Considering that we’re living in the “Platinum Age of Video Production,” the pending SAG/AFTRA contract is an insultingly bad deal for rank-and-file Guild members. Before I get into specifics, I want to make it clear that I do not have a dog in this hunt. I have no SAG/AFTRA political aspirations of any kind. And, most importantly, I am not endorsing any candidate for any position. I simply see this as an opportunity to remind my Guild-member friends and colleagues that if you ask the wrong questions, you’re going to get the wrong answers.
I’ve been a card-carrying member of the Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA), which have now merged into a combined entity called SAG/AFTRA, and of the Association of Federated Musicians (AFM) for more than 47 years. I’ve been a producer for 38 of them, so I’ve spent most of my career on both sides (union member and producer) of the negotiating table. This has given me a unique vantage point from which to evaluate union contracts.
In all the years I’ve been in business, I have never seen a deal that demonstrated greater ignorance of the present (and the near-term future) than the deal recently presented to the SAG/AFTRA rank-and-file membership for ratification. While the negotiated concessions and givebacks are costly and unfortunate, they pale in comparison to the near-term future conditions the document fails to address.
The Easy Stuff
More Money – Inflation is real. Don’t take my word for it. Ask an accountant, a finance person, a tax lawyer, an economist, or anyone else who knows anything about the value of money. The annual rate of inflation has been approximately 2.5 percent for the past 10 years (this number is hotly debated; choose one you like for this calculation). A 2.5 percent annual increase in wages is equal to a zero percent increase in future spending power. So the proposed increase (more money) must be discounted by the rate of inflation. Do the math, then decide how good the “more money” part of the contract is.
Residuals for Cable (Basic and Premium) – Cable TV work is estimated to be between 45 and 50 percent of all Guild work. Why isn’t this the primary focus of the contract? “Cable is dead,” you say. No, it isn’t. It’s a $56 billion industry in transition. Guild members deserve a fair share of the revenue derived from their talents.
Producer’s Base vs. Location – We will no longer be “on location”; we will be at the “Producer’s Base.” This is just wrong. This provision will cost members thousands of dollars in travel reimbursement. If a producer requires a Guild member to travel (not commute, travel) to work, why shouldn’t the producer pay for travel and the related expenses? In the “gig economy,” travel is a legitimate expense. Guild members practically invented the gig economy.
Promotional Uses – So many revenue-generating restrictions for promotional uses have been relaxed and given back, it’s hard to read the proposed provisions without throwing a temper tantrum!
Timing on Reduced Residuals – As shows move off their original platforms, content owners will now be able to enjoy an instant reduction in financial liabilities in the form of incredibly reduced residual payments. In some cases, union members will see checks for coffee money where they used to see checks for car payments. It is one of the most short-sighted givebacks in this package, and it is truly offensive.
Important Short-Term Stuff
Member Benefits of a Data-Driven SAG/AFTRA – Why aren’t we negotiating for access to the data the Guild needs to do its job? Could it be that the Guild leadership doesn’t know what to ask for?
A data-driven SAG/AFTRA would empower the membership to better compete. The world is now 100 percent digital – from production through distribution through accounting. Everything is available digitally – but not to the rank-and-file Guild members.
SAG/AFTRA should be building internal systems to aggregate all of the disparate data sets that describe Guild members’ lives and turning that data into actionable information. It is an expensive process, but it is necessary to give Guild members the tools they need to adapt to the relentless, accelerating pace of technological change.
While we’re speaking about data, SAG/AFTRA should have a database that offers permissions-based access allowing for the creation of best practices applications and user interfaces (including a world-class mobile-web interface). The current public-facing online tools are exceptionally poor.
Data Rich vs. Data Poor – SAG/AFTRA is a data-poor company trying to negotiate with data-rich companies (Facebook, Google/YouTube, Amazon, HBO Go, Hulu, Vudu, Comcast, Verizon, etc.). Considering what the Guild doesn’t know, it’s a wonder it is able to make any progress at all.
Access vs. Ownership – Netflix, Amazon, Hulu, Vudu, HBO Go, Spotify, Pandora – access is replacing ownership. We need our fair share of the multibillion-dollar access-to-content industry. There are no more borders; there is no longer a “usual and customary boundary” to a market. You can attempt to geo-fence an IP address, but that doesn’t mean much in 2017.
Emerging Technology – The opportunities that become available to us will depend on how well we can learn to leverage and profit from emerging technology: Streaming, Virtual Reality (VR), Augmented Reality (AR), Mixed Reality (MR), Virtual Actors, Virtual Voice-Overs, AI-based or AI-created Entertainment, other Over the Top Usages, and technologies we haven’t thought of or invented yet. Was your voice modeled for a multibillion-dollar videogame? Are you the prototype for a virtual character? Are you the replacement face for the hostess at a hot nightclub when a patron enters wearing a pair of augmented reality glasses? Will club-goers hear your voice when the virtual hostess speaks? Will these (or other AR techniques) be used in movie theaters? Does the movie that’s being re-created in a high school auditorium include half student and half Guild performers? If you think this is science fiction, trust me, it’s not. All of the technology mentioned above is in the works right now. What’s the Guild doing about it?
Royalties – Who actually owes royalties? Is there a machine-learning-based, computer vision, pattern recognition tool set that can face-recognize or voice-recognize you and report usage? Yes. Is the union forcing content owners and distributors to cover the cost of these tools to ensure royalties are fairly paid in a world of infinite distribution channels? If not, why not?
Important Long-Term Future Stuff
Like every pension plan, the SAG/AFTRA pension plan struggles to maintain safe funding levels. The population of workers is aging as baby boomers retire. The number of young union and guild members is not trending upward. Again, these problems are not specific to SAG/AFTRA, but the potential problems in the long-term future are clear. What role will the producers play in shoring up funding levels? Yes, there’s a small increase in pension contributions offered in this contract. Is it enough? Ask your favorite actuary.
I hope that the SAG/AFTRA rank and file will reject this contract. I’m voting no. And I hope you will contact our leadership and tell them how you feel. You may not agree with my analysis of the contract as presented for ratification. You may not agree with my vision of the future or some of my theses. If you don’t, I’d love to hear from you. I’ll be happy to engage in any productive, respectful dialogue.
SAG/AFTRA members are a unique, talented, amazing group of professionals. The producers simply cannot make world-class content without us. It’s not because any one of us is irreplaceable or indispensable; that’s nonsense. It’s because we, collectively, are the very best people who do what we do. They can easily replace one of us, but they can never replace all of us! Please vote no and ask SAG/AFTRA to go back to the collective bargaining table and do better.