SAG and the Studios: The Next Roadblocks

Last year proved that time is not on SAG’s side. Recall that the union’s then-leadership wanted better terms in new media than the other Hollywood unions got. Without leverage, all SAG achieved was stalemate, and it’s had no contract with the studios since last June. SAG hardliners fiddled while the calendar burned, and the extended delay, in turn, created a new issue: contract expiration date.

That issue, in essence, is this: SAG wants any new deal to expire in mid-2011 (3 years from when the old deal expired), while the studios are offering what amounts to mid-2012 at the earliest (3 years from whenever the new deal is ratified). It makes a difference, because a mid-2011 expiration would synchronize SAG with other Hollywood unions, giving the Guild and its allies more bargaining power then—perhaps enough to achieve improvements in new media.

The studios, of course, want nothing to do with a stronger SAG and so, although the Guild’s under new leadership, the stalemate continues. Up until this evening, there’d been little news lately about SAG and the studios—and understandably, since SAG’s been busy working with AFTRA on the just-concluded talks with the advertising industry. A few hours ago, stories appeared on the Variety and LA Times websites suggesting that back channel talks may have led to a mutually-acceptable compromise; however, that claim was essentially denied by a SAG spokeswoman. In any case, the apparent stasis is deceiving, because time marches even if the negotiations perhaps do not. So we have to ask: would delay itself bring more roadblocks?

Unfortunately, yes. Right now, AFTRA’s minimum are 3.5% higher than SAG’s. That’s because AFTRA did a deal last June, and received an increase at that time. SAG has continued to work under the expired agreement and old rates. Come June 30 of this year—a scant 12 weeks from now—AFTRA’s minimums will kick up another 3.0%, plus a 0.5% increase in pension and health contributions, while SAG will still be stuck in neutral if there’s no contract. At that point, it would take a 7.0% increase to bring SAG up to parity.

Are the studios likely to cough up such a large increase? Maybe. And maybe you’ll find dollar beers and fifty-cent pizzas at the local multiplex. In other words, not likely—or not easily, at any rate. The point is, the pay gap would become yet another tough issue to fight over, and yet another impediment to a deal. Indeed, even the current 3.5% gap may be an impediment, because SAG’s increases will always lag AFTRA’s by more than nine months, unless the studios are willing to give SAG another bump in just a few months, or unless the unions merge.

But there’s more. The start of summer also heralds the SAG election cycle. Candidates for SAG board and the SAG presidency will probably be announced in July, and the campaigning will continue through close of balloting in mid to late September. During that time, candidates will be nervously jockeying for position. The one thing they’re not likely to be doing is making tough compromises in order to close a deal with the studios.

So there it is. Either a deal is made in the next couple months, or it likely slips out of reach until October or beyond. But if that happens, the expiration date issue becomes all the more difficult. Then one wonders if the Guild might work without a contract for the next two years, then threaten a joint strike with the writers. That’d be one way to re-synchronize expiration dates, at a tremendous cost in lost wages however.

Of course, hovering behind it all is the question of whether motion picture production will, or can, resume in the absence of a contract. That’s a tough one, and the answer may differ depending on the financing: self-financed studio pictures don’t need production bonds, but independent movies do, and such bonds have been unavailable due to the possibility, however theoretical, that SAG could strike. (I’m unclear as to whether studio pictures financed under hedge-fund slate deals require bonds.) The studios no doubt need to resume production soon, in order to assure an uninterrupted flow of product for 2010. That may drive some sense of urgency on the management side; if so, it’s probably the only leverage SAG has.

The takeaway: for the sake of the industry, and the Screen Actors Guild, let’s hope Variety’s right and a deal is imminent. Otherwise, we’ll slip further and further into the uncharted waters of labor stalemate.

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