The 2% Solution? SAG/AFTRA Near Deal With AMPTP, Wrap Says

Newcomer The Wrap says they have an exclusive: that SAG/AFTRA and the big studios might reach an agreement on a contract proposal this week. Hard to understand why this is an exclusive when Variety had the same story the yesterday.

But both outlets are hinting the agreement, if it comes, is not likely to move the ball down the field for actors. Moderate leadership, continuing uncertain economic times and a tough employer group all militate in favor of a modest wage increase, no change in revenue sharing models and, at best, status quo for health and pension funds. On the last point it could be considered by some, arguably correctly, a victory if actors aren’t forced to up their own contributions in light of what is happening elsewhere in labor relations.

The larger industrial relations picture, however, is worth considering despite not quite yet knowing what to expect.

As backdrop, I just finished teaching one of business law’s most important cases this week, the multi year multi million dollar Disney shareholders’ litigation.

Shareholders sued Disney’s board of directors arguing they violated their fiduciary duty to shareholders when they hired and then fired uber agent Michael Ovitz. For 14 months work Ovitz walked away with $140 million in severance.

After seven years in court, including two Delaware supreme court opinions that ran into the hundreds of pages and $40 million in litigation costs, the holding was that while the board did not engage in best practices but they did not violate their obligations to shareholders either. Barely a slap on the wrist.

Some analysts felt that there was a good reason for the board to agree to a lucrative pay package for Ovitz. He had been an architect of pay deals for actors that had shifted the balance of power away from the studios. For a major studio to hire him was a coup because it suggested he might be able to help undo the damage done, by him, over the previous decade or more. In fact, Disney stock skyrocketed when it was announced he had been hired.

It may have taken 15 years but the shift in power back to the studios may finally have been accomplished. For example, is it just coincidence that ugly star behavior receives such heavy duty media attention these days? A day hardly goes by without some lurid reference to Lindsey or Charlie or Mel.  It helps the studios build a little humility into the negotiation process, surely.

The failure of the Guilds to keep control of their relationship with the agencies, which these days act more like hedge funds, the last gasp mindless militancy of the Doug Allen/Alan Rosenberg period, the reactionary election of an nearly invisible SAG President together with hiring a go along to get along former lawyer for the studios as NED who made significant concessions in bargaining – these all have potentially signaled a deeper structural shift in power in the industry.

A smart industry leadership would not necessarily upset this ongoing shift by making overly aggressive demands in bargaining, instead they would take a longer term perspective – push hard to rein in costs, make the case for economic reality as they see it.

SAG/AFTRA, in turn, has no clear long term strategy. Efforts by the AFL-CIO to organize an Industry Coordinating Committee among the relevant unions has gone nowhere as far as the outside world can tell.

So while we wait for the white smoke to go up in Hollywood this week, the overall image is becoming clear and it is not a pretty picture for actors and their unions.

Exclusive: SAG/AFTRA Near Deal With AMPTP — at Just 2% Wage Increases |

1 thought on “The 2% Solution? SAG/AFTRA Near Deal With AMPTP, Wrap Says”

  1. I don’t know where you get your information, Steve, but Ken Howard is hardly a “nearly invisible SAG President.” He shows up at all meetings he is responsible to attend and he has run all National Board meetings with a fair and affable, yet firm, hand. He has been engaged with TV/Theatrical contract talks for several weeks now. Perhaps the news blackout has rendered him “nearly invisible” to you and Membership First, but not invisible to those he is dealing with on behalf of the membership….

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