Part 1: SAG-AFTRA Members Ratified the 2019 Commercials Contract — How Good Were Stand-In Central’s Guesses?

This is a two-part post. Next week will be part two, which you can find here when it’s published.

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— The Editor

On April 10, 2019, Stand-In Central wrote about the contents of SAG-AFTRA’s proposed 2019 Commercials Contract, which the union had recently negotiated with the Joint Policy Committee.

At press time for that post, the proposed contract was not available and wasn’t event approved by SAG-AFTRA’s board, so we posted our guesses on what the proposed 2019 Commercials Contract contained.

Eventually, SAG-AFTRA’s board approved the proposal and sent it to SAG-AFTRA members for ratification. The union provided this booklet detailing the proposal but did not disclose the memorandum of agreement to SAG-AFTRA members. Instead, the Joint Policy Committee disclosed the memorandum of agreement. It could be found here on the JPC website. (Last we checked, the JPC’s website is down.)

On May 8, 2019, the union announced that SAG-AFTRA members ratified both the 2019 Commercials Contract and the 2019 Audio Commercials Contract.

How did Stand-In Central do with our guesses? Let’s see!

Wage Increases

Our Guess

[…] 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.

The Actuality

Increase all contract rates by 6%.

and

All dancer groups now paid at 3+ rate (previously 3-5 and 6+).

How Was Our Guess?

The actuality was a bit of a surprise to us, mostly because of a failure to recall the past pattern of wage increases for the Commercials Contract. The wage increase for 2016 was 7%. The guesses we provided were based on the pattern of increases for the SAG-AFTRA Television/Theatrical Contract, which is a very different contract and different negotiating opponent than the JPC.

That said, the Television/Theatrical Contracts, while achieving an advertised 2.5% to 3% wage increase, only ever earned SAG-AFTRA members 2.5% increases in wages (as per this rate sheet updated on November 28, 2018). Given that knowledge, it doesn’t surprise me that SAG-AFTRA underwhelmed in the pay raises it gained in this negotiation. Were we to guess again, we would have thought a 6.5% increase in wages, but we still would have been wrong.

We also failed to recognize that wage increases generally are for the term of the contract, rather than annually or at some other interval. So predicting an outsized wage increase for group dancers in only 2019 was wrong because it is for the term of the contract.

As for how the union reported this as an “outsized” gain for group dancers, that is only the case if you ignore that groups of three to five dancers did not get this “outsized” gain — they merely got the 6% increase in rates. All other dancers in groups above five, rather than receiving a comparably lower rate than a group of three to five dancers, will now receive the same pay as those groups of three to five dancers. They truly got an outsized gain of approximately 19.7%.

So for groups with six or more dancers, they did achieve outsized gains because their percentage increase in wages was higher. But groups with three, four, or five dancers did not receive “outsized” gains — they received the blanket 6% increase. This is yet another example of SAG-AFTRA overselling its gains, much as it did around the 2017 Television/Theatrical Agreement when it said that photo-doubles would receive “an upfront increase of nearly 17%,” while in truth stand-ins who did photographic doubling did not see anywhere near such an increase. The increase was only for general background actors who did photo-doubling, and stand-ins were excepted — a topic discussed in depth on Stand-In Central here and here and on Episode 36 of The Acting Income Podcast.

Benefit Plan Contributions

Our Guess

[…] 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.

The Actuality

Pension and Health contribution rate increased from 18% to 19%, subject to a 3-year waiver that expires March 31, 2022 reducing the contribution rate for JPC authorizers to 18.5%. The breakdown of the 19% is as follows: 18% to the P&H Plans, .75% to the Industry Advancement Cooperative Fund (IACF), and .25% to the Administrative Maintenance Fund (AMF). The breakdown of the 18.5% is as follows: 17.5% to the P&H Plans, .75% to the IACF, and .25% to the AMF

How Was Our Guess?

Again, we failed to recognize that the Commercials Contract’s terms are usually for three years rather than just one year or some other interval, which influenced our guesses.

That said, in 2016, the union achieved a 1.2% increase in funding to the benefit plans. For 2019 the increase is 1%. On top of that, JPC authorizers may obtain a waiver to make a lower contribution, reflective of an increase of 0.5%.

Broken down, in 2016, the union achieved a 17.25% contribution rate to the pension and health plans. In 2019, the union achieved an 18% contribution rate (a 0.75% increase), unless you were a JPC authorizer, in which case the union bargained for a 17.5% contribution rate (a 0.25% increase).

While we don’t see the conditionality of wage increases upon pension and health plan funding as we expected, the funding of these plans is conditioned on SAG-AFTRA offering a waiver in the contribution rate to permit JPC authorizers to fund the plans at a lesser rate. It’s not clear whether that waiver is offered gratis or if a JPC authorizer has to apply for it. In other words, it’s not clear if the waiver and its giveaway of benefit plan funding is conditional or automatic for JPC authorizers.

If the waiver is conditional, SAG-AFTRA is protecting its benefit plans in a way. If it’s automatic, SAG-AFTRA gave away funding of the benefit plans to JPC authorizers.

Alternative Compensation Model

Our Guess

[The] “alternative compensation model” will rid of residuals for some commercials and replace them with buyouts for some commercials.

The Actuality

[…] For each commercial, Producer shall have the option to apply either the main Contract or one of the three upfront use packages described below. […]

which are given the titles of:

• Upfront Use Plus (Full Bundle Option)
• Upfront Use Flex (A La Carte Option
• Upfront Use Digital (Made for Digital Bundle Option)

Each of these is an upfront payment for use of the commercial, and each option has its own stipulations.

How Was Our Guess?

Our guess was pretty decent. While “upfront use” payments are not textbook buyouts (which are commonly seen in non-union commercials), they are somewhat staggering payments to principal actors on union commercials after which point the presumption is that the actor will see no additional payment for residuals.

These upfront use payments are not textbook buyouts because the performer is not unconditionally bought out. Instead, there are limits on the use of the commercial, and when those limits are exceeded, the performer can receive additional compensation.

In a sense, commercial producers can predict their use of the commercial and choose the upfront use package they want to gamble on. Afforded these options, commercial producers may be able to avoid compensation “traps” in which the main Commercials Contract might ensnare a commercial producer — and comparatively undermine the promises of compensation that the main contract offers SAG-AFTRA members.

All in all, these are “basically” buyouts, if not by the book, and they are on some commercials, not all commercials. So our guess was pretty close.

Low Budget Digital Waiver

Our Guess

[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.

and

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.

The Actuality

Nothing was said of the Low Budget Digital Waiver.

How Was Our Guess?

The Low Budget Digital Waiver, which was set to expire along with the 2016 Commercials Contract, was not incorporated into the 2019 Commercials Contract, so we guessed wrong on that point.

But what then was the waiver’s status, since it had expired? In a recent email to the SAG-AFTRA New York Commercials Department about the status of the Low Budget Digital Waiver, the representative explained,

The Low Budget Digital Waiver is being extended as is for the time being.

Additionally, the representative explained,

Our committee will review the terms and make recommendations on changes. We will also confer with the JPC, but it is a promulgated agreement.

The rep also shared,

[The Commercials Contract Standing Committee] will be taking the information gathered during [the wages and working conditions process] and through the past few years to help modify, if necessary the [Low Budget Digital Waiver].

So, essentially, the Low Budget Digital Waiver has been extended for now, and its terms may change at some unknown point in the future.

This is to say the attack on the Commercials Contract’s hard-fought terms continues as we predicted, with SAG-AFTRA offering the weapon that undercuts member contract rights.

For a slightly less graphic take on this subject: If the Commercials Contract is a bathroom for SAG-AFTRA members, then the Low Budget Digital Waiver is its leaky plumbing that damages that bathroom.

What is peculiar to see is SAG-AFTRA framing this waiver as an “agreement.” While that may make some sense in that a waiver can look like a standalone agreement, a waiver is more like a part or function of the agreement it waives, not its own full-fledged agreement.

A waiver is more like an official giving up on an agreement, a white surrender flag, than an agreement in and of itself. To wit, it is not titled the “Low Budget Digital Agreement,” but the “Low Budget Digital Waiver.” An agreement is like a mountain, while a waiver is like a cave bored into the mountain. A waiver is not another mountain or a mountain in and of itself.

Furthermore, the waiver was “promulgated” (i.e., declared unilaterally), which is even more to the point that this waiver was not truly an “agreement.” Its “promulgation” suggests that there was no other party who bargained for the terms of the waiver, and there was no opposite party shaking hands upon the achievement of the agreement. The Low Budget Digital Waiver was simply declared unilaterally by SAG-AFTRA.

Is it a collectively bargained agreement, a product of one of the responsibilities of SAG-AFTRA as a labor organization? If there was no other party opposite with which to bargain, and if this was simply declared unilaterally by SAG-AFTRA, then it is arguably not a collectively bargained agreement. The waiver’s status as an “agreement” is further weakened as result.

Whatever is made of it, we were pretty close in our guess if not exactly right.

Obsequiousness to the Ad Industry

The Guess

[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.

The Actuality

SAG-AFTRA’s proposal had a section about “Waiver as to Certain Non-Professional Persons.”  In it were these two subsections that changed the 2016 Commercials Contract:

Section 8.C Live Event, Man on the Street and/or Hidden Camera Waiver no longer requires automatic reporting but Producer shall provide a copy of the spot(s) upon request by the Union

and

Add section to address consideration of waiver requests from JPC authorizers in the event of hardship (e.g., potential loss of advertiser business).

How Was Our Guess?

In short, the obsequiousness was shown to us, but not as obviously as we expected — and not as we expected!

While the first passage only apparently applies to the filming of, say, people at a concert or other live event, people in public being interviewed on the street, and those depicted in hidden camera footage, a waiver already existed in some form in the 2016 Commercials Contract allowing uncompensated filming of these types of people. That waiver expired with that contract. In the 2016 Commercials Contract, the waiver stated clearly:

This waiver shall expire on March 31, 2019 and shall not be citable or precedential in future negotiations or in the interpretation of any other provision of the [Commercials] Contract.

It is confusing to read that the above “Waiver no longer requires automatic reporting” because the 2016 contract explicitly expressed that “This waiver shall expire on March 31, 2019 and shall not be citable or precedential in future negotiations […]” By contract, the 2016 waiver should have expired and it should not have been cited in the negotiations for the 2019 contract, much less appear in it.

Even more confusing is the second passage, which adds a section (or maybe actually a subsection?) to the 2019 Commercials Contract “to address consideration of waiver requests from JPC authorizers in the event of hardship […]”

Given its position in SAG-AFTRA’s booklet, this language seems as if it only applies when it comes to filming non-professional persons (read: non-actors) like those mentioned above, plus advertiser employees, executive officers, and people who give testimonials. Presumably, it is not a waiver for whenever a JPC authorizer experiences the threat of loss of business because it’s a Commercials Contract signatory. Right? Because that would be another reason to weaken the Commercials Contract for SAG-AFTRA members. And the union wouldn’t allow that, right??

We don’t know for sure.

The second passage seems to be saying that waivers (of this waiver? of the Commercials Contract in general?) will be considered for JPC authorizers if they stand to lose advertiser business around compensation for non-professional persons. Of note, they don’t have to lose advertiser business, but need only “potentially” lose advertiser business.

Honestly, we don’t completely understand what SAG-AFTRA is trying to say here without its providing a memorandum of agreement (which shows exactly how the contract language will be modified), so it’s hard to understand what this second passage is saying other than what we guessed we’d see: SAG-AFTRA’s obsequiousness to the ad industry by being willing to cut signatories slack and thereby undermine members’ contractually established rights.

Brian Murphy, a partner at the law firm of Frankfurt Kurnit Klein & Selz, expressed similar confusion in a recent blog post about the 2019 Commercials Contract.  He wrote:

[A] new “hardship” waiver has been added to the menu that allows JPC authorizers (but not direct signatories […]) to request waivers “in the event of a hardship (e.g., a potential loss of advertiser business by an authorizer agency).” Clearly, this provision was added as part of the JPC’s and the union’s efforts to provide relief to signatory agencies who fear losing business to non-signatory agencies. What will the union accept as a “hardship”? What proof will the agency have to furnish? Will the waiver be granted on a production-by-production basis, or will an agency be able to get a blanket waiver that will apply across the board to all productions for a particular “hardship” client? Will the waiver be complete, or will there be some caveats? The contours of this waiver will be revealed with time.

Darn tootin’ about the contours. Those are some major questions that should send shivers down the spines of SAG-AFTRA members, who might find that the 2019 Commercials Contract they voted yes on gets waived because an ad agency squawked about loss of business because of its obligation to pay out per the still complex Commercials Contract.

But then again, that’s on those SAG-AFTRA members who voted yes for that very thing for “potentially” hardshipped JPC authorizers to plead.

(Murphy also wrote a part one to the above blog post, covering the Alternative Compensation Structure, which is a great read.)

“An Unexpected Revelation”

But an unexpected revelation of SAG-AFTRA’s subservience to the ad industry is not in the 2019 Commercials Contract but in a recent podcast episode of Audrey Helps Actors.

The episode is great for what information it reveals about SAG-AFTRA’s particular process of collective bargaining, which starts around the 24:05 mark. But it’s also great for what is reveals about SAG-AFTRA’s approach to negotiating with the JPC.

The meaty part about SAG-AFTRA’s negotiating mindset starts at the 26:55 mark. Guest and SAG-AFTRA member Katie Von Till, who contributed in a meaningful way to the development of the 2019 Commercials Contract, explains:

We want to bring in our packet that we give to our bargaining partners — I want us to stop calling them “the other side” because they are literally “our bargaining partners,” particularly now for the first time ever. It’s a different dynamic.

There is repeated emphasis throughout the episode that the JPC — aka “the other side” of the bargaining table — are “bargaining partners.” That perception of the JPC is further underscored at the 27:42 mark:

Katie Wallack (Guest): For clarification, we have staff members who are attorneys who are our lead negotiators. They are in the room with —

Katie Von Till: — our bargaining partners —

Wallack: Members who are on the negotiating committee — We don’t go in, with …

Audrey Moore (Host): What do you want me to call them?

Von Till: “Our bargaining partners.”

Wallack: “Our bargaining partners.” We don’t go in with our bargaining partners and say, “This is what we really want!” We leave that to the experts to do. We communicate with our experts, the negotiators, what we want, and then they go in and deal with the strategy.

Bargaining is structurally a process that aims to reach wins for all parties and an agreement that binds those wins.

That said, the parties involved in bargaining are not required to take on a mindset or personality that they are “partners” with their opponent. Bargaining does not need to be so overtly cooperative or friendly; bargaining can also be overtly competitive and unfriendly and still be effective.

In a more competitive bargaining approach, the ends may still be wins for all parties, and more meaningful and pronounced at that. Thomas Schelling in his important book The Strategy of Conflict provides numerous examples of effective bargaining, especially of the more hostile sort, including “limited war.”

That said, a more cooperative mindset in negotiation (as suggested by Von Till and Wallack) may be sign of relative weakness at the bargaining table. Notably, SAG-AFTRA did not enter negotiations with a strike authorization from SAG-AFTRA members, which would have shown the JPC that if SAG-AFTRA didn’t like the terms the JPC was offering, it had members’ blessing to strike and subsequently disrupt the advertising industry and commercial production.

Arguably, given all of the hurt actors apparently have been feeling through a loss of commercial union acting jobs, and given a reported inability to “feed their families” according to actor and Farmer’s Insurance commercial mascot J. K. Simmons, if SAG-AFTRA asked its members for a strike authorization and SAG-AFTRA members rejected such a request, SAG-AFTRA’s weakness at the bargaining table would be revealed, and the JPC would be better able to leverage SAG-AFTRA — competitively, little doubt — at the bargaining table.

So, having a cooperative mindset and seeing the JPC as “bargaining partners” is a surprise example of SAG-AFTRA’s obsequiousness at the bargaining table. We guessed this would only be revealed in the 2019 Commercials Contract!

Stay Tuned!

Next week we will continue comparing our guesses with the actuality in the second part of this two-part post. Subscribe to get emailed when the post is published.

Thoughts? Corrections? Post your responses in the comments section below!