On April 2, 2019, nearly two days after the expiration of the 2016 Commercials Contract, SAG-AFTRA and the Joint Policy Committee — the negotiating body for advertising agencies and advertisers — reached a tentative agreement to succeed the 2016 Commercials Contract.

SAG-AFTRA made their announcement here, and the JPC made their announcement here.

What’s Next

Article XI(B) of the SAG-AFTRA Constitution dictates what happens next after this tentative agreement was reached:

All multi-employer collective bargaining agreements that are national in scope shall be approved by the National Board and submitted for ratification by the members affected thereby. Such ratification may be made either (a) by majority vote of the members voting in a referendum conducted by mail or electronic means under policies and procedures established by the National Board, or (b) by majority vote of the members voting in meetings held in accordance with policies and procedures established by the National Board.

In other words, presuming that the National Board approves the tentative agreement, then SAG-AFTRA members will have the privilege of voting to reject the tentative agreement (and send SAG-AFTRA and the JPC back to the bargaining table) or ratify the tentative agreement (and make it the 2019 Commercials Contract). More than likely, the vote will be conducted electronically and by mail rather than at meetings.

The SAG-AFTRA National Board is set to vote on whether to approve the tentative Commercials Contract at the board meeting this coming weekend, April 13 and 14, 2019.

Why SAG-AFTRA Members Don’t Seem to Reject SAG-AFTRA’s Proposed Contracts

While SAG-AFTRA has a membership population of 160,868 as of July 30, 2018 (per its 2018 LM-2 report), if past member voting behaviors apply, then only a fraction of SAG-AFTRA members will cast their vote on this proposed 2019 Commercials Contract.

What this probably will mean is that a tiny, tiny fraction of members will vote in favor of the proposed contract, and that tiny fraction will damn the rest of SAG-AFTRA members to the terms of the proposed contract for the next years to come.

For example, using the 2018 membership count, if 10% of SAG-AFTRA members voted on this contract, that would equate to 16,087 votes.  For a majority, only 8,044 SAG-AFTRA members would need to vote yes to ratify the tentative Commercials Contract.

In other words, only 5% of SAG-AFTRA members in this hypothetical example need to vote in favor of ratification in order to have an effect on the remaining 95% of SAG-AFTRA members and their work in union commercials over the next number of years.

And given that SAG-AFTRA regularly submits referenda to its members telling them to “Vote Yes,” a majority in favor of ratification is nearly assured, no matter whether the actual majority of more than 160,000 SAG-AFTRA members is truly in favor of the proposed contract or not.

This means that of that hypothetical 10% of members who vote on the proposed Commercials Contract, if, say, 90% of them voted in favor of the proposed Commercials Contract, and if 10% of them voted against it, that would be 14,479 members in favor of ratification and 1,608 against ratification.

That would essentially mean that only 1,609 SAG-AFTRA members would have to vote in favor of ratification — just one vote more than 1,608 who voted against ratification — to create a majority over those members against ratification.

This hypothetical tally translates to just 1% of SAG-AFTRA members voting to ratify the proposed 2019 Commercials Contract in order to mandate it for all 160,868 SAG-AFTRA members for the coming years.

SAG-AFTRA proposed contracts tend to get ratified partly because the union tells SAG-AFTRA members how to vote, and partly because of an apathetic membership that generally does not think for itself or read the proposals. But SAG-AFTRA proposed contracts get ratified also partly because most SAG-AFTRA members do not vote at all. SAG-AFTRA must know with great confidence that if it tells its members how to vote, it will get the votes it wants to ratify its contracts, as it usually only takes a couple thousand or so yes votes.

What’s Known

As of this post on Stand-In Central, there is very little publicly known about the contents of this tentative agreement.

While SAG-AFTRA and the JPC were under media blackout during the negotiations that commenced on February 20, that did not stop SAG-AFTRA’s chief contracts officer Ray Rodriguez and JPC’s chief negotiator Stacy K. Marcus from presenting publicly on March 19 at the ANA’s Advertising Law & Public Policy Conference in Washington, D.C.  This presentation was made, not for SAG-AFTRA members, but primarily for advertising industry legal counsel.

Presumably a SAG-AFTRA member could have attended to listen to Rodriguez’s D.C. presentation, but registration would have cost that SAG-AFTRA member $1,570, which seems a truly unfair cost for a SAG-AFTRA member to learn about his or her Commercials Contract and the current negotiations.

That said, Jeff Greenbaum of Frankfurk Kurnit Klein & Selz PC wrote a blog post about the co-presentation by SAG-AFTRA’s Rodriguez and JPC’s Marcus.  Some highlights of that presentation are below, and here is a photo of a slide from that presentation:

A slide from the co-presentation by SAG-AFTRA’s Ray Rodriguez and JPC’s Stacy K. Marcus at the ANA’s Advertising Law & Public Policy Conference on March 19, 2019

The slide lays out that SAG-AFTRA’s key issues in the 2019 Commercials Contract negotiations were:

  • protecting performer value and earnings
  • increasing union job opportunities
  • supporting SAG-AFTRA’s benefit plans
  • safety

In Greenbaum’s blog post, he quotes SAG-AFTRA’s Rodriguez as saying, “We are acutely conscious of the fact that the contract is no good if nobody uses it.”

The JPC’s key issues were:

  • uneven playing field (signatory ad agencies vs. non-signatory ad agencies)
  • contract complexity
  • growth in digital (i.e., digital media)
  • outdated contract

Greenbaum gave these insights into the JPC’s position:

Stacy Marcus, the JPC’s Chief Negotiator, said that, there is a “growing disparity” between the costs incurred by, and the methods used by, signatories and non-signatories.  Talking about the need to simplify the contract, Marcus said, the “risk of being wrong carries significant monetary liability.”

Greenbaum’s blog post is further elucidating, as it explains not just the union and management’s key issues, but also “key hurdles” and “common goals” in the 2019 negotiations for the Commercials Contract.

As for SAG-AFTRA’s key hurdles, the balance of compensation and losing job opportunities was a highlight, as was gaining access to streams of income now and in the future. “Wherever the dollars go, that’s where we want to be,” said Rodriguez. Also a key hurdle was teaching SAG-AFTRA members about the Commercials Contract.

The JPC had different hurdles, including the transitional phase the advertising industry was in and where that momentum was carrying it, plus an increase in industry spending but a stagnation in earnings from digital media. “Everyone has complaints about this contract, but everyone is fearful of change,” Marcus commented.

Marcus also commented that both the JPC and SAG-AFTRA need to take a “leap of faith” to make needed changes around the administration of the Commercials Contract going forward. In light of that comment, both Rodriguez and Marcus apparently agreed that their common goals in the negotiations were “simplification, modernization, and flexibility.”

Those in the audience were allowed to ask questions — which is something that even SAG-AFTRA members were not permitted to do during the negotiations.

One question seemed to be about payroll companies having signatory status and more or less renting out that status to otherwise non-union production companies, in order to make their commercial a union production.  In effect, this would make non-union production companies one-off union production companies, so that they could employ a SAG-AFTRA member for one job. The 2016 Commercials Contract essentially forbade this kind of arrangement, because a payroll company is not a “bona fide” producer of commercials. That language was in I(1)(C) of the now expired 2016 contract:

Employment by a Producer

In order for a performer to be “employed by a Producer,” […] the performer must be employed by a bona fide producer of commercials covered by the Contract. The Union reserves the right to reject or revoke the signatory status of any company if that company is not a bona fide producer of commercials.

Greenbaum writes that Rodriguez said that “we have had about enough of that” kind of arrangement, and that SAG-AFTRA wants its relationship to be with the actual employer of SAG-AFTRA members.

Ben’s Note:

Payroll companies are commonly used in the payment of background actors and stand-ins in TV and film, but these payroll companies are usually not signatories of union contracts. Instead, in TV and film, these payroll companies are usually merely agents of signatories (i.e., agents of production companies).

In commercials, some companies that perform payroll services have somehow achieved signatory status to the Commercials Contract and allegedly “rent” out that status to their production clients to allow those productions to use union actors. Arguably, these payroll companies are not “bona fide” producers of commercials. The topic came up in 2018 and SAG-AFTRA put some signatories and their signatory status on watch.

Marcus told the audience that she believes SAG-AFTRA will be more aggressive in the administration of its Commercials Contract going forward. Before saying that, Rodriguez told the audience if a signatory to the Commercials Contract wants out, SAG-AFTRA would negotiate with that signatory, but he hoped the signatory would appreciate the terms of this tentative agreement.

What’s Also Known

About two weeks after the ANA Conference, SAG-AFTRA and the JPC reached their tentative agreement, and the press releases vaguely shared some of the agreements they reached.

Pulling from SAG-AFTRA’s press release, the following gains could be gleaned:

  • an innovative and flexible alternative compensation model
  • that specifically addresses the realities of the modern advertising business
  • while preserving and enhancing opportunities for actors to have a professional career
  • across-the-board wage increases for all categories of work
  • increases to the benefit plans
  • coverage of stunt coordinators
  • outsized gains to group dancers
  • protections against workplace sexual harassment
  • streamlined processes for commercial agents representing SAG-AFTRA members

The following additional language gives more senses of what SAG-AFTRA gained, but in arguably vaguer language:

  • delivers essential gains
  • positions performers and the industry for growth in a rapidly changing environment
  • a real step forward for actors in this space
  • modernizes the commercials contract making it more relevant to the industry now and into the future
  • a monumental advancement in growing our jurisdiction
  • speaks to the needs of the membership and the evolution of our industry
  • a landmark agreement that protects industry and member interests
  • creates a structure that will also grow the opportunities for years to come
  • transformative agreement
  • design real solutions to the challenges facing the advertising industry

What does that spell for the 2019 Commercials Contract that SAG-AFTRA members may get to vote on?

Some Guesses about What’s in the Tentative 2019 Commercials Contract

Wage Increase Guesses

First, let’s talk about compensation. Across-the-board wage increases are common gains in SAG-AFTRA negotiations. If recent behavior is any guide, the union will have achieved what they will call a 2.5% to 3% wage increase over the next three years. Group dancers will be the only class of commercial workers to get larger than a 3% increase in their wages, I suspect only for 2019.

However, reading more closely, and keeping with recent behavior evidently to fund the union’s benefit plans, SAG-AFTRA will not have achieved all of the wage increases as decisively as it will try to portray to SAG-AFTRA members. Instead, the wage increases will be conditional.  And given that the union also won “increases to the benefit plans,” the following is what I suspect will be in the details.

My guess is that at least one of the years of the tentative contract will decidedly be a 2.5% increase in wages — probably 2019. The years 2020 and 2021 will conditionally be 3% wage increases. “Conditionally,” because SAG-AFTRA will reserve the right to trade in those 3% wage increases, for 2.5% wage increases along with boosts in payments to the SAG-AFTRA Health Plan and SAG-Producers Pension Plan.

So, in short, I predict a 2.5% increase in wages for 2019. For 2020 and 2021, wage increases will conditionally be 3% increases, but more than likely the union will trade at least one of those years’ increases for higher contributions to the union benefit plans, making for at least one other year with only a 2.5% wage increase.

More Rates That Are “Negotiable” Dictated by Commercial Producers

Out of the gate in the press release, SAG-AFTRA announces “an innovative and flexible alternative compensation model.”  I track this as language aimed at sugarcoating a dramatic and jarring change in compensation for union actors working in commercials.

Given that the JPC’s Stacy K. Marcus was coaxing SAG-AFTRA to take a “leap of faith,” I expect something revolting in terms of how union actors are compensated in commercials, and something that will inevitably exploit union members as time goes on and as signatories find a sustainable way to lower their costs.

I suspect this “alternative compensation model” will rid of residuals for some commercials and replace them with buyouts for some commercials.

That would not be “innovative” in that buyouts are common for non-union actors in commercials, so I anticipate there is more to be said about residuals and their proposed loss.  “Innovative” and “leap of faith” will go hand in hand, and I suspect in SAG-AFTRA’s following an “innovative” route, it will lower the price of its members, whom they quixotically tout as “professionals.”

The word “flexible” makes me think that the proposed Commercials Contract will relax the hard-fought minimum wages and working conditions guaranteed by past versions of the Commercials Contract, and make those wages and working conditions “negotiable” if the budget of the commercial is low enough. That usually translated to wages that were lower than the minimums outlined in the 2016 Commercials Contract. I suspect the Low Budget Digital Waiver, which was set to expire with the 2016 Commercials Contract, will either be extended or incorporated into the proposed 2019 Commercials Contract.

If wages on lower budget commercials become “negotiable,” I suspect that translates more realistically to the production dictating to SAG-AFTRA members what they will pay them, rather than making all rates a matter of a back and forth of offers and counteroffers between desired performers and producers. If a commercial has a lower budget, they don’t really have time and money to “negotiate” with their actors.

To that point: When rates are “negotiable,” what is the point of having a negotiating committee? The burden of collective bargaining is put on SAG-AFTRA members when rates are “negotiable,” rather than put appropriately on the union to whom members pay it agency fees to bargain.

Obsequiousness to the Ad Industry

By addressing “the realities of the modern advertising business,” I suspect SAG-AFTRA is recognizing that being a signatory to the Commercials Contract increases costs for ad agencies and threatens their livelihood in the face of non-signatories, that can thrive competitively without union talent and the cost savings that implies.

So, I predict the union will be more willing to cut waivers over the course of this contract that undercut member wages and working conditions on commercials. These waivers will essentially be more in the interest of ad agencies, while simultaneously being in the disinterest of SAG-AFTRA members, without SAG-AFTRA members even really being able to do anything about it.

Furthermore, SAG-AFTRA members won’t have a lot of clear guidance on what is waived on a commercial when taking a commercial job, instead being relegated to finding out after showing up to work or in the face of a grievance against a production.

In other words, when SAG-AFTRA sympathizes with the JPC, the JPC gets compromises on SAG-AFTRA member wages and working conditions, and the JPC gains not just piece by piece, but eventually on the whole. SAG-AFTRA being servile to the JPC may seem fair, but it is also part of the con.  Think back to New Media when it first appeared in contract, how the union underpriced its members working on New Media, and where the work tended to go …

“Ability to Have a Commercial Acting Career” Guesses

While I suspect there will be buyouts for union actors working in commercials, it’s arguable to see whether that translates into the ability to have a commercial acting career again.

Those actors who bemoan the loss of commercial work, I suspect will be faced with commercial acting jobs that still will not have the kinds of paychecks as they did back when a few commercial jobs a year would maybe set you for that year.

I anticipate that wages will be conditional based on production budget, and buyouts and substandard residuals will be in the mix, so the commercial actor might return to union work, but the commercial actor will also have to hustle more than before — for lower wages on the whole. Think the gig-economy mentality hits the commercial actor.

I suspect commercial actors will be better able to “feed their families,” but those commercial actors will be feeding their families with conventional rather than all organic food — so to speak.

Recall what J.K. Simmons said in a SAG-AFTRA-produced hostage video, and then compare the gains outlined in the tentative agreement with Simmons’s demands when it comes to commercials. Of note, ask yourself when it comes to the proposed contract SAG-AFTRA sends its members, whether ad agencies will get to “pick and choose” what they pay SAG-AFTRA members working on union commercials, and whether that practice allows members to “earn a living, pay their bills, feed their families”:

Stand-Ins

Nothing is said about stand-ins in the press release. So, I suspect they will get the same wage increase that others will get. I also suspect they will be victims of lower wages on some jobs if the commercials are lower budget.

All in All Guesses

Taken as a whole, and with the consideration of what SAG-AFTRA and the JPC presented at the ANA Conference, it seems that the proposed 2019 Commercials Contract will look and sound a lot different than the 2016 Commercials Contract.

For one, it will be flexible, but in somehow being flexible, it will also be simpler. I’m not sure how it will exhibit both characteristics, but perhaps rates will be clearly tiered by budget, and perhaps members can work for less than the minimums set by the 2016 Commercials Contract.

The proposed contract’s modernity will be witnessed in paying lower rates to SAG-AFTRA commercial actors, to be more “competitive” with the rates and buyout practices in non-union commercials. This will help to ensure that SAG-AFTRA maintains jurisdiction in commercials and also secures contributions to its benefit plans (which seems to drive a lot of SAG-AFTRA’s monetary bargaining).

The latter is probably more important to the union; the former maybe is more important to SAG-AFTRA members. But if wages are lower in commercials than they used to be, commercial work loses a lot of its cachet.

Other Predictions

I suspect that SAG-AFTRA, should it send the tentative Commercials Contract to its members, will suggest that the gains of the agreement will not be achievable if SAG-AFTRA members don’t vote yes. The implication would be that if SAG-AFTRA members vote no instead, there will be no agreement at all, and that commercial actors will be “SOL.”

In truth, should a majority of SAG-AFTRA voting members reject the Commercials Contract the National Board sends to them, more than likely what will happen is that SAG-AFTRA and the JPC will reconvene negotiations to hack out a new tentative agreement that SAG-AFTRA members will pass.

Such a new proposed agreement would definitely have differences from the first, with some gains for the first agreement being lost and some better gains being achieved in the second agreement, in the effort to placate SAG-AFTRA members to vote yes on it. But I predict scaremongering by SAG-AFTRA in coaxing its members to vote yes on the proposed Commercials Contract it sends them, so I doubt there will even need to be a second round of negotiations. I predict SAG-AFTRA members will ratify what the SAG-AFTRA National Board sends to them in terms of a proposed 2019 Commercials Contract, even if there are serious flaws for SAG-AFTRA members working in commercials now and in the future.

Stay Tuned

Look out for future posts around the presumably forthcoming proposed 2019 Commercials Contract. While you can probably expect many reasons Stand-In Central will encourage you to “Vote No,” perhaps we will be persuaded otherwise.

Do you have any information that supports the above guesses? Any corrections on the above information? Post your comments below!