Message To The Companies Represented By The AMPTP In The 2008 SAG Negotiations

The AMPTP has been negotiating with SAG for a total of 28 days since April 15, 2008.  We are frustrated and discouraged that on June 12, with 18 days left in the month, SAG's Hollywood leadership is already saying that it’s unlikely a deal will be made by June 30th. We hope that this statement does not signal the intention of SAG's Hollywood leaders to bring our industry to a halt. We remain committed to working as hard as we can to reach our fifth labor agreement of 2008 by June 30th.

To date, our SAG negotiations have been unsuccessful for three reasons:

• First, while we have made some progress with SAG, we are still far apart on fundamental issues.  Since resuming these talks on May 28th, we have continued to provide additional information to SAG on subjects that have already been comprehensively discussed throughout these negotiations.  We remain committed to making a fair and reasonable agreement before the June 30th deadline and are pushing ahead despite the rallies, meetings and events to which SAG’s Hollywood leadership has recently devoted considerable time and energy (often during hours that are usually reserved for negotiations).  Unfortunately, these side-shows -- distractions which SAG’s Hollywood leaders appear committed to perpetuating – will not help our industry reach our fifth 2008 labor agreement by June 30th.  We hope that SAG will focus on making a deal with us rather than diverting its energies to interfering with the affairs of a fellow union.

• Second, although SAG has said that it was willing to work within the industry’s now well-established new media framework, inside the negotiating room SAG’s Hollywood leaders have continued to propose many changes to the framework -- some of which would go a long way toward making the framework itself unworkable. The Producers’ position has been that there is no valid reason to upend the new media framework that has already been accepted during four other separate negotiations this year.  

• Third, SAG’s Hollywood leadership has continued to demand increases in traditional media compensation that would result in enormous additional financial burdens.  The SAG Basic and TV Agreements are mature labor pacts for mature businesses. In such circumstances employers in other industries typically negotiate reductions and efficiencies to reduce costs.  We are not seeking to do this, and have instead proposed fair and reasonable economic increases that have already led to agreements in 2008 with DGA, WGA, AFTRA Network Code, and AFTRA Exhibit A. 

In short, the AMPTP remains committed to avoiding another harmful, unnecessary strike and to reaching another equitable and forward-looking labor agreements – just as we have done four other times already in 2008.

The recent and highly public complaints of SAG’s Hollywood leaders about the negotiating process are, to say the least, perplexing.  On February 14, 2008, immediately after a deal was struck with the WGA, ending its strike, AMPTP invited SAG to begin early contract talks.  Two weeks later, on February 28, 2008, SAG’s leadership said it would not be ready to begin formal negotiations until sometime after March 31st.  SAG’s Hollywood leadership has long advocated a preference for last-minute bargaining and, as such, there are no grounds for them to complain that they are now the last Guild at the table.  If SAG’s strategy of eleventh-hour negotiations has backfired, it was a risk the Hollywood leadership knew it was running.

Furthermore, any effort by SAG to drag out these negotiations past June 30th would be a disservice to the people in this industry whose livelihoods are being put on hold.  SAG’s inability to close this deal has already put the industry into another de facto strike, limiting the greenlighting of features and disrupting pilot production.  Unfortunately, SAG’s Hollywood leadership and its allies continue to express a cavalier attitude about the consequences of a potential strike for below-the-line workers, SAG’s own members and its sister Guilds in particular and our economy in general.  As the recent Milken Institute study noted, the WGA strike caused a $2.3 billion decline in wages and salaries, the loss of 37,700 jobs, and helped push California into a recession.

People throughout our industry were astonished to hear a SAG board member at SAG’s anti-AFTRA rally publicly compare the economic situation of actors with the situation faced by workers who seek day jobs by standing in front of Home Depot stores.  This careless statement, of course, flies in the face of basic facts about actors who work in our industry:

• The Producers increased minimum payments in the labor agreements recently reached in the WGA, DGA, AFTRA Network Code, and AFTRA Exhibit A negotiations.  These minimums increased more than the average annual rate of inflation over the last 17 years (since 1991).  The lowest paid actor is currently guaranteed a minimum of $759 for an 8-hour day and double time of $190 an hour after 10 hours – and annual increases of these rates are on the table.
  
  
• SAG members – even ones that do not work regularly – receive pension and health benefits that would be the envy of middle class Americans.  For example, SAG members need only earn $28,120 per year to qualify for the top tier Health Plan I.  By SAG’s estimate, that can be accomplished with less than two months of work.  Health Plan II requires only $13,790 to qualify.
  
  
• Overall earnings for actors are increasing:
  
  
• Theatrical earnings and residuals rose to $596,437,362 last year, up 6% last year over 2006 and up 24% since 2003.
  
  
• Television earnings and residuals rose to $705,032,281 last year, up 1.2% over 2006 – notwithstanding lost earnings due to the WGA strike - and 9% since 2003.   
  
  
• And even these figures understate the overall compensation increases because the figures are capped for reporting purposes to the Screen Actors Guild – Producers Pension and Health Plans and thus do not reflect total actor earnings from overscale deals, participations, and so forth.
  
  
• Within the entertainment industry itself, cast costs rose at more than twice the rate of overall production costs between the 2000-01 television season and the 2007-08 season (using one network as an example).  Total cast costs rose 78.4% during this period.  The cost for principal cast members rose 80.1%, and the cost for non-series regulars rose 69% -- compared to a 33.6% increase in overall production costs.