Do union mergers work? Cutting costs is the “easy” part

The entertainment and media industry (EMI) is going through dramatic restructuring. There is huge pressure on the talent that provides the content for EMI to keep up. Over the last decade talent agencies have been among the most aggressive in responding to the changing landscape for talent. This is true in movies, TV and sports.

Now unions representing actors, broadcasters, writers and athletes are trying to respond as well. One tactic that some unions have adopted is to follow what corporations do when they are under economic pressure: merge with fellow unions in an attempt to be both more efficient and more nimble.

The merger last year of longtime “frenemies” SAG and AFTRA is thus an interesting experiment in EMI labor relations. The new entity, SAG-AFTRA, has just announced its second round of layoffs of union personnel. This is one way of course to gain some efficiency because it reduces costs and eliminates duplication of efforts. Now, for example, the union has only one National Executive Director, not two. Since that is a well paid position it creates a significant cost savings for the union.

But the real challenge for union mergers is whether the merger helps generate new revenue for union members. The cost side is painful but not terribly difficult to figure out. The revenue side is very much a challenge.

And there is no time to waste for the unions active in the EMI sector, whether in film or professional sports, because the employers are engaging radically new technologies such as social media and mobile communications to generate new streams of revenue for their investors. Unions in the sector need to come up with innovative ways to respond if they are going to stay relevant.

SAG-AFTRA to Lay Off Up to 80 in Restructuring.