industry guidelines on resuming production that were unveiled June 1, SAG-AFTRA has signaled that it may want greater assurances of safety, and it previously instructed members to obtain union permission before returning to work.