SAG Plays “The Price is Right”

As the details of SAG’s recent contract terms with the major Hollywood studios become public, the price SAG’s new majority paid to cut a deal are becoming clear. While some are congratulating the Guild’s new majority for closing a deal with both the advertising industry on commercials and the studios on TV and Film, it may have meant sacrificing as much as 50 to 60 million dollars in monies owed to some 500 SAG members.

SAG’s TV/Film contract contains a so-called “force majeure” provision which mandates that actors are paid a percentage of their wages when a film production is cut short due to external causes. Arguably, the WGA strike last year was one such cause. Hundreds of actors claim that as much as 60 million in penalty fees are owed to them (and there are some claims circulating that the total owed is far higher). In theory the Producers are able to force these disputes into arbitration. SAG had hoped to use its collective bargaining power to force a general settlement of the claims. 

In fact, that is what the Guild’s new leadership did but they only secured an agreement that each individual studio could, at its option, pay off the asserted actor claims at 33 cents on the dollar. In the alternative, the studio can opt for arbitration of the dispute where they might win a total reprieve or might be forced to pay 100 cents on the dollar.

Apparently, the Guild leadership felt that this compromise was required in order to win an agreement that the current contract will expire in two years time, instead of the ordinary three year period, so that its expiration is approximately coordinate with the expiration date of contracts negotiated by the WGA and AFTRA. 

While I originally considered this to be a useful gain, it is not guaranteed that it advances the Guild’s cause.

First, it needs to be pointed out that having to give up on real money claims in order to secure some future and largely uncertain political advantage is risky for a union.  There are many uncertainties about the terrain in the intervening two years.

Second, it is also not a good sign that the new majority put in place a new senior staff to replace the controversial Doug Allen and that new staff misjudged the seriousness of the Producers when they told the Guild that the Producers would indeed push for a 3 year deal when negotiations resumed. SAG National Board members appeared rocked on their heels by this demand but the Producers had made their intentions clear and such a demand could have easily been predicted given the long delay after the expiration of the previous contract last summer.

Third, what is to guarantee that in just two years SAG will somehow rebuild its shattered relationship with the rest of Hollywood labor and finally figure out how to apply long standing trade union tactics and principles to rebuild entertainment industry labor power? Frankly, the chances seem slim given the internal divisions that continue to rack the organization. Presumably the new majority understands this and in fact does not expect SAG to find some new basis for internal unity and cross-union solidarity.  

Instead they likely believe that the close timing of contract expiration between SAG and AFTRA in the spring of 2011 will motivate the revival of Phase One – the long standing joint bargaining agreement between the two guilds that SAG under Membership First tore up – or perhaps more aggressively help push for actual merger between the two organizations.

This is likely to be viewed by Membership First in their typical paranoid style as an attempt to once again lash the larger and, arguably, potentially more powerful SAG to the AFTRA mast. Of course, even paranoids have enemies and, in this case, given the alacrity with which the new majority handed control of the bargaining process to their new senior staff (including a clear constitutional violation in the silencing of nationally elected Guild President Alan Rosenberg) instead of involving the membership itself, and the speed with which those staff engineered a costly compromise, the Membership First critics will not be without some justification for their alarm.

12 thoughts on “SAG Plays “The Price is Right””

  1. I certainly agree with Tom on this issue, at least with respect to the potential advantages of the coordinated expiration dates. My concern, however, is that the two sides inside SAG have to find common ground if they are going to be effective partners with the other Guilds. And SAG must play a leadership role in that potential alliance if the alliance is to have the impact that it should on the balance of power in the industry. I think resolving the differences internally and externally depends on a clear view of what is happening in the industry and why.

  2. The “two-year thing” is NOT a “joke.” It positions SAG to be able to resume joint negotiations with AFTRA under the Phase I Agreement, without stipulations. The coincidental matching up with the WGA could be an added advantage, highly dependent on the make-up of both the WGA and SAG/AFTRA leadership. The problems of cooperation between these unions in the past have been due strictly to the intentions and levels of competence of those calling the shots in those unions. There are ways to do it, and many ways not to.

  3. SAG/AFTRA just a few years ago had a contract that expired when the WGA’s ended and it provided zero leverage. SAG/AFTRA’s next deal intentionally put them on a different cycle. The idea that the guilds will join hands and band together against the AMPTP for more leverage is wishful thinking and a myth. It never happens for a good reason…these guilds want different things and don’t want to be part of another’s negotiations. This two-year thing is a joke. Nice in theory. Won’t happen. Wouldn’t the AMPTP give up something for an extra year of peace?

  4. Steve
    The buck stops with the National Board. There is little validity in comparing the U.S. and SAG Constitutions. Two different animals. There are no checks-and-balances between Executive, Legislative, and Judiciary. The National Board is in charge of the Guild. And if the Board designates a staff member – or anyone else – as spokesman, then that’s the way it is. That’s in the SAG Constitution.

    At any rate, Alan was NOT “muzzled.” That’s an Membership First propaganda phrase. There also was no “over-reach.” There was a creative and constitutionally valid response to egregiously thuggish behavior. It may have saved SAG. It is my hope that SAG will ultimately survive the spectacularly destructive reign of Membership First. Whatever it takes, as long as it’s consitutional.

  5. Tom,

    I believe the membership has ultimate authority and it has designed a constitutional system of governance for SAG. At the heart of that constitution is a form of shared power among several groups, including the Board, the NEC, the Divisions, the officers such as the President and S/T, etc.

    In shared systems of governance whenever one group within the system acts unilaterally without the support of other groups it may be acting formally within the stated framework but it does so at its own peril. Thus, to use an analogy, the ongoing debate about U.S. presidential powers in the exercise of foreign affairs revolves around the relative powers of the legislative and executive branches. The most powerful statement analyzing this problem – a Supreme Court opinion from a dispute over President Eisenhower’s attempt to suppress a steel strike – argues that Presidential power is at its zenith when it has the full backing of Congress.

    At SAG, the President is the Chief Executive Officer, the Chief Elected Officer, the Chairman of the Board, a member of the Board of Directors, an ex officio member of the Divisional boards, among other duties. As a court might put it, it is “beyond peradventure” that with such titles and responsibilities comes the power, indeed the obligation, to speak for the organization.

    If the members do not like what the President says or does, and I can certainly understand the concerns, there are methods built into the Constitution for dealing with them. The risk here is that the Board has attacked the office not the man. Impeachment is the obvious solution – it preserves the office from the perversion of it by the man.

    Oh, and by the way, did I say how damaging it was politically? If anything pushed MF back into a corner where they were willing to sue to fight back, etc., it was this over-reach. After the 30 hour marathon I think even some in MF were beginning to realize they had reached a dead end.

    Now if all you are saying at this point is that the Board decides that Guild policy is X and it is clear that they have the power to set that policy and then the President goes out and says the policy is Z, then, clearly, the President in that case is not speaking, and cannot be said to have the power to speak, for the Guild.

    But that hardly requires a board muzzling the President by resolution. And recall that the Board in this case handed the power to speak for the Guild to two non-elected new staff members! While it is possible to imagine situations where it might make sense for a staff member to speak for the Guild (or any union) on such critical issues, I think it ought to be done only rarely.

    It is arguably the case that many of the woes of the American labor movement are linked to the centralization of power by paid staff, whether or not they are former rank and file members.

    On force majeure, I don’t understand the argument that SAG aided and abetted the strike. They didn’t vote to stop work; the WGA did and only after the Producers baited them into it. Are you telling me that five weeks wasn’t enough time to resolve the issues between them?

  6. Steve-
    I feel I must insist that the SAG Constitution clearly delineates that the “boss” of SAG is the National Board of Directors, and if the President – or anyone else, for that matter – supports policies that run counter to those of the Board, the Board has a perfectly constitutional right to say that they cannot “speak for the Guild.” It’s bad enough that a President with no knowledge of and no respect for Roberts Rules of Order and with a clear agenda to filibuster is allowed to reign as Chair of the Board.

    I did not say that SAG has not used its collective power to enforce challenged Force Majeure matters. But never, never, never for payments for work missed due to a strike (much less a strike that SAG aided, abetted, and supported).

  7. Tom,

    Regarding the force majeure claim, of course, I bow to your direct knowledge of the issues. But if what you are saying is true, it is the first public statement about the issue in this manner. As you know the entire NB is on the record numerous times endorsing all of the demands made by Membership First, while, of course, vociferously disagreeing with their complete lack of any clear strategy.

    But if you are right, I am quite surprised that this demand lasted this long on the table. You are saying there was no basis to the claim at all (or at least to the Guild attempting an all for one solution to it) and yet it survived until the very end of bargaining, which is more than one can say about a very real concern: DVD residuals.

    Further, assume you are right and the Guild has never tried to use its collective power to enforce unresolved force majeure claims. So what? That does not mean it is inappropriate. The point this time around was that it was the AMPTP that caused the FM event by dragging out the WGA strike until they could use the DGA negotiations as leverage against the WGA. And in turn they hurt SAG members by disrupting Series TV shows.

    According to that contract (at least a version of it posted on SAG Actor Bulletin Board), the Producers may suspend employment for five weeks but then must pay the actors half salary with the possibility of an increase to full salary after a further time period. The only words used are “if the production of the series is prevented, suspended or postponed.” That is certainly broad enough language to encompass a strike, and traditionally FM is defined to include the impact of a labor dispute.

    By the way, it is standard in collective bargaining to try to use contract negotiations to wipe the slate clean of issues like outstanding grievances. It allows both sides a chance for a fresh start. Now, I do not doubt for an instant that the approach taken by Doug, David and Alan at the table did not signal to the employers that they were serious about attempting to resolve anything much less create a fresh clean slate that would allow the industry to work more effectively for all. But their ham handed approach to bargaining should be separated from the underlying validity of a set of demands that the entire Board backed.

    I should say that none of the above has anything to do with whether it makes sense or not to ratify this contract. That is not for me to say. I do think it will be ratified because I believe the membership is likely of the same mind as that of the WGA after their 100 day strike. They did not like the deal but they felt it was probably the best they could get under the circumstances (which included SAG’s inability to coordinate with them, instead lashing out at AFTRA).

  8. Tom,

    Regarding the Presidency, the Constitution empowers the President in numerous ways that make it clear that the power of that office is separate from that of the National Board.

    That is consistent with the fact that the President (and S/T) are the only nationally elected leaders of the Guild. To say that the President of an organization cannot speak in the name of the organization is to say that the organization does not have a President.

    It is a usurpation of the power of the President by the National Board. In addition, by state law, the President is the chief executive officer of the Guild unless the Board designates someone else to play that role, which I gather they have not.

    It is theoretically possible to have a mere rubber stamp figure as President of a mutual benefit corporation and allow the board to rule the organization directly. If SAG wants to do that I think they would have to amend the Constitution and remove the powers granted the President (such as the President’s role as chief executive, Chairman and presiding officer of the board, signature authority, etc.) and then try to find someone willing to play such a role as a mere figure head. It’s a legally valid alternative if done correctly but not one that the Guild has ever used.

    It was also, clearly, a heavy handed move by the Board and thus politically unwise. If Rosenberg were to sue solely over that issue I think he would win. Of course, the claims about the invalidity of the written assent have no basis in my opinion and are a waste of time and money.

    Steve Diamond

  9. Also, Steve, can you point out where in the SAG Constitution it says that the President may speak publicly and represent the union? I cannot find it. If there was such “clear” constitutional violation in the silencing of Alan Rosenberg, my last cataract surgery must have failed. Anyway, he was hardly “silenced” – he was even given free rein to put forward his opinions (even those contrary to SAG policy) in the Screen Actor Magazine.

    Tom

  10. Steve –
    I believe you fail to take into account the difference between Force Majeure “claims” and what the true history of these claims has been throughout the years. The numbers cited by Doug Allen and Alan Rosenberg were continually inflated way beyond reality based on any notion of past practice. The idea that members lost any “real money” because of this agreement is extremely far-fetched.

    What one must keep in mind is that the Force Majeure aspect of the contract was a concession to management when it first came into being. They wanted a stop-loss in the event of a Force Majeure and no one really ever contemplated that it could be used by SAG to extract money from them in the event of a strike that we aided, abetted, and openly supported. A true Force Majeure is something like an earthquake or a hurricane – an act of God – that shuts down production. That begs the question as to whether a strike – an act of mankind – actually meets that definition.

    SAG filed claims because of the writer’s strike and management’s response during these negotiations was to propose modifying the contract to limit a future similar exposure (we would want to do the same were we in their shoes, as would anyone following good business practice).

    This is the first time we have ever tried to enforce this issue over a strike. It was another straw dog set up by Doug and Alan.

  11. On February 21, 2009, the SAG National Board, now controlled by the new majority, put out a press release that said in part:

    “The AMPTPs last-minute, surprise demand for a new term of agreement extending to 2012 is regressive and damaging and clearly signals the employers’ unwillingness to agree to the deal they established with other entertainment unions.”

    I have been told that the new senior staff (I was not told names) had been told well in advance of the formal resumption of negotiations in February that the AMPTP intended to press for a two year deal.

    So either you are wrong and my source is wrong and SAG was in fact surprised; or, my source is right and you are right and the Board misled its own members when it said it was “surprised” in late February by the expiration date issue; or, as I suspect, the senior staff was told by the AMPTP about their planned request, they told some but not all board members, and in fact many board members were surprised, even shocked, about the request.

    The latter explanation is consistent with one possible interpretation: there was an unintended joint approach to bargaining by some in the national leadership and the AMPTP. By getting “tough” on one big issue, the AMPTP could let the new majority look good in being “shocked” and then could compromise on the issue by using force majeur.

    (Membership First used a similar tactic – it goes ape-s…. about new media – a $200 million revenue stream – but only because it has no idea what to do about DVDs – still a $20 Billion plus revenue stream.)

    My larger point is simple: the new majority and its new staff did not increase the union’s leverage prior to the restart of negotiations. This allowed the Producers to pull a nice head fake about an issue that apparently was not critical to them in favor of one that earned them real cash.

    I do not think this approach to collective bargaining bodes well for the future of SAG. While I am (obviously) sympathetic to those who contend that Membership First dug the Guild into a deep hole, it improves nothing to go to such great lengths (as the board obviously did) to put new leadership in place who then “prove themselves” by securing a deal by moving backward on an important issue.

  12. Steve,
    What new senior staff are you referring to? John McGuire, who has been with the Guild many, many years? David White, who also has a history with the Guild? Just curious, and not sure what your point is. I’ve also heard that the 3 year time-line desire from producers was expected, so it wasn’t really a surprise. I always enjoy and like your analysis, but I think there are some base assumptions here that aren’t necessarily correct.

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