The hits keep on coming: SAG NEC to lead attack on AFTRA deal?

Backstage’s Blog Stage is reporting tonight – from industry sources – that the SAG National Executive Committee will meet Friday to plot its campaign against the deal in place between AFTRA and AMPTP.  A SAG rep denies the report saying that the meeting is aimed to brief the leadership on the status of negotiations.  But the NEC is a small group with 19 members (11 from Hollywood, and 4 each from NY and the Regions) – hard to imagine that these key leaders are not already in the loop on the negotiations. It is far more likely that the Allens are trying to push something through, and that might include stating formal opposition to the AFTRA deal.
Backstage quotes entertainment lawyer Jonathan Handel, whom I know and respect, that SAG has the “free speech” right to say what it wants to its members about the AFTRA deal. I question that logic. First, free speech rights apply only to government interference, rooted as they are in state and federal constitutions.  That’s why actors can get fired by private companies if they refuse to say their lines!  Thus, there is no “free speech” right that protects SAG in this particular situation.  
SAG is a California non profit corporation and their lawyers better have thought this through very carefully before they go down this road. Board members, too, since they owe the organization a fiduciary duty. If they interfere with the business relationship that AFTRA has with the AMPTP I think they are taking a huge risk. Stating that they are taking a different position with respect to particular contract terms is one thing, but leading a campaign to influence the internal decision making of a sister AFL-CIO union is quite another. It is certainly unprecedented.
Of course, the Allens are trying to fend off impeachment by the Membership First base that put them in office not a lawsuit. As another source in the Blog Stage story indicates, “tell me the plan, Stan!”  There isn’t one, of course, only more shooting from the hip.  The “get rid of AFTRA” strategy has left SAG backed into a corner.
Here’s a new idea: SAG doesn’t need new leadership – after all the two Allens just do what they are told by the MF leadership; rather, it really is Membership First that needs new leadership. I have always contended that the great contribution of Membership First, and of its earlier incarnations over the last fifteen years or so, has been to re-energize the rank and file and prevent SAG’s drift into just being run like a non-union non-profit such as the ACLU or the Red Cross where the membership is irrelevant. But what is going on inside MF that could lead to such disastrous results?
A longer story by Andrew Salomon on the current situation was posted here on Backstage late tonight. In it he quotes me pointing out the failure of SAG to lead the EMI unions together has led instead to the impasse the Guild now finds itself in:
Union Disunity

Stephen Diamond, an associate professor at the Santa Clara University School of Law and a former candidate to be SAG’s national executive director, said that bargaining separately hurt SAG and AFTRA considerably because it diverted their attention from an important issue: increasing residuals for DVDs, a huge source of revenue for AMPTP companies.

As things stand, it seems SAG will not succeed on this front, as the producers have already rebuffed attempts by the writers to boost the DVD rate, while the directors and AFTRA did not even push for it. Although in early May SAG reduced its demand that DVD residuals be doubled, the AMPTP is very unlikely to yield; traditionally, what it gives to one union, it gives to all.

Diamond argued that the way to secure a boost would have been for all the unions to have united a long time ago, something that was not possible given SAG and AFTRA’s feuding. “Instead of focusing on AFTRA, [SAG] could have been focusing a year and a half ago on DVDs,” he said. “They could have been creating a climate where they were making the argument that the DVD formula is unfair.” As a result of the home video deal negotiated in 1984 — when VCRs were proliferating in the marketplace — the studios keep 80 percent of all gross revenue and give portions of the remaining 20 percent to the unions.

Though many in the industry believe that DVD sales will be surpassed by Internet downloads — and, as a result of contracts negotiated this year, the residual rate for downloads is now roughly double the DVD rate — downloads will not become dominant for at least three years, said Diamond, because the technology for consistently fast delivery has yet to be developed.

Handel agreed that a lack of unity has harmed all the Hollywood unions, not just SAG and AFTRA. He noted management’s effectiveness in playing the DGA off the WGA: While the latter was on strike, the former quickly and quietly negotiated a new contract, whose terms became the basis for deals with the other unions.

Meanwhile, Variety here finds confirmation of the strategic weakness of the Guild from a Wall Street analyst:
“SAG is the last labor union to negotiate with the Alliance of Motion Picture & Television Producers, which reduces its negotiating leverage considerably,” said Marci Ryvicker of Wachovia Capital Markets in a report. “As one source put it, SAG is the caboose on a train that is traveling full speed, yet its demands are the most stringent of all the labor unions.”

Ryvicker noted that SAG suffers from “interunion strife,” making it difficult to achieve the 75% vote threshold required for a strike authorization. She also said that the threat of SAG members filing for “financial core” status — under which a member resigns from formal guild membership but can still work on SAG-covered productions without being disciplined — also makes a strike less likely.

“Our contacts believe that the negotiations between SAG and AMPTP will continue in earnest for the next month but that a contract is likely to be signed by the June 30 deadline,” Ryvicker wrote.

She also estimated that the WGA strike cost the networks a combined $230 million in revenues, with ABC and CBS feeling the greatest impact.



Blog Stage: SAG to Meet Friday to Plan Against AFTRA Deal