Is SAG Hobbled at the Starting Gate?

images-2As the new leadership takes over at SAG they will have to face up to the tight constraints that the last round of bargaining placed them in.

In light of the dramatic decline in the strength and reputation of SAG over the last 20 years this is likely to be a critical period for the Guild. Barring significant change in direction, one of our labor movement’s most important members may find itself an after thought.

First, while the new moderate leadership group campaign was centered on merger with AFTRA, there is little chance such a move could take place prior to the start of contract talks on the major collective bargaining agreement, thus any potential advantage from such a merger will not be felt in this round.

Merger outright seems a long shot in any case in light of the recent election outcome. More than half the votes cast were for either Anne-Marie Johnson of Membership First or Seymour Cassel, an independent. Both Johnson and Cassel are strong opponents of merger. Merger requires 60% approval from SAG members.

The continuing importance of Membership First was reinforced by the news this week that they have elected Johnson to represent the Hollywood Division as First Vice President of SAG. The MF presence in Hollywood was also strong enough to replace Ken Howard – now SAG President – on the Hollywood DIvision board with another MF representative.

The frustration, and perhaps political immaturity, of the new moderates was indicated by a comment reported by the SAG Watch blog which represents the moderate wing of SAG: “one UFS supporter…call[ed] the process an ‘Up Yours!’ to Hollywood SAG members/voters.” Apparently the use of the MF group of their majority position in LA – whose presidential candidates after all received a majority of the votes in the recent election – came as a surprise to the new moderate activists.

Adding to the instability and uncertainty, Membership First will have a chance to shift the direction of the union when, in SAG’s absurd governance structure, 1/3 of the National Board seats are up again for re-election in a year – just as negotiations are scheduled to get underway with the AMPTP.

Second, because of the inability of the ousted Membership First group to seal a deal near the June 2008 expiration date the moderate alliance which took over the SAG board in late 2008 found itself under pressure from the Producers to push back the next contract expiration date to 2012.

As I blogged at the time, SAG negotiators David White and John McGuire apparently did not realize how serious the AMPTP was about that demand and the Guild was forced to give up on resolving millions of dollars of force majeur payments owed to individual SAG members as a result of the earlier WGA strike in order to secure a 2011 expiration date.

SAG argued that the 2011 date would allow them to coordinate bargaining with the other Guilds whose contracts also expire in the spring of that year.

But will that really be possible?

A little noticed compromise was also agreed to by SAG under pressure from the Producers: while the current contract expires at the same time as that of AFTRA and the DGA (June 30, 2011) and just after the WGA (May 1, 2011), SAG agreed to six weeks of “good faith” negotiations to begin in October 10, 2010.

The clause is unprecedented in SAG history according to Variety and thus no one can quite predict how it will work out.

It certainly means that the next year will be one of intense pressure on SAG’s untested leadership team. SAG usually takes several months to develop its bargaining positions through an internal deliberation process. This must begin relatively soon and will likely be a contentious process.  Membership First made no serious effort to improve the DVD residual formula.  Will the moderates be able to take on that $20 billion revenue pool or will they, too, get sidetracked by the miniscule revenues generated in new media?

A battle is also likely to break out soon over the appointment of David White, currently Interim NED of SAG, as permanent NED. The moderate board majority clearly backs White while he will likely be opposed by the Johnson/Cassel forces. It is possible the board majority will attempt to simply annoint White to the position without a full borne search process. Already Secretary Treasurer Amy Aquino, of UFS, has stated she looks forward to working with White. Since his contract is up in a few months that seems to indicate her intent to try to keep White on board.

White has an employer side background having begun his career at the studios’ major outside law firm O’Melveny and Myers under future SAG NED Bob Pisano, then joining Pisano at SAG as general counsel. He quit as SAG’s general counsel as the internal political battles became too heated and then formed his own advisory firm, Entertainment Strategies Group (ESG) to advise producers and others, including reportedly the AMPTP itself, on guild labor issues.

White accepted an investment in ESG from Marc Dreier, the disgraced lawyer 60 Minutes called a “mini-Bernie Madoff.” Dreier used money fraudulently raised to invest in three firms in LA including White’s ESG. Dreier is now serving 20 years in federal prison for his crimes. ESG’s assets were frozen at the end of last year as creditors of Dreier’s tried to recoup their losses and it was forced to shut down. White was re-hired by SAG on a one year deal at that time.

White was not implicated personally in the Dreier scandal and ironically SAG President Alan Rosenberg, of Membership First, hired another Dreier associated lawyer, Eric George, to sue SAG over the moderates firing of Doug Allen as SAG NED.

Some in SAG, nonetheless, questioned White’s judgment about getting involved at all with Dreier who was under some suspicion in 2008, asked whether White had fully disclosed his relationship with Dreier to SAG prior to his appointment, and wondered whether or not White took the high paying NED position at SAG just when he was under personal financial pressure due to the shutdown of ESG.

White’s supporters will argue likely that his background on both sides of the table give him the experience SAG needs at the bargaining table and that his direct knowledge of the industry can help SAG find ways to make incremental  but useful gains in important issue areas.

White stated publicly that he discussed the Dreier matter with SAG board members individually but he did not address the issue at a full meeting of the board during the appointment process.

To some the White hiring process is reminiscent of the failure to vet fully Doug Allen, the NED hired by Membership First, who it turns out had crossed a Buffalo Bills picket line while playing professional football and then later as a union official was in charge of a licensing arm of the NFL Players Association that defrauded retired players of millions of dollars. It was never clear whether or not SAG leadership was fully aware of these issues when it hired Allen.

But most important, assuming SAG deals with the NED issue quickly then the really big issue will be how to increase their leverage to improve on terms and conditions in the upcoming October talks.

So far no clear strategy other than a closer relationship with the other guilds has been articulated by the UFS/USAN/RBD majority. With merger likely on the back burner in the near term, that leaves a vacuum to be filled. Given White’s lack of wider trade union and political experience together with the untested nature of the new elected leadership the development of such a strategy may be problematic.

Fortunately, the WGA has, it seems, kept on board their NED David Young even though the WGA elected a new moderate president as well. Hopefully, White is in close contact with Young and SAG can absorb some of Young’s deep trade union experience.

But one other factor has not yet been considered: because of the moderates’ decision to cut a deal quickly with the AMPTP without any real battle they are stuck with the early October 2010 talks. Ironically, just as the Membership First team took a “go it alone” approach to bargaining in 2008, SAG’s moderates are also forced to go it alone against the AMPTP. The other guilds did not have to make this kind of commitment in their contracts so they can wait to begin talks until several months later.

And it needs to be kept in mind that “good faith” in labor law requires both sides to move on their positions – they cannot simply stall. Since the contract is not up until the following summer SAG may be forced into early concessions without being able to rely on the support of other guilds in any job actions.

Keep your seat belts fastened this will be, once again, a fascinating and challenging year for Hollywood labor.

1 thought on “Is SAG Hobbled at the Starting Gate?”

  1. To answer some concerns:

    1) Force Majeure is a phony political issue. Neither I nor anyone I know has ever had to deal with Force Majeure in nearly 50 years as a professional actor. To whom does it really mean something? Stars, who often have other projects and a project schedule. Their own teams of agents, managers, and lawyers deal with the Force Majeure-type clauses of their deals.

    2) The SAG Board had no inkling of Doug Allen’s picket-line crossing past or his involvement with the NFLPA/Players Inc lawsuit prior to his being hired.

    3) It is my opinion that the “early” talks concerning the 2011 contract can work to SAG’s advantage by giving the Guild an opportunity to more fully determine the templates of “pattern” bargaining than to have to follow the other guilds as usual.

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