SAG National Board Votes up New TV/Film Deal with Studios

As I predicted, the Screen Actors Guild National Board agreed to recommend membership ratification of the new two year collective bargaining agreement with the major Hollywood studios. The decision came today on a strict party line vote with the Membership First group opposing the deal and New York, Regional Board members, and the Unite For Strength party supporting it.

I was interviewed by The New York Times on the new contract here and here and by Bloomberg here.

The deal breakthrough came earlier this week when SAG negotiators announced a compromise on the two remaining issues: the term of the contract and force majeur. It appears that SAG had to pay a price to recover an early contract expiration date which the Producers had predictably pulled off the table earlier this year when the contract negotiations dragged on some six months or so past the previous contract’s summer 08 expiration date.

The new SAG team, headed  by former SAG General Counsel David White and long time east coast based SAG advisor John McGuire, was apparently surprised when the Producers made it clear they were serious about a three year deal that would have meant SAG’s next contract expiration would come nearly a year after that of the other Hollywood guilds. Of course, that would be a death knell for any chance of building inter-guild solidarity in the next contract round.

This time around the hardline Membership First faction that controlled the Guild from 2005 until the fall 2008 elections seemed content to execute a “go it alone/last in line” strategy that allowed the Producers to whipsaw the other smaller guilds into contract terms that even SAG moderates found inadequate.

For example, the new deal, like that struck by the other guilds, makes no headway on the $20 billion cash cow still critical to studio revenue: DVD sales and rentals income. Ironically, despite all the attention garnered by so-called new media outlets like You Tube and Hulu, these remain huge money losers for their corporate parents (estimated to hit $470 mn (EBIT 2009) a year in the red at You Tube and $22 mn in the red at the much smaller Hulu.  Hulu gets about 300 mn streams a year while YT is at over 5 bn.).

As the new SAG team did little to build additional leverage to use against the Producers, and instead opted for back channel negotiations, it had to give up another deal term to get the Producers to back off on the delayed contract expiration date.

It appears the concession made came on so-called force majeur payments. These are triggered when a significant event outside the control of a film producer interrupts film production. The SAG agreement calls for actors to be paid a percentage of their base salary during the interruption. The 100 day WGA strike qualifies as such an event, according to SAG, and it is thought that producers owe actors as much as $10 million in such payments. But the producers are balking and so SAG put the issue on the table during contract negotiations.

Now it is off the table again, apparently, and will require individual negotiation and possible dispute resolution mechanisms that could take many months to resolve. Instead of having the collective power of the Guild in their corner to resolve the dispute individual actors will have to mount battles to recover these payments.

Now that the deal is endorsed by the board, however, it will likely sail through to a ratification vote by a membership that has long grown tired of a leadership, from both groups on the National Board, that has run out of ideas to build union power in Hollywood. Once the deal is done, however, the membership will get a chance to speak again in the September 09 national elections when the slim majority held by non-Membership First activists could receive further support. It is unlikely, though, that that event will resolve the problems associated with what remains a deeply divided and demoralized union membership.