Unusual TV Wage Gambit in DGA, WGA Deals May Present Conundrum for SAG-AFTRA (Analysis)

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When is a wage increase not a wage increase? When it’s riddled with unexpected carve-outs.

As talks between SAG-AFTRA and the Alliance of Motion Picture and Television Producers continue in advance of a June 30 contract expiration, an analysis by The Hollywood Reporter suggests that setting a basic wage increase could be more tricky than usual.

Increases in wage scale rates usually follow a pattern among the above-the-line unions. The Directors Guild and Writers Guild received nominal 3 percent annual increases in their recent deals, so ordinarily that’s what SAG-AFTRA would receive as well, in a phenomenon called “pattern bargaining.”

The increases are “nominal” because in some cases the actual increase is 2.5 percent or less, with the remaining 0.5 percent (or more) being diverted to the union pension or health plan.

But that’s not what’s problematic or unusual here. Instead, it turns out that those nominal 3 percent increases touted by the unions don’t actually apply to some key television wage rates in the union agreements. Unexpected carve-outs restrict the scope of the increases, a practice not generally seen in previous deals. Instead, a lower set of increases applies.

It’s kind of like being told to expect sunny weather every day next week — except for Monday through Saturday.

There’s a reason the increases were lower: DGA negotiators focused instead on achieving new gains in residuals for programs made for streaming platforms like Netflix and Amazon, as the union stressed. Those enhancements built on formulas the DGA obtained in the last round of negotiations three years ago.

But the tradeoff for the new residuals enhancements — namely, lower basic wage increases — has gone unremarked and unreported. In addition, there was a second tradeoff: certain other key residuals rates were frozen at previous levels.

In any event, rather than annual 3 percent bumps, the wage increases for network primetime shows and similar programming on premium cable and streaming services such as Netflix and Amazon are just 1.5 percent per year for directors in the DGA deal and 1 percent annually in the WGA pact, rates that at best roughly keep up with inflation.

High budget basic cable shows in their second season and beyond, as well as theatrical motion pictures (but not TV movies), do receive the nominal 3 percent increases, as do the WGA’s weekly television floors and the DGA’s below-the-line members, such as assistant directors, even in the fields where directors are receiving small percentage increments.

Those carve-outs create a dilemma for SAG-AFTRA and studio negotiators because the performers' primary television agreement, unlike the DGA and WGA contracts, doesn’t have separate wage rates for different types of key scripted programming. Instead, there is a single rate for day players, another rate for weekly actors, various rates for singers and dancers, and so forth.

So if the DGA and WGA nominal 3 percent bumps don’t really apply to most major television categories, what will SAG-AFTRA get?

Wage scales for theatrical movies will probably receive nominal 3 percent increases, but in television the union may have to abandon uniform rates, accept a lower nominal rate — or like the directors and writers guilds, advertise a victory that perhaps needs an asterisk.

Spokespeople for the three unions had no comment.

6/14/2017 7:58 a.m.: Updated with note regarding residuals.