SAG officials may seek higher DVD residuals but unfortunately, half of the “Phase-one” structured negotiating team is AFTRA! And DVD ain’t a real big bleep on their radar!
So, even if the majority of SAG negotiators are willing to stand up for an increase in DVD revenue, the committee’s faction of SAG “go-along-to-get-alongs” with the support of an indifferent AFTRA bloc, under the leadership of Netflix Bob, will most likely gobble up whatever scraps Nick and his AMPTP pals put on the floor.
In light of the fact that under “Phase One” AFTRA accounts for only about five percent of the stakes but has a FIFTY PERCENT say in the outcome, ah, perhaps “Phase Two” should be to Phase Out “Phase One!”
A.L. Miller Editor & Chief
Interview with JPC’s Chief Negotiator in upcoming Commercial Contract negotiations. This guy wants to Put the Wood to us.
If you think Doug Wood the Chief Negotiator for the JPC in the upcoming Commercial Contract Negotiations is not intent on completely dismantling our current commercial residual structure as it now standsalong with gaining unfettered use of our talents, better think again.
The following interview with Mr. Wood was conducted by Robert Liodice President and Chief Executive Officer of the ANA Association of National Advertisers
Although the interview is self-serving, it should give us some insight into what is enstore for our negotiators in our upcoming 2006 Commercial Contract Negotiations! It should be required reading for not only SAG board members and our negotiators, but every SAG member.
Yes, the Ol’ dog has added a few pertinent comments.
December 12, 2005
Q&A with Doug Wood re: SAG / AFTRA
Since the 1950’s, the advertising industry has hired and paid actors under a collective bargaining agreements with the Screen Actors Guild (SAG), the American Federation of Radio and Television Artists (AFTRA), and the American Federation of Musicians (AFofM). Each of the contracts has a term of three years, with the current agreements with SAG and AFTRA expiring in October 2006. Negotiations on new three-year contracts will begin next spring. Leading that negotiation for the advertising industry will be the ANA’s General Counsel, Douglas Wood of the law firm of Reed Smith LLP. Doug and I recently sat down and discussed the challenges lying ahead and industry plans to take a leadership role in finding common ground with the unions.
Doug, can you briefly describe the industry process in negotiating with the unions?
Since the union contracts were first negotiated, the ANA and AAAA have worked together through the Joint Policy Committee, an ad hoc committee comprised of fifteen representatives appointed by the ANA and fifteen appointed by the AAAA. The JPC is led by the lead negotiator, appointed by the ANA. I currently hold that position, having been appointed in 2004. The JPC meets periodically throughout the year to discuss issues that arise in relations with the unions and, as negotiations for a new contract approach, appoints a negotiating committee to meet with the unions and hammer out a deal. The JPC is now meeting about once a month.
You recently wrote a lengthy article for The Advertiser. I recommend it to everyone. Could you briefly go over the major issues the industry and the unions have to tackle next year?
We’ve reached a critical crossroads. The current contracts are based upon a model first established in the 1950’s when there were three networks and scattered independent affiliates. Today’s media landscape is far more complicated, with new media outlets seeming to develop every week. The old contract model can’t keep up and everyone, the industry and the unions, need to step back and take a new look at how talent is hired and paid for performances in commercials.
Why doesn’t the old model work?
The old model is based upon separate payments for each media outlet. Today, there are separate payment schedules for network, wild spot, cable, syndication, dealer, seasonal, Internet, Hispanic only, and so on. It’s become terribly complicated and illogical since media diffusion has does not necessarily create more viewers. It makes little sense to add yet more “silos” for mobile, PDA’s, streaming, satellite, on line networks, branded entertainment, iPods, showmericals, promericials, multicasting, video on demand, digital editing, and so on. Going down that road is most likely going to increase costs without establishing a balance between fair compensation for actors and the advertiser’s return on its overall investment.
And we all know how the advertisers care about fair compensation for SAG members! Right?
So what would the industry like to do?
We have informally proposed to the Executive Staffs of both SAG and AFTRA that we stop the clock on the current contracts for a year and jointly commission a study from a non-partisan expert to review the situation and propose options for both sides to consider. The unions agreed in the last contract to explore new methods of compensation for actors. We now need to work together on this to produce recommendations that take everyone’s concerns into consideration.
Hello? No more One-Year Extensions! This ain’t your Pisano’s SAG!
That sounds like a major undertaking. Who is going to pay for that?
There is a fund jointly administered by the unions and the industry that can be used for such purposes. We’re using such funds now in a joint study on monitoring the accurate reporting of commercial broadcasts. But if monies are not available from that fund, the industry will have to finance the study. It’s our hope that the unions will see the value of this study and agree to co-fund it.
Why do you believe such a study would provide viable options?
We can’t be sure it will, but if the industry and the unions don’t try to find a new model, we have great fear our discussions will break down, leading to a possible impasse. No one wants to have a replay of 2000 when we all suffered from a strike.
I think that is something we must remember. Something the previous SAG administration forgot! It works both ways, NO ONE WANTS A STRIKE!
So we need to work together and enlist assistance of people who can take a truly unbiased look at the situation. In the past, the ANA, AAAA, and AAF worked together and retained a Nobel Laureate to study the impact of taxes on advertising. The study has enabled Dan Jaffe and his counterparts at the AAAA and AAF to successfully head off ad taxes that would increase consumer costs and cost jobs. So we’ve been successful in other situations where we’ve had to defend a position. Working with the unions, we hope they’ll agree to jointly funding a study that will have similar success. It can be done.
Ain’t if funny how they always come up with last minute plans to get an extra year at screwing us. And now, they not only want that year, but they want us to help pay for the screwing.
What if the unions say they don’t want to work with us?
They agreed to consider this, so they can’t really just say no.
Let me see if I understand this. If we agree to consider something that somehow commits us. Hello?
But if we can’t get them to cooperate, then we’ll have to do it ourselves and bring a proposal to the bargaining table. The unions will then have to negotiate with us in good faith. It is our sincere hope, however, that the unions will be enlightened and join with us. It’s the smart thing to do.
If there is one thing we’ve learned from cable to video, it’s this. If they tell us it’s the smart thing to do, it is the dumb thing to do!
We’ve all read the papers and heard the news of tension in the unions after the election of Alan Rosenberg as SAG President, together with his slate of Directors under the Members First banner. How does this impact the JPC’s initiatives?
The current debate within the unions is healthy. SAG and AFTRA members are openly debating what’s right and fair. Transparency in such matters is always preferred over closed-door meetings. While Mr. Rosenberg has expressed some aggressive positions with regard to SAG’s agreements with gaming companies, the television networks, and motion picture studios, he hasn’t really said anything about the commercials contracts. Our contracts will be the first ones his new administration tackles. We all hope he’ll be open-minded and embrace a new approach. He’s been quoted as wanting to do what’s right. We want to do the same. And what’s right is to work together.
Actually, here’s what the JPC is hoping. They are hoping that SAG has been so weakened by the “go-along-to-get-along” leadership of Melissa Gilbert and her Restore Respect/USAN pals that President Rosenberg will not be able to put our unions best bargaining chip on the table–the threat of a strike!
And where does AFTRA stand in all of this?
AFTRA is a separate union. It has exclusive jurisdiction of radio commercials. We’ll negotiate separately with AFTRA in that regard. AFTRA shares jurisdiction of television commercials with SAG.
Ah, Hello! Perhaps Mr. Wood should spend less time doing interviews and more time reading the contracts. Under the Phase One Agreement radio commercials are negotiated jointly by AFTRA/SAG under the contract. In fact that’s part of the problem of the Phase One Agreement, AFTRA’s end o f the deal amounts to only about 5% of the contract, and they settle pretty much for what ever is offered them, and then they have a 50% say in the TV commercial segment of the contract–and once again they are willing to take pretty much whatever is offered compromising our SAG negotiators that might push for a more equitable agreement.
It appears that any prospect of a merger between SAG and AFTRA, something attempted in years past, is out of the question now. We’re sure AFTRA will take an active role in the negotiations of the television commercial issues. In the past, the two unions have stood together on issues. While there is certainly tension between the two unions, we have not yet seen any breakdown in their solidarity with it comes to negotiations on the commercials contracts.
But there could be a split?
Yes, there could be a split.
In the end, won’t critics say the industry is just looking for a way to save money by reducing talent payments?
That will be the spin some pundits will put on it.
Speaking of pundits, earlier in this interview wasn’t Mr. Woods lamenting Increased Costs?
But that is not necessarily the result. In fact, we fully suspect a new model will increase some costs and lower others. This isn’t about saving money.
“Isn’t About Saving Money?”
Our mission is all about spending money wisely and fairly. It’s far too early to say how that will impact on overall costs. At the center of the debate is how to fairly deal with actor’s compensation in a landscape that is fragmenting into a myriad of media choices never envisioned in the 1950’s when the format for the current contract was created. We must find a way to fairly compensate performers while at the same time showing a fair return to advertisers on their investment in talent.
Will this encourage advertisers to produce commercials in the United States?
That will depend upon the economics. It is clearly the preference of advertisers to produce in the United States with SAG and AFTRA talent. It’s just easier and more efficient. SAG and AFTRA actors clearly represent the largest and most qualified pool of talent. The issue of off shore production, however, is clearly fair game if we open up the debate to an independent expert. Nothing is off limits. We have to let the expert make proposals free of any constraints. Off-shore productions are a big issue for the unions. It’s something the expert needs to consider.
So that we can better understand the consequences of failing to come to an agreement, please take us down the road of what will happen if we are stuck with the old system, assuming we don’t reach an impasse and a strike.
Under labor laws, both sides must negotiate proposals each presents. If the unions insist on negotiating under the old model, we will, of course, do so in good faith. But even assuming we can agree on compensations for the new silos as well as existing media, it is clear such a direction will result in substantial cost increases and contribute to an already overburdened administration of the contracts by advertising agencies and talent payroll agencies. That will mean off shore production will increase and advertisers will reduce the number of actors employed in commercials produced in the United States. Put bluntly, if we are forced into the old model, it’s a fool’s game.
Conversely, Doug should you force SAG into a corner it would be a fools game! And up to now, I hate to say it but you are sounding very foolish.
It’s all about accountability, isn’t it?
Absolutely. The advertising community is moving aggressively towards “accountability”.
Translation: They want to put more money into their accounts!
The industry is clearly prepared to pay fairly for an actor’s performance, but it is increasingly difficult to do so under a patchwork contract approach that assumes every use in new media, regardless of its effectiveness, should garner residuals or that virtually every edit creates a new commercial.
Hell! Even the “go-along-to-get-alongs” should be put on guard by the above comment! They should stop their Hessinger and election crap and get behind President Rosenberg pronto! Like I said, Ol’ Doug wants to put the Wood to us!
Should we be prepared for a strike?
No one wants an impasse, but the complicated nature of the issues makes compromise under the old model difficult. While it is certain that no one wants a repeat of the strike of 2000, a strike cannot be ruled out. Astute production managers will take that into consideration in the coming year as they map out their production schedules. Advertisers who hire celebrities must also be wary of production schedules or personal appearances in the final quarter of 2006 or first quarter 2007.
How is the JPC trying to be thought leaders in this initiative?
First and foremost, we’re opening the tent to allow everyone with a stake in the issues a voice. Among other things, we’re planning meetings with the unions, talent payroll agencies, casting directors, and production companies. We’re working with the ANA and AAAA to organize workshops in a town meeting format in Los Angeles, Chicago, and New York early next year. We hope to work with the unions and commission and independent, blue ribbon study on alternatives in balancing fair compensation for actors and return on investment for advertisers. And we’re also going to launch a blog on which we’ll keep everyone informed.
Any final thoughts?
The challenges ahead are daunting, but we’re prepared and with cooperation from the unions and the help of ANA and AAAA members, talent payroll services, and the production community, we’re cautiously optimistic that we’ll have smooth sailing in 2006.
Smooth Sailing? If Mr. Wood thinks he’s gonna take away Class A, edit spots anyway he wants while dumping them in new venues without compensation, he is playing a Fools’ Game and will end up sinking his own boat.
A.L. Miller SW Editor & Chief
*All Formatting SW’s.
This article in the LA Times puts to rest many lies about the relationship of runaway production and the 2000 Commercial Strike. And although the news is good for actors, those who hire us forecast doom and gloom if we should stand up for a fair deal. And I’m sure they will be joined by, and amply quoted by the “go-along-to-get-alongs” in our union who are always ready to cut and run with proffered crumbs.
This story from the LA Times with a few clarifying comments from the Ol’ Dog!
From the Los Angeles Times
L.A. Rides a Wave of Ad Production Commercial filming in the Southland is poised to reach a new high thanks to the dollar’s decline and demand for movie-quality promos.
By Richard Verrier
Times Staff Writer
December 29, 2005
Seven men dressed as Russian naval officers huddle on the deck of a mock Soviet submarine, waiting to climb into a black rubber raft. As a giant fan churns up waves on an artificial lake and a bunch of actors posing as surfers wait in the wings, a camera mounted on a floating crane films the action.
Tourists who stumbled onto this scene recently during a tour of Universal Studios’ back lot would be forgiven for thinking it was a feature film, this being the same spot where such movies as “The Truman Show” and “Jaws: The Revenge” were shot.
Instead, it was a 60-second ad being shot for Internet service provider NetZero, part of a surge in commercial production that is jamming Southern California streets, soundstages and back lots.
The number of commercial production days permitted for this year is poised to exceed last year’s record of 6,703, according to permit coordinator Film L.A. Inc. The 2004 number was the highest since 1997 and represented a nearly 20% jump over 2003. Last year also saw Southern California’s share of all domestic advertising production reach 53%, up from 46% in 2003, according to a survey by Goodwin Simon Research.
“It’s been a little financial boon to us,” said Lance Sorenson, president of NES Studio Equipment in Van Nuys, who was hiring extra drivers and mechanics to keep pace.
This month alone, Los Angeles has hosted ad shoots for MasterCard, Allstate, Cadillac, KFC, Bud Light, Avis and McDonald’s.
The commercial upswing is largely due to the decline in the value of the U.S. dollar, which has made filming in Canada and other foreign locales more expensive. Another reason is that advertisers are increasingly demanding elaborate, movie-quality ads that require being close to Hollywood’s extensive production infrastructure.
So contrary to USAN/Restore Respect propaganda the 2000 Commercial Strike DID NOT “teach advertising agencies to shoot abroad,” in fact the evidence now appears to indicate “what they learned” is that if you want QUALITY you shot in Hollywood.
The NetZero ad, for example, cost about $2 million, about as much as some very low-budget films. The four-day shoot involved a crew of 75 people, including a marine coordinator and a computer graphics expert.
“This commercial has Hollywood written all over it,” said Rich Carter, an executive producer at Santa Monica-based Gartner, which produced the commercial.
Which it seems is better than having Canada written all over it.
Still, many local producers fear the good times may be short-lived for Los Angeles. Global competition, lackluster spending in the advertising market and growing labor unrest cloud the ad production industry, which is estimated to contribute more than $2 billion to the local economy.
Ah, and now the doom and gloom bargaining maneuver meant to intimidate.
“There are thousands of crew members and hundreds of vendors and suppliers who depend on commercial production for their livelihood who have benefited from the upswing in Los Angeles,” said Steven Caplan, executive vice president of the Assn. of Independent Commercial Producers. “But there are challenges on the horizon.”
Ad makers already face mounting competition from low-cost producers in countries that are hungry for the business. At the same time, advertisers want them to do more with less as many corporations tighten advertising budgets amid an uncertain economy.
Ah, and you know they are going to love that Ukrainian Look!
What has producers most worried are rising tensions between actors and advertisers that they fear could lead to another debilitating strike like the one the industry endured in 2000. Producers, who aren’t a party to the contract, were caught in the middle during that six-month walkout that sought increased wages.
“It was harrowing,” recalled Rick Fishbein, executive producer of Santa Monica-based Green Dot Films Inc. “We worked through the strike, but it was painful.”
Strikes are always painful, but then residuals and PH only came about after a strike. How painful would it be for SAG members without those two entities?
Even after the strike ended, local commercial production was slow to recover, partly because producers had geared up to shoot their assignments in other countries. The shift overseas, combined with the effects of the dot-com fallout and a recession, brought a 25% decline in local commercial production in 2000.
Hmmmm, we were on strike for HALF THE YEAR but production only decreased by ONE QUARTER!
The current contract between advertisers and two acting unions, the Screen Actors Guild and the American Federation of Television and Radio Artists, expires in October, although negotiations usually start months in advance so production schedules can be set.
Commercial makers are hoping a deal can be worked out. One scenario reportedly being discussed would provide a temporary solution by extending the contract for one year.
Fool us once, shame on you! Fool us twice, shame on us!
Producers say they can always move shoots to foreign locales, including such hot production centers as Buenos Aires and Prague, Czech Republic, if trouble occurs. Labor costs, parking fees and housing rentals in those areas are often cheaper anyway.
Ah, yes nothing like having that Czech Look written all over a commercial.
“I have contacts in 10 major cities around the world that I can turn on in a minute’s notice to get a job going,” Fishbein said.
Yeah, and I got several contacts in case I get evicted from my apartment, but it don’t exactly put me in a great bargaining position if my landlord wants to raise my rent.
For their part, a coalition of major ad agencies and such advertisers as Procter & Gamble Co. want to overhaul what they believe is an outdated system for determining the fees actors are paid.
Great now we are getting somewhere! Let’s update in a Class A way, the way we are paid for cable!
Actors say they are seeking assurances that they will be fairly compensated, especially as demand grows for ads viewed on cellphones and the Internet.
“Our intention is to bargain in good faith and reach an agreement that provides fair compensation for performers,” SAG spokesman Seth Oster said. “We trust the other side will come to the table in the same positive spirit.”
Likewise, AFTRA spokesman Christopher de Haan said the union hoped to reach a fair agreement.
Nonetheless, Doug Wood, lead negotiator for the Joint Policy Committee of the Assn. of National Advertisers, recently warned members that they should be ready for a possible strike.
“We’d be foolish not to have our members prepare for it because we’re dealing with a complicated situation,” he said later in an interview. “It’s time for both sides to sit down and be realistic.”
The only problem is that the only reality our employers can relate to is their reality, and until that changes the reality is that we are going to have to go eye-ball to eye-ball with them and fight for everything thing we get.
A.l. Miller SW Editor & Chief
Posted: Tue., Dec. 27, 2005, 10:00pm PT
Verrone, Guild promise new militancy
By DAVE MCNARY
In the past three months, the Writers Guild of America West has unnerved Hollywood with its newfound militancy — and prexy Patric Verrone promises no let-up in 2006.
The 9,000-member guild hasn’t staged a work stoppage since a bitter five-month strike in 1988. Now its aggressive, attention-getting stance — which echoes recent tactics used by blue-collar workers in the garment and hotel industries — has management so nervous that it’s making contingency plans for a possible strike in fall 2007, when the guild’s current contract expires.
But Verrone insists he’s not angry or obnoxious — he’s just being practical.
“We’re not doing this to stick people in the eye,” Verrone said. “I’m uncomfortable with the word ‘swagger’ because it makes us sound like egomaniacs. But we are a lot more confident.”
Verrone, 46, an Emmy-winning writer, stresses he’s motivated by sheer expediency — particularly given the loss of 1,000 guild jobs in recent years, mostly to reality TV. Verrone’s basic campaign message was that the Writers Guild is not going to have any clout at the bargaining table if it doesn’t reverse this slide.
He notes the response from members has been overwhelmingly positive. “Our slate got elected in September with nearly 70% backing, and many people in the other 30% have told us they’re behind our approach,” he said.
Verrone spent two decades working on such series as “The Larry Sanders Show,” “Futurama” and “The Simpsons,” and he’s exec producing a Cartoon Network series starring Andre Benjamin.
He dates his activism to 15 years ago, when he lost guild health benefits while working on nonsignatory series “The Critic.” A few years later, he helped organize “Futurama” to get it under guild jurisdiction (since many animated TV projects were not covered by the WGA).
In the past few months, the WGA has demonstrated its get-tough attitude in numerous ways. It has:
–helped writers on reality shows file a pair of class-action lawsuits against networks and producers for alleged wage and overtime violations
–fired WGA West exec director John McLean for not sufficiently stressing organizing non-union work and hired director of organizing David Young as McLean’s interim successor (Young pictured below right)
–demanded revisions in the WGA’s basic contract with producers to give writers a cut of the money generated by product placement and threatened to ask the FCC to seek a formal investigation into the legalities of product placement
–launched phony Web sites mocking product placement and disrupted panel discussions to complain about the conditions faced by reality TV writers
–helped organize a coordinated response by all the guilds questioning how Hollywood’s creative talent will get paid from iPod downloads
–settled a contentious dispute with the 4,000-member WGA East via a meeting with WGA East prexy Chris Albers, leading to several joint actions by the two branches.
The coming year will reflect further changes. Guild will beef up the organizing department from three to 14 staffers beginning Tuesday, following through on a campaign pledge to boost the organizing budget from 3% to 30% of the $20 million WGA West budget.
On Tuesday, veteran union organizer Jeff Hermanson will join the WGA West following stints with the AFL-CIO, the Unite Here service workers and the Intl. Ladies Garment Workers Union.
In addition, WGA West leaders are conducting a nationwide search for a new exec director, with Young in the mix.
“It’s not limited to the entertainment community,” Verrone noted. “We want someone who can deal with writers as artists and as workers. I think David is doing a very good job. I suspect David would stay in some capacity in the organizing department even if he doesn’t get the job.
“I think we’re back in the game in terms of our ability to get companies’ attention,” Verrone told Daily Variety. “Historically, the only way we’ve been able to do that in the past has been to go on strike, but now we’re facing vertically integrated companies and we have to take a different approach than we have in the past.”
Verrone remains unfazed over management’s talk of strike-contingency plans, pointing to responses from NBC exec Kevin Reilly and Fox exec Peter Liguori, who have indicated they’ll explore ways of addressing the scribes’ gripes about product placement. And he notes that he’s now in demand as a speaker at events such as an upcoming Producers Guild panel in New York.
“I’m finding that I’m being asked to appear on panels about product placement, probably in hopes that the WGA won’t disrupt the event,” he noted. “That’s one of my biggest achievements so far.”
Verrone also points out that the reality TV campaign, launched a year ago, has been gathering steam — even though no major producer has signed a WGA deal yet. He noted a recent WGA West event at the Avalon Hotel drew 600 attendees, helping the guild to cross the 1,000 mark for the number of reality writers who have signed cards asking to be represented.
The guild’s also looking for more plaintiffs for a third class-action suit.
It’s an abrupt shift from the tenure of McLean, a genial former CBS exec who remains a consultant along with longtime guild adviser Robert Hadl. “John and Bob offer a perspective that was used more than it is now,” Verrone said.
The Queens native insists the WGA’s not trying to hurt anyone.
“We don’t want to be giving executives the hot foot or throwing mud at them or keying their cars,” he said with a bemused tone. “But we need to react effectively to the changing business models.”
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Producers Poo-poo Product Placement
*Formatting is SW’s