SAG-AFTRA Commercials Contract - Clarifications

After conclusion of the 2013 Commercials Contracts negotiations and subsequent ratification, several issues came under review by the JPC and SAG-AFTRA that warranted further discussion and clarification.

(Those issues were previously outlined in 4A’s Bulletin # 7545JPC, dated 8/6/13.)

The JPC and SAG-AFTRA have reached final agreement on these outstanding items.  Download a copy of the joint JPC/SAG-AFTRA memorandum for further information.

Arbitrator Finds for SAG-AFTRA in Allocation Dispute: Signatory Ordered to Pay Additional Pension and Health Contributions to the SAG Plans

This post was written by Stacy K. Marcus and Frederick Lah.

On March 18, an arbitrator ordered a signatory to the SAG 2009 Commercials Contract -- Talent Direct ("TD") -- to pay additional pension and health contributions to the SAG-Producers Pension and Health Plans (the "SAG Plans") after allocating less than the amounts set forth in the Allocation Guidelines.  This arbitration ruling is the first of its kind since the institution of the Allocation Guidelines in 2009.

On March 15, 2007, model/performer Andy Lucchesi ("Lucchesi") entered into an agreement with the clothing company, Tommy Bahama, for the right to feature Lucchesi in print ads, TV commercials, and in-store promotional materials (the "2007 Agreement").  Tommy Bahama engaged Talent Direct ("TD") to serve as signatory and to make P&H contributions pursuant to a 10% allocation to covered services.  Following a dispute with the SAG Plans as to the appropriateness of the 10% allocation in the 2007 Agreement, in January 2009 TD and the SAG Plans entered into a settlement agreement providing for a 20% of the model/performer's total compensation was allocated to covered services (the "Settlement").  On April 16, 2009, Lucchesi and Tommy Bahama entered into a new contract (the "2009 Agreement") for the right to feature him in print ads, TV commercials, and in-store promotional materials.  Relying on the Settlement, the 2009 Agreement provided for a 20% allocation to covered services.  Months later, the 2009 Commercials Contract was made effective on April 1, 2009.  Under the Allocation Guidelines added to the 2009 Commercials Contract, Guideline B requires a 40% allocation to covered services for multiple service contracts if the performer's principle income is derived from modeling services.  Because the model/performer worked primarily as a model, SAG-AFTRA believed that the 40% allocation should be applied.  TD denied any contribution beyond the original 20% allocation insisting that the Settlement took precedence over the Allocation Guidelines. The arbitrator held that the Settlement was limited to resolution of the allocation dispute of the 2007 Agreement, and that it did not contain language that provided for a 20% allocation in future contracts.  Therefore, the arbitrator sided with SAG-AFTRA and held that the model/performer was entitled to the 40% allocation, along with liquidated damages for late payment. 

This case is the first decision to be handed down by an arbitrator regarding interpretation of the 2009 Allocation Guidelines.  This decision serves as an important reminder that settlements of prior allocation disputes may not necessarily be relied upon in determining future allocations, and that much depends upon the specific language of the settlement agreement.  It also seems as though the arbitrator did not engage in any analysis of whether a 20% allocation was fair and  reasonable based upon the services rendered/rights granted under the 2009 Agreement.  In fact, the arbitrator even acknowledged that no covered services were even rendered by Lucchesi under the 2009 Agreement.  Nonetheless, the arbitrator held that "[t]he most reliable indicator of mutual intent is the words used by the parties in their labor contract."  The arbitrator then applied the language of the 2009 Allocation Guidelines and held that "[t]he 40% allocation sought by [SAG-AFTRA] is required by Section 46.E of the [2009 Commercials Contract]."

SAG-AFTRA Commercials Contract - Residual Payments for THIS TV and Antenna TV

SAG-AFTRA and the Tribune Company have come to an agreement on residual payments to be made under the 2013 SAG-AFTRA Commercials Contract for commercials airing on Antenna TV and THIS TV.

The payment structure is the same as the terms applicable to payments for commercials aired on PAX/ION, BounceTV and MeTV.

Download the SAG-AFTRA agreement letter with the specific payment provisions.

SAG-AFTRA Commercials Contract - Update on Running Footage: Drivers

Special provisions for payment for drivers who are employed to provide services for “running footage” or “wild footage” for motor vehicle commercials have been in existence since 1992.

Download an updated joint JPC/SAG-AFTRA bulletin, providing a recap of those provisions, which have been updated to reflect the current on-camera principal rate and the current number of extra zones.

JPC Reminder: Ad-ID Compliance - SAG-AFTRA Commercials Contracts - NLT 3-31-14

The SAG-AFTRA Commercials Contracts mandate that all commercials produced under those Contracts for television, radio, Internet and New Media must use Ad-ID as the sole standard commercial identifier. The grace period to adopt Ad-ID ends on March 31, 2014.

Time to transition is running out. You must complete the transition fully before the deadline to avoid noncompliance. Some companies have asked the JPC what they should do to ensure that they are compliant.

Here’s guidance provided by Ad-ID: 

  • Registering for Ad-ID and creating codes is quick, but the setup time to begin using Ad-ID can vary based on individual circumstances. If you are not already using Ad-ID, it is strongly recommended you begin the transition process now to avoid noncompliance.
  • To start, ensure that all your assets are in compliance and registered with an Ad-ID code by visiting the Ad-ID website: http://www.ad-id.org. There, you can review a list of prefixes that already exist. Each prefix correlates to a specific marketer. If a prefix exists, make sure your assets are registered with codes created within the Ad-ID system.
  • If you do not have access to a prefix in the Ad-ID system, or if you have any questions about logins or permissions, connect with your marketing contacts and / or agency partners. Ad-ID customer service can also help answer any related questions.
  • If no prefix exists for your company or client, please view Ad-ID’s complete set up process document to get started. A video tutorial is also available.
  • Once you have registered for your prefix, each advertising asset needs to be registered with an Ad-ID code created within the Ad-ID system.
  • Next, it is strongly recommend that you reach out to your industry partners across the supply chain as soon as possible to confirm they are aware of the deadline.
     

The Ad-ID team is ready to help the advertising community make the transition to Ad-ID as simply and quickly as possible. You can find information about the Commercials Contracts Ad-ID requirement, a comprehensive Q&A regarding the requirement, general Ad-ID FAQ and more at: http://www.ad-id.org

AFofM Agreements to Expire on February 14, 2014

The collective bargaining agreement between the American Federation of Musicians (AFofM) and the advertising industry (as extended by the bargaining parties in 2012) will expire on February 14, 2014.

What needs to be done?

If your company is a Joint Policy Committee (JPC) authorizer, your company’s interests in this agreement will be represented by the JPC in negotiations with the AFofM; no further action is required.

If your company no longer wishes to be represented by the JPC in collective bargaining, you must withdraw your authorization from the JPC no later than December 14, 2013, by written notice to the JPC and a copy to the AFofM.  Additionally, if you also wish to terminate your signatory status and adherence to the contract upon the expiration date, you must provide AFofM with sixty (60) days advance written notice of your desire to terminate the contract.

For further details, please read the instructions outlined in the recent memo to all JPC Members and ANA Members.

AFofM Commercials Contract Term Extended through 2/14/14

The ANA-4A’s Joint Policy Committee (JPC) and the American Federation of Musicians (AFofM) have mutually agreed to an extension of the current Commercial Announcements Agreement through February 14, 2014.

All current rates, terms and provisions remain in effect through 2/14/14.

Read the fully executed Memorandum of Agreement.

SAG-AFTRA Corporate/Educational Non-Broadcast Contract Extension

Please be advised that the 2011-2014 SAG-AFTRA Corporate/Educational and Non-Broadcast Contracts, which were set to expire on April 30, 2014 have been extended one year through April 30, 2015. The terms of the current contracts will remain in effect through the extension period.

JPC Bulletin re SAG-AFTRA Interpretations of 2013 Commercials Contract Provisions

This bulletin outlines several areas where the JPC disagrees with the Union’s interpretation of the 2013 Commercials Contract provisions. The JPC and the Union are working to resolve their differences. In the interim, please notify the JPC by emailing Stacy Marcus at smarcus@reedsmith.com in the event that you receive a claim from the Union regarding any of the issues outlined in the bulletin.

Reminder: Joint Policy Committee Seminar - July 10

On Wednesday, July 10, 2013, the ANA-4A's JPC will be conducting an in-person seminar in Boston to review the new provisions of the SAG-AFTRA 2013-2016 Commercials Contracts. This will be the last in the current series of regional JPC seminars regarding the new provisions. Stacy Marcus, Legal Counsel to the JPC will be leading the discussion. This seminar is open to all industry members and is geared to those industry professionals involved in paying actors under the collective bargaining agreements.

Date: Wednesday, July 10, 2013
Time: 9:30AM – 12:30PM EDT

Location:
The Harvard Club of Boston – Downtown
One Federal Street, 38th Floor
Boston, MA 02110

(Please Note: The Harvard Club requires Business Casual attire. Jeans, shorts, baseball caps, t-shirts and athletic shoes are prohibited in the Club.)

Registration: Attendees must register for this event directly with Michelle Elliott at Talent Partners: melliott@talentpartners.com. Ms. Elliot is also the contact for any questions regarding event logistics and registration.

Joint Policy Committee Seminar Hosted by Talent Partners

On Wednesday, July 10, 2013, the ANA-4A's JPC will be conducting an in-person seminar in Boston to review the new provisions of the SAG-AFTRA 2013-2016 Commercials Contracts. This will be the last in the current series of regional JPC seminars regarding the new provisions. Stacy Marcus, Legal Counsel to the JPC will be leading the discussion. This seminar is open to all industry members and is geared to those industry professionals involved in paying actors under the collective bargaining agreements.

Date: Wednesday, July 10, 2013
Time: 9:30AM – 12:30PM EDT

Location:
The Harvard Club of Boston – Downtown
One Federal Street, 38th Floor
Boston, MA 02110

(Please Note: The Harvard Club requires Business Casual attire. Jeans, shorts, baseball caps, t-shirts and athletic shoes are prohibited in the Club.)

Registration: Attendees must register for this event directly with Michelle Elliott at Talent Partners: melliott@talentpartners.com. Ms. Elliot is also the contact for any questions regarding event logistics and registration.

Joint Policy Committee Seminar Hosted by Talent Partners

Please join the JPC in Chicago to review and explain the many changes to the SAG-AFTRA Commercial Agreements.

Stacy Marcus, Legal Counsel to the Joint Policy Committee, will be leading the discussion.

Date:

Monday, June 17th

9:30am - 10:00am: Continental Breakfast & Networking
10:00am - 12:00pm: Stacy Marcus, JPC Presentation
12:00pm - 12:30pm: Q&A

Location:

Hotel Palomar
505 North State Street
Chicago, Illinois 60654

Register Now!

Please RSVP directly to Michelle Elliott at Talent Partners.

2013-2016 Rate Charts for the SAG-AFTRA Commercials Contracts

New 2013-2016 Compensation Rate Sheets, Tables and other supplemental rate-based materials have been drafted, verified and agreed to by the industry and the union. As a reminder, the effective date for any retroactive payments due to performers for compensation under these contracts as well as implementation of new working conditions and other non-economic provisions is no later than June 30, 2013.

Ratification of 2013 SAG-AFTRA Commercials Contracts

SAG-AFTRA members voted by an overwhelming 96% to approve the 2013 Commercials Contracts. The attached summary and FAQs provide additional information regarding the contracts. Rate sheets will be available soon.

NEXT WEEK: The Joint Policy Committee Seminar, Hosted by Extreme Reach

Join Los Angeles area advertising industry leaders in a seminar to review and explain the many changes to the SAG-AFTRA Agreements.

Doug Wood, Lead Negotiator for the Joint Policy Committee, and Stacy Marcus, Legal Counsel to the Joint Policy Committee, will be leading the discussion. Here are some timeline details to help you plan your day.

9:15 am Doors Open, Networking & Continental Breakfast
10:00 - 12:00 Doug Wood & Stacy Marcus, JPC Presentation
12:00 - 12:15 Lunch Break
12:15 - 1:15 pm Q&A

WHEN
Thursday, May 23, 2013
9:15 am - 1:30 pm

WHERE
Regatta Room
Marina del Rey Hotel
13534 Bali Way
Marina del Rey, CA

If you would like to attend, please sign-up for this event by Noon on Monday, May 20. Click here to register.

Joint Policy Committee on Broadcast Talent Union Relations (JPC) and SAG-AFTRA

Statement Regarding Commercials Contracts Extension and Continuing Negotiations

Representatives of SAG-AFTRA and the Joint Policy Committee representing the advertising industry have agreed to extend for one week the current Screen Actors Guild Television Recorded Commercials agreement and AFTRA Radio Recorded Commercials agreement. Both contracts were previously set to expire March 31, 2013. Under the extension, the agreements will remain in effect through and including April 7, 2013.

The JPC and SAG-AFTRA began negotiations for successor agreements to the commercials contracts on February 14. Both parties look forward to continued productive negotiations under the mutually agreed upon and previously announced media blackout still in effect.

Follow SAG-AFTRA on Twitter (twitter.com/sagaftra) and Facebook (facebook.com/sagaftra).

JPC-SAG-AFTRA Commercial Contract Negotiations-Open Session 2/14/13

The JPC will commence negotiations with SAG-AFTRA in regard to successor commercials contracts on Thursday, February 14, 2013. The negotiations will be held at the Warwick Hotel- New York City. Further information regarding the Warwick Hotel can be found at: warwickhotelny.com.

Throughout the negotiations there may be joint industry-union sessions that will be open to public attendance, i.e., interested industry members and union membership. When advance notice is sufficient and communication methods are available, the JPC will endeavor to keep the industry informed regarding the dates and times of these open sessions. Please be aware, however, that due to the nature of the negotiation process, open session dates and times are subject to last minute change.

The first open session will be on 2/14/13 at 2:00 PM at the Warwick New York City Hotel -- Second Floor.

AFofM Contract Extension 2012-2013: Commercial Announcements Agreement

The ANA-4A’s Joint Policy Committee (JPC) has successfully reached agreement with the American Federation of Musicians (AFofM) for a formal extension to the 2009-2012 Commercial Announcements Agreement. Ratification by the union membership will take place shortly and ratification is expected.

The term of this extension agreement is from October 17, 2012 through December 31, 2013.

Effective January 1, 2013:  Contributions to the AFofM Pension Plan shall increase by one percent (1%) from 13.08% to 14.08% for new music tracks recorded on or after January 1, 2013.

Attached is a copy of the fully executed Memorandum of Understanding.

Industry and Union agree to Clearinghouse Initiative

As you are aware, for the last several years, the industry and SAG-AFTRA have been jointly engaged in a progressive study to investigate, develop and build a GRP-based residual system as an alternative to the current residual payment model under the SAG Television + AFTRA Television Commercials Contracts.

The industry and the unions agreed as part of the 2009 Commercials Contracts negotiations to conduct a year-long pilot test of such a system and which is called the "GRP-E Pilot." In addition the parties agreed to hold early bargaining on or about October 2011 to discuss the results of the GRP Pilot and bargain over the possible implementation of the GRP System. The parties subsequently agreed to defer that obligation as part of a one-year extension of the obligation to bargain successor agreements to the 2009 Commercials Contracts.

Among other things, we learned from the GRP-E Pilot that there are certain challenges regarding obtaining data necessary to complete the GRP-E calculations and rendering that data in a consistent and usable manner for that purpose. Commercial identifiers, network names and program names are not used consistently. These challenges resulted in the need to estimate a significant percentage of the use fees calculated as part of the GRP Pilot.

The adoption of a uniform system for labeling programs and broadcast outlets to work in conjunction with Ad-ID is a major step toward adoption of the GRP-E as a basis for determining compensation for actors performing in commercials. Using uniform digital identifiers for all silos in the ecosystem will be a major breakthrough, and will insure more accurate tracking and accounting than today's system of varied identifiers and manual calculations.

The ANA, 4A’s and SAG-AFTRA have agreed to jointly undertake a supplemental project to the GRP-E --the Clearinghouse Initiative - designed to address these challenges. The goals of the Clearinghouse Initiative include: implementing a common set of standards in commercial identification; the development of standardized nomenclature for both programs and broadcast and cable media outlets/networks related to airing information, promoting the adoption of these standards by a range of industry players across the advertising ecosystem and creating and maintaining a registry designed for the cost-effective management and tracking of these common standards.

The costs of the Clearinghouse Initiative will be paid for with funds secured from the SAG Producers-Screen Actors Guild Industry Advancement Cooperative Fund ("IACF") and the AFTRA Industry Advancement Cooperative Fund ("AICF"). The project will be conducted by PwC as part of the GRP-E project.

In light of the necessity for the Clearinghouse Initiative, the negotiations regarding the GRP proposal and GRP-E pilot results will be postponed until after the completion of the Clearinghouse Initiative.

For further information, ANA members may contact Stacy Marcus, Reed Smith; and 4A members should contact Kathleen Quinn,4A’s.

AFofM Contract Expires - What now?

On October 16, 2012, the American Federation of Musicians (“AFofM”) Commercials Contract expired.

The JPC awaits a response to our proposal from the AFofM. In the interim, please be advised that all terms and conditions of the expired contract continue to apply.

We will update you when we receive a response from the AFofM.

SAG/AFTRA Propose 1-year Extension of Commercials Contracts

The following link contains the full text of the JPC’s recent bulletin regarding SAG/AFTRA’s proposal for a 1-year extension to the Commercials Contracts. It is the intention of the JPCto agree to the extension. During this extension year, all rates, terms and conditions of the 2009 – 2012 Commercials Contracts would remain the same, i.e., there will be no increase in wages or Pension + Health/Health and Retirement contributions.

The JPC will formally notify the unions on September 1, 2011 of the JPC’s agreement to the extension. If you do not wish to accept the one year extension, you must withdraw your authorization from the JPC no later than Monday, August 29, 2011. Please refer to the following link for details regarding the withdrawal process

SAG/AFTRA: JPC BLTN#7273 Made for Internet and New Media Commercials: New Minimums April 1, 2011

To: broadcast business affairs contacts, legal counsel and other interested parties including talent payroll companies

Re: SAG TV Commercials Contract, AFTRA Television Recorded Commercials Contract,AFTRA Radio Commercials Contract

As you are aware, as of April 1, 2011, new minimum scale session and use fees take effect for Made for Internet and Made for New Media commercials produced under the various SAG and AFTRA commercials collective bargaining agreements.

The attached bulletin, jointly issued by the JPC, SAG and AFTRA provides further information. Please feel free to share the attached with other colleagues in your organization whose work may be impacted by this change.

Update on Take Down Notices-Unauthorized Internet Use

Attached is an update from JPC counsel regarding the sending of take down notices to signatories by the unions in response to claims of unauthorized use of commercials on the internet. Also attached is a copy of the letter from SAG and AFTRA to the JPC confirming same.

Recent Union Updates

The following documents have been added to our "Working with SAG, AFTRA, and AFofM - Union Updates" resource page:

For a list of all Union updates and resources, please click here.

Tags:

Union Update: Trust Agreements for SAG - Producers P&H Plans

The following documents constitute the Trust Agreements for the Screen Actors Guild - Producers Pension and Health Plans:

For a list of all Union updates and resources, please click here.

Tags:

Update: The GRP Talent Payment JPC/Unions Pilot

Earlier this year, the GRP Pilot, testing a new way actors who perform in television commercials are paid, got underway. More than 2,000 commercials are being tested to see if a GRP (ratings)-based compensation model will work. The results of the Pilot will be the centerpiece of negotiations with the unions that are scheduled to begin in October 2011. If adopted, this model will revolutionize the way advertisers pay actors. Some advertisers will pay less; others will pay more. But for the first time since the union agreements were adopted in the 1950s, there will be a measureable correlation between what an advertiser pays actors and their ROI on those costs.

Many advertisers are participating and more are being invited to do so. Surprisingly, some advertisers who have been asked to participate have declined, citing concerns over confidentiality of the data they share in the Pilot, or because they do not like the idea of paying on GRPs (fearful of paying more than the current model requires).

Without question, confidentiality of the data is critical, but the concerns on confidentiality in the Pilot are unfounded. PricewaterhouseCoopers is running the Pilot under strict confidentiality requirements. PwC routinely handles highly confidential information for advertiser clients, many of whom are competitors. They have never had a breach. The same standards are being applied in the Pilot.

Fear of how a new payment model will affect costs is understandable. That is the precise reason we are running the Pilot—to see where price changes will occur and to adjust the model to insure equitable distribution of costs. By not participating, an advertiser will not have the opportunity to raise real, measurable concerns, and the JPC will not have an opportunity to take those concerns into consideration. That leaves non-participating advertisers in the dark. If adopted, there will be no choice in how actors are paid—it will be the new model. So not participating is, quite frankly, short sighted. It's a gamble that the Pilot will have an advertiser in it that has the same media profile as the advertiser electing not to participate. In a Pilot that is dealing with annual industry spending of more than $1 billion, that's a gamble with very poor odds.

If you would like to participate, please contact Allan Linderman at allan@lindermanmedia.com or call him at +1 805 498 5163. If you have decided not to participate, I urge you to reconsider or to call me to discuss your concerns. I can be reached at dwood@reedsmith.com or +1 212 549 0377.

Douglas Wood is the Chief Negotiator for the advertising industry in its relations with SAG and AFTRA, is General Counsel to the ANA, and is a partner in the law firm of Reed Smith LLP.

Hollywood - Wake Up!

If you’ve entered into a celebrity endorsement agreement lately, you’re not alone in being amazed that, while we’re all feeling the brunt of a recession (even though prognosticators tell us it’s over), celebrities (or more often their agents), seem to be getting greedier than ever.

It’s bad enough that the typical annual fee for a few days’ work is now almost always in the seven figures, but isn’t it a bit much when they also want things like this:

  • Travel. First-class airfare not just for themselves (as required under SAG and AFTRA), but also for their entire entourage? What? They can’t travel alone like the rest of us working stiffs? For what they’re being paid, they could bring just about anyone they’d like. Just think of the frequent flyer miles they’d get! Worse, of late, the “stars” are demanding private jets – as in about $75,000 per trip! Really now, isn’t that a bit much? The usual reason they demand to fly private jets is personal security. I bet even the TSA would argue with an agent as to whether that’s justified. Or maybe it’s really because they don’t want to associate with those fans who contribute to their fame and fortune. Or, it’s the paparazzi. But if all of that is a problem, I’m sure the airlines can find a way to get them to the plane through some secret entrance that only they know about. Get real and join the rest of us (we’ll be the ones in the back of the plane).
  • Work Days. Increasingly, days of service are limited to no more than 10 hours, sometimes even eight. And less for photo shoots or personal appearances. Gee, don’t you feel bad for someone being paid seven figures who might have to work overtime? And, yes, I’m willing to concede that much of what an advertiser pays is for the fame associated with the celebrity, which certainly eats into the day rate. But come on. Don’t we all wish we could go home after 10 hours?
  • Behave! Judging by the behavior clauses agents are demanding, one can’t help but think that agents for celebrities simply don’t trust their clients. If you can call them behavior clauses at all. When the standard is “convicted” of a felony, you might as well ignore the clause. The contract will long be over by the time the jury decides what to do. And please, agents, stop telling us how wonderful your client is. I suspect they said that for just about every celebrity who fell from grace with prostitutes, alcohol, drugs, bigotry, or domestic violence. Shouldn’t agents ask their clients to behave just like the rest of us do? Imagine if any of us embarrassed our employers in public like some celebrities do. Guess what happens then?
  • Approval. Just how far can approval rights go before the celebrities might as well write the ads? Maybe I can understand approval rights over executions that directly reflect negatively on the celebrity themselves, but approval of overall copy is ridiculous. Perhaps it’s best for advertisers to send a portfolio of what they’ve done in the past and ask the celebrity not to waste their time unless they don’t mind how the advertiser historically sells its products. And best of all are the celebrities who won’t let anyone else appear in an advertisement with them. Imagine telling a movie producer they want to be the only actor in a movie. Stop already.
  • Prohibited Media. Increasingly, the list of media an advertiser can’t use is longer than the media permitted. I can remember when life-sized cutouts and some outdoor was all that was prohibited in most contracts. Now, it’s anything that wasn’t invented 10 years ago, including mobile, social media, and all the new media platforms where advertisers are migrating more and more media dollars. Does that make sense? Worse, an increasing number of celebs want to approve media schedules! Since when did a celebrity earn that right? I think it’s pretty safe to say that the advertiser knows best where to place ads so that, God forbid, they lead to sales.
  • Exposure. Hello? What do you think advertising is about? Hoping that someone might see the ad in some obscure magazine and then maybe buy the product? Let’s get real here. Celebrities are hired by advertisers for one reason – to increase sales. Surprise! And that means one thing – exposure, and as much of it as the advertiser can afford. But then again, I guess the exposure problem makes sense when you look at all the celebrities whose careers have been ruined because they appeared in advertising. Oh, wait. I can’t seem to find that list. But how about the one I did find – the one listing all the actors who would be unemployed memories but for the advertising they’re asked to do? Now that’s an interesting list agents and their clients ought to appreciate a lot more than they do.

The insanity goes on and on and the greed seems unending. Yep. Hollywood needs a wake-up call. Or do they? Maybe it’s not Hollywood that needs to wake up. After all, they’re getting away with it. Maybe, just maybe, it’s the advertising community – the advertisers, the advertising agencies and the celebrity brokers – that needs the wake-up call. Because as long as they keep saying “yes” to whatever a star wants, the less and less they’ll get and the more they’ll pay for it.

Callaway and the SAG Plans Settle

In February 2007 the Callaway Golf Company sued the Screen Actors Guild Health the Pension Plans, seeking a declaratory judgment that the P&H allocation for covered services made by Callaway on behalf the the golfers who appeared in Callaway commercials was sufficient and that the allocation demanded by the plans was excessive. The parties settled the case on January 31, 2010 after years of discovery and nearly a week into the bench trial. The settlement is attached. Unlike many past settlements of allocation disputes and suits to enforce the provisions in the Commercials Contract, the Callaway settlement is public and free for all to see.

GRP Model - PricewaterhouseCoopers (PwC)

This post was written by Kathleen C. Quinn, VP, Director Production Services, American Association of Advertising Agencies.

Per the 2009 SAG/AFTRA Commercials Contract, SAG, AFTRA, and the JPC have agreed to conduct an in-depth study of the Gross Ratings Point Talent Compensation Model ("GRP Model").

SAG, AFTRA, and the JPC have selected PricewaterhouseCoopers ("PwC") to conduct this study, which commenced on October 26, 2009. The study is composed of six stages and will last approximately 2 years.

Please see the attached memo from Doug Wood, JPC Lead Negotiator and Counsel, for additional details.

Guilds Split over Video Games: SAG and AFTRA Boards Recommend Acceptance of New Video Game Collective Bargaining Agreement; SAG Membership Rejects It

This continues to be an interesting year for entertainment labor negotiations. New SAG/AFTRA ad industry contracts, SAG’s new television and theatrical contract and studio agreement, an extension of the Non-Broadcast/Industrial and Educational agreement, not to mention infighting and lawsuits. And now there’s a new item – SAG and AFTRA’s separate negotiations with the videogame industry over voiceover work.

The unions, which had been negotiating with the industry separately, appeared to achieve some parity between their deals, and made a joint announcement earlier this month that agreements had been reached. The deals, if ratified, would expire March 30, 2011, and would provide for the following improvements over the current contract (set to expire in December):

  • A 3 percent wage hike for SAG (to match AFTRA’s current deal), and another 2.5 percent increase April 1 for both unions
  • A 0.5 percent increase in the pension and health contribution rate for SAG members, and an additional 0.2 percent next year for both unions
  • The establishment of a $100 liquidated damage for failure to give notice of “vocally stressful” work, and agreement to develop a set of guidelines for conducting vocally stressful work
  • A cap of $125,000 on contributions to the AFTRA Health and Retirement and SAG Pension and Health funds for performers paid more than $125,000 by a single producer in a single year for work done on the same game franchise

Both the SAG and AFTRA boards recommended acceptance of the contract, with AFTRA giving the contract “an overwhelming and strong” recommendation. However, SAG’s membership apparently feels differently – SAG members who work the contract voted it down, 73-42. One reason for the rejection was the inclusion of “atmospheric” provisions that would allow employers to use actors to perform up to 20 voices, of up to 300 words each, at the daily base rate, which some members saw as a reduction from current pay levels. 

SAG will now try to bring the video game companies back to the table to negotiate its deal, but the industry’s negotiators may require SAG to sweeten the deal before coming back. As for the AFTRA deal, a vote by AFTRA membership is currently underway.

Job Opening - Joint Policy Committee for Broadcast Talent Relations - JPC Project Manager

The Joint Policy Committee on Broadcast Talent Union Relations (JPC) is the multi-employer bargaining unit that represents the advertising industry in negotiations with the Screen Actors Guild and the American Federation of Television and Radio Artists in connection with the union agreements covering actors who perform in commercials for traditional and non-traditional media.. Established in 1962 by the Association of National Advertisers and the American Association of Advertising Agencies, the JPC is looking for one or two individuals who can join the JPC team to work with a consultant company hired jointly by the JPC and SAG and AFTRA. The consultant will be developing and running a pilot project testing a new way to pay actors in television commercials that is based upon a payment per GRP (in network, national cable, and syndication) (the "Project"). The JPC will be appointing one full time employee to work with the consultant and be the "eyes and ears" of the JPC while the Project software and hardware are developed, during operation of the actual Pilot Test (April 1, 2010 through March 31, 2011), and in post pilot test evaluation. While the ideal candidate would be full time and have experience in both areas described below, the JPC may hire two individuals part time to cover the experience required. The project is expected to end at some time between August and October 2011. The person(s) selected would most likely be based in New York City but the JPC is open to discussions in that regard for qualified individuals. Some travel will be required.

The candidate(s) needs the following experience and skills:

  1. Media Buying: At least five years experience as a media buyer. Experience requires a thorough knowledge of up front and scatter buying, in network, national cable, and syndication. The person chosen must also have a thorough knowledge of how to apply Neilson ratings (C-3) to media buys and how such media buys are reconciled in order to be certain the GRP's promised are delivered, including credits and make-goods.
  2. Talent Payments: A thorough knowledge of the SAG and AFTRA Television Commercials Agreements with a minimum five years experience in paying actors under those agreements including experience in working with databases used in such payment process, handling audits by the unions, reconciling claims and familiarity with internal agency processes between media buying, talent payment and broadcast traffic departments.

The individual(s) hired for each role will be expected to work closely with the consultant and report back to the JPC on a weekly basis with respect to developments in the Project. The individual(s) will be employed directly by the consultant. The candidate will be expected to work from both their residence and the consultant’s offices.

Salaries for the positions will be commensurate with the individual's experience and the full or part time status.

Please send your resume to Marilyn Colaninno at Reed Smith LLP, 599 Lexington Avenue, New York, NY 10022. 

Unauthorized Postings of Commercials to Third Party Websites such as YouTube

Earlier this week, we posted a blog entry that discussed the issue of signatory talent payment obligations in relation to the unauthorized posting of commercials on third party websites such as YouTube. A number of readers have asked for clarification on the following two points:

Q: If an advertiser is made aware that a commercial has been posted on a website without their authorization and the advertiser does not notify the website to remove the commercial, is the advertiser obligated to make an internet payment to the performers in the commercial?

A: No. It has consistently been the JPC's position that regardless of whether an advertiser has been notified of an unauthorized posting or not and regardless of whether it decides to demand that a spot be pulled down or not, the advertiser is not obligated, at any time, to pay any fees to performers who appear in those spots.  The individual performers can, of course, pursue action against the third party website or the third party that posted the spot to protect their individual rights, but they cannot look to the advertiser to make payments for such use.

You should be aware that the unions may not share the JPC's position on unauthorized postings. In our experience, although the unions may seek internet use payments in their initial claim, they withdraw such a demand if the advertiser requests removal of the material from the offending website. The JPC does not believe that an advertiser is required to do so under the contract, but some advertisers have chosen to in order to avoid the costs and risk associated with defending a claim. That determination is up to each individual advertiser.

The JPC is unaware, however, of any advertiser capitulating to the unions' demands for internet use payments in the case of unauthorized use. Nor does the JPC recommend doing so, as it may not only place advertisers at a competitive disadvantage relative to the market but also create unhelpful precedent for the industry in future negotiations or arbitrations.

Q: What about other copyrighted or licensed material in the commercial?

A: Signatory obligations under the contracts relate only to the payment of performers in commercials. Commercials may contain other material the use of which may be restricted by license/contract agreements, e.g. stock music, celebrity contracts, photographers contracts, etc. You are advised to seek legal counsel on these issues in regard to specific ads and commercials should you receive a demand from those third parties.

Unauthorized Uploads to YouTube

It has come to the JPC's attention that the unions have been demanding payments be made to performers for commercials that have been uploaded to Internet services like YouTube without the advertiser's or advertising agency producer's authorization and that the advertiser or advertising agency has an obligation to notify YouTube to pull down a commercial that has been posted without authorization. As far as the industry is concerned, there are no fees due for unauthorized uploads. Moreover, there is no legal or contractual obligation on the part of the advertiser or advertising agency producer to demand that YouTube pull down a posting. While the advertiser has the right to do so as the copyright owner of a commercial, it is not obligated to do so by law and most certainly not obligated to do so under the collective bargaining agreements with the unions. Of course, any performer who appears in a commercial that has be improperly uploaded is free to pursue whatever individual rights her or she may have for violating the performer's rights of privacy or other personal rights. The industry's position is fair and reasonable. It would be prohibitively costly and time consuming for advertisers and advertising agencies to monitor the Internet for every unauthorized upload. Nor is it reasonable to expect an advertiser or advertising agency to set up the internal bureaucracy to administer a policy regarding demands for removal. Should you receive any union demand that asserts a fee is owed to performers for a commercial that is uploaded without authorization, the JPC wants you to be aware of the industry position as you determine how to respond to such a union demand. If you have any questions, please feel free to contact Douglas Wood at 212 549-0377; dwood@reedsmith.com or Greg Hessinger at 212 549-0228; ghessinger@reedsmith.com.

Allocation Dispute Procedures

We have received some questions on how existing allocation disputes in multi-service celebrity endorsement deals should be resolved in light of the procedures adopted in the new Collective Bargaining Agreement (“CBA”).

As you are fully aware, the determination of appropriate allocations of compensation between covered and non-covered services in multi-service contracts and the process to resolve disputes in that regard have been major issues between the Unions and the Industry for many years. Controversies and disagreements over allocations have resulted in litigation and substantial costs for all the participants, and the previous procedure left Producers at a distinct disadvantage. The prospect of litigation under federal pension laws and the remedies afforded the Pension Plans under those laws created an uneven playing field. The new procedures create a more balanced approach considerably more favorable to Producers.

At the negotiations of the new CBA, the Industry pressed for a more precise methodology to determine allocations and a dispute resolution format that precluded the Plans resorting to litigation under ERISA until such time as the Unions and the Producer either agreed on an allocation or settled a dispute through an expedited arbitration procedure. The Industry took the position that such an approach was mandated by the decision in the arbitration brought by the JPC against SAG over resolving disputes over allocations. The Unions and Industry also agreed on a set of Guidelines that are presumed safe harbors, although that presumption is rebuttable should the Unions show adequate reason to disregard them.

Since the Industry and Unions did not address whether the new procedures should be retroactive, they are not binding on either Producers or the Unions with respect to disputes that arose prior to adoption of the new CBA. That said, however, it seems logical that the new provisions should apply to existing allocation disputes, including the agreed-upon Guidelines, for the following reasons:

  1. The decision of the arbitrator and the U.S. District Court in the action between the JPC and SAG clearly provides that arbitration is the method to resolve disputes. The arbitrator held and the U.S. District Court confirmed the arbitrator’s opinion that such a conclusion was mandated by the language contained in the then current CBA. Since this holding interprets the language contained in the previous CBA (and, by extension, the same language in prior CBAs), the requirement to arbitrate disputes applies to all pending allocation cases. While one could argue that the expedited process agreed upon under the CBA is not retroactive, I believe that process is fair and reasonable and ought to be the approach taken by the parties. Otherwise, any arbitration will be complicated and expensive, as well as subject to appeal if the Unions feel they didn’t get enough.
     
  2. Whether the old, unpublished, allocation guidelines or the new formal Guidelines should apply in such disputes is unclear. What is clear, however, is that the Industry never agreed to the old guidelines. The formal Guidelines in the new CBA, however, reflect an agreement arrived at through the collective bargaining process and, as such, represent a set of mutually acceptable criteria between the Unions and the Industry. As such, it seems abundantly logical that they ought to apply to existing disputes. Also note that the new Guidelines recognize that there may be disputes that do not fall under any of the specific guidelines. In those instances, the parties are free to either agree to an alternative solution or to submit a dispute to arbitration.
     
  3. All future disputes will be governed by the new provisions and the Guidelines. Positions contrary to the new provisions taken in the future by either the Industry or Unions will set no precedent. As such, is makes sense to take advantage of the efficiencies and economics now embodied in the CBA and resolve old cases with due consideration of the newly bargained for procedures.

Of course, no one is in a position to bind any Producer to adopting the new procedures with regard to existing disputes. Each Producer must make a decision under the facts and circumstances of their specific case.

Why Be a JPC Authorizer?

Few people are aware that the union collective bargaining agreements that govern the employment of performers and musicians in commercials in traditional and non-traditional media are collectively the largest union agreements in the entertainment business. Under these agreements, advertisers pay union performers and musicians nearly $1 billion a year. In the collective bargaining process, the industry is represented by the ANA/4A's Joint Policy Committee for Broadcast Talent Relations (JPC), while actors in commercials are represented by the Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA), and musicians who perform in commercials are represented by the American Federation of Musicians (AFofM).

In May of 2009, the membership of SAG and AFTRA ratified the new three-year television and radio commercials agreements, which was the culmination of two months of negotiations between the JPC, SAG and AFTRA. As part of the new agreement, the unions and the JPC have agreed to conduct a two-year multi-million dollar pilot project to test a new way to pay performers that represents fair compensation, but also provides advertisers with a measureable return on their investment. The pilot will test the GRP Payment Model developed by Booz & Company in a $1.4 million study previously commissioned by the JPC and the unions.

Negotiations with the AFofM will commence in October 2009.

Advertisers and advertising agencies can become signatories to the SAG, AFTRA and/or AFofM contracts either by authorizing the JPC to represent them in collective bargaining or by directly signing onto those contracts after they are negotiated by the JPC. While the vast majority of major advertisers and advertising agencies are represented by the JPC, this memorandum explains why it’s critically important that responsible advertisers and advertising agencies be a part of the bargaining process through the JPC as opposed to being direct signatories with the unions.

Click here to download the full white paper.

Memoranda of Agreement for SAG/AFTRA Television and Radio Commercials Contracts are Now Available

The Joint Policy Committee recently negotiated new 3-year agreements with SAG and AFTRA covering performers in television and radio commercials. Copies of the Memoranda of Agreement are attached below:

AFTRA and SAG TV Commercials - Late Night Waiver 2009 - 2012

AFTRA and SAG have extended the provisions of the Late Night Waiver for television commercials through March 31, 2012. The previous payment rates under this waiver have been increased by +4.43%.

A copy of the waiver and new payment rates can be found here

SAG and AFTRA 2009 TV and Radio Agreements - Revised Rate Charts

Revised SAG 2009 TV Commercials and AFTRA 2009 RADIO Commercials rate charts are available.

These rate charts have been revised to reflect minor rounding corrections to the previously issued documents. You will also find some additional explanations/clarifications based on questions we have been receiving from members.

The AFTRA TV 2009 Rate Charts are identical to the SAG TV 2009 Rate Charts and will be posted separately. 

Seminar on New SAG/AFTRA Radio and Television Commercials Contracts

On June 8 and 9, the JPC and Reed Smith held seminars/webinars on the new agreements with SAG and AFTRA. Click here to review the PowerPoint presentation. Please note the correction on the Extra Allowance from $5.74 to $5.75 for laptops, PDA's and similar devices.

Click here to listen to day two's presentation.

FAQs on Commercial Service Fee

Douglas Wood, JPC Lead Negotiator, answers questions from the advertising community on the new Commercial Service Fee.

SAG/AFTRA Developments

On April 1, 2009, the advertising industry came to an agreement with the Screen Actors Guild and the American Federation of Television & Radio Artists on a new three year collective bargaining agreement. Reed Smith partner, Douglas Wood, is the advertising industry's lead negotiator in connection with those agreements. The unions ratified the deal on May 21, 2009. We have attached a number of memos that outline the new agreement and provide for answers to frequently asked questions, i.e.:

1.  Executive Summary
2.  FAQs
3.  Notice in Industry re Commercial Services Fee
4.  Memorandum on Commercial Services Fee

We welcome your review and comments.

LA Scale...Not

Effective April 1, 2009, the JPC negotiated a new three-year collective bargaining agreement with SAG and AFTRA for actors who perform in television and radio commercials.

It has come to our attention that some voice-over agents in Los Angeles continue to demand so-called "LA Scale" for radio commercials, a rate significantly above the scale rates the JPC and AFTRA negotiated in the collective bargaining agreement covering radio commercials. We also understand that “LA Scale” usually goes up immediately after a new contract is agreed upon. It is entirely unclear to us who decides to implement such an increase. It is also unclear whether any agents have collectively agreed to demand LA Scale or to increase it.

The JPC and AFTRA did not agree to LA Scale, nor to any other local premium over the minimum scale fees contained in the AFTRA Radio Commercials Contract. In truth, the advertising industry and AFTRA have never collectively agreed to LA Scale.

While individual agents can demand whatever they wish in negotiations, producers are only obligated to pay no less than the minimums in the collective bargaining agreement. While a producer can certainly agree to pay more, it is not mandated by any collective bargaining agreement. Any perception that LA Scale is a negotiated minimum compensation for productions in Los Angeles is totally false.

Of course, agents and producers are free to negotiate for rates higher than the minimums. But such negotiations must be on an individual basis. As a group, agents cannot agree among themselves to only accept a higher fee, any more than producers can conspire to pay less than the minimums required in the collective bargaining agreement.

Should you encounter any agent claiming that LA Scale is an agreed-upon rate and is required as a matter of right or obligation, please report such statement to me. If you receive anything in writing from agents demanding LA Scale, please forward it to me, subject, of course, to redacting any information you feel is confidential. And regardless of how you deal with the issue, if an agent insists on LA Scale, be sure the agent explains exactly what the agent means by LA Scale and precisely what rate they are demanding for both session and residuals.

If you wish to make such a report or if you have any questions, please contact me at 212 549 0377 or dwood@reedsmith.com.

New Rate Charts

The JPC and the unions have agreed on the new rate charts. Remember that while you can now pay under those rates, should the new Contract not be ratified by the unions (expected within a month), you will have to seek refunds. If you prefer, you can pay under the old rates and issue a retroactive payment once the formal approval of the new Contract is accomplished. Retroactive payments must be received by the performers no later than June 15, 2009.

FAQ on Timing for New SAG/AFTRA Contract

Q: What timetable now applies to implementing the new Contract?

The new Contract began April 1, 2009, but is not officially approved until the SAG and AFTRA Boards and members vote favorably on its ratification. The union voting process should be completed by May 15, 2009. Since the new Contract was unanimously approved by the SAG and AFTRA negotiating committees, it is virtually assured that it will be ratified by the union Boards and members. But nothing is certain, so there are two options:

  • Continue to operate under the current contract and make retroactive payments of the new rates once the union Boards and members ratify the new Contract
  • Pay the new rates (the unions have issued new rate charts), and run the risk that the new Contract will not be ratified and refunds might be required. Since getting refunds for overpayments from actors is very difficult, the risk associated with paying the new rates may outweigh the benefits of avoiding additional accounting. Each company needs to make that determination on an individual basis.

Q: How long until the deal is ratified by the unions’ Boards and members?

The new Contract was unanimously approved by the Commercials Committees of both unions. It will now go to each of the union Boards for approval, and will then be sent out to the union members for a vote on ratification. This entire process should be completed by May 15.

Q: Until the new rates are published, how should I pay actors?

It is probably better to pay under the old rates until the new ones are all agreed upon. Then you will be able to make retroactive payments to actors. The proposed new rates will be published shortly, but will not be official until the unions’ Boards and members ratify the new Contract. While you can pay under the new rates prior to ratification, you then take the risk of seeking reimbursement should the unions’ Boards or members fail to ratify the new Contract.

Q: Which commercials are subject to the new rates and new Contract provisions?

The new rates, terms and provisions apply to the following:

  • All original commercials produced on or after April 1, 2009
  • All new or additional versions of commercials originally produced under prior contracts for commercials that are integrated on or after April 1, 2009 under the Integrating of Commercials into Different Commercials  provisions
  • All versions of commercials that are edited and aired after April 1, 2009, other than as expressly permitted under the Editing of Commercials provisions

Any terms, rates or conditions of current performer contracts that are more favorable to the performer than those under the new Contract remain in effect, although we are not immediately aware of any such provisions.

Q: Can I still freely bargain for made-for-Internet or made-for-New-Media commercials, and set any rate I can get the actor to agree to?

Yes. The minimums will not apply until April 1, 2011. So you can continue to freely bargain until that time. Even when the minimums are established, your right to freely bargain on editing remains.

Q: What happens now with the eight-week cycle for the Internet and New Media?

The eight-week cycle is now a permanent part of the new Contract. You can run consecutive eight-week cycles as well. Nor do you need to ask an actor if you can use his or her spot for an eight-week cycle if they have not objected to Internet use. With regard to rates, the one-year moveover rate is now 3.5 session fees, and the eight-week cycle is now 1.33 session fees.

Q: Will the JPC be conducting any seminars to explain the new Contract?

Yes. We’ll have a schedule for seminars out in a few weeks.

Q: Where can I get more information?

Information will be forthcoming as it develops. For the next few weeks, you need to be patient as documents are finalized and rates are set. The SAG and AFTRA approval process will also take us through to May 15. But I’ll try to keep everyone posted on my JPC Blog at the ANA website, as well as here on the Adlaw by Request blog. In the meantime, please feel free to email me at dwood@reedsmith.com or call me at 212 549 0377.

SAG/AFTRA Commercials Contract Negotiations

As you are all aware, we're approaching the "midnight hour" in our negotiations. While both sides have made major progress and I remain cautiously optimistic, the next couple of days will be critical to reaching a new agreement. In the meantime, there is no reason to believe that there will be any immediate disruption in commercial production even if we don't come to a final agreement before midnight, March 31. Both sides continue to have open and productive negotiations.

Update on the Status of Negotiations

Yesterday, you may have read reports in the trades that SAG and AFTRA had prepared a strike authorization letter to send to their members and that talks were not going well. As reported by the unions, the release of the draft letter was unauthorized. In a joint statement from SAG and AFTRA, the unions stated, “We are making every effort to negotiate a fair contract and remain optimistic that we will bring these talks to a successful conclusion. Today, there was an unauthorized distribution of a draft strike authorization letter. This is one of many contingency documents that we prepare in the course of any negotiations, particularly as we approach the expiration of a contract. Our members understand that this is a normal part of the bargaining process. We will continue to bargain in good faith with the industry in an effort to get a deal.”

As I reported earlier, the rumors that things are “grim”, as one reporter opined, could not be further from the truth. Both sides continue to negotiate in good faith with every intention of avoiding labor disruption. While there are serious issues on the table, those who are bargaining for both the unions and the industry continue to build on the positive relationship the two sides have developed since first embarking on the joint study on performer compensation the two sides commissioned from Booz & Company in 2006.

Nor is the JPC concerned that the unions may be drafting potential notices to their members. Doing so, as the unions reported, is a normal part of the process and no different than the JPC’s preparation of draft notices to authorizers should developments require alternative planning.

Working with SAG, AFTRA, and AFofM - Union Updates

2009 Commercials Contract – Multi-Service Contract Requirements

Update on SAG/AFTRA Issues

Trust Agreements for SAG - Producers P&H Plans

The following documents constitute the Trust Agreements for the Screen Actors Guild-Producers Pension and Health Plans.

2009 SAG and AFTRA Negotiations

Understanding the GRP Model Webinar

Here is a copy of the presentation:  Understanding the GRP Model


Presentation at 2008 ANA Advertising Law & Business Affairs Conference

Booz Allen Hamilton Talent Compensation Reports

Seminars and Webinars on New Compensation Models for Actors in Television Commercials

  • Click here for the Media 101 handout.
  • Click here for the Talent 101 handout.
  • Click here to view the .PDF version of the presentation from the July 15 seminar.
  • Frequently Asked Questions from the seminar/webinar.

Courts and Arbitrations

Working With Celebrities

Canada (ACA, ICA, ACTRA)

Collective Bargaining Agreements

Continuation of 2006 Extension

Letter of August 6, 2008

Letter of August 22, 2008

 

SAG and AFTRA Television and Radio Commercials Contracts

Preparing for the Worst

2008 Negotiations


Writers Guild of America

2008 Agreement Summary


2006 Extensions SAG

SAG Executed TV Agreement

2006 Extension AFTRA

AFTRA Executed TV Agreement

AFTRA Executed Radio Agreement

2003 Contracts

Summaries

Waivers, etc.

 

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