SAG's internal saga

Board battle near as organizational issues loom

By DAVE MCNARY

Already facing critical decisions as to the hiring a new chief executive and whether to call a potentially devastating strike, the Screen Actors Guild may also have to endure a serious boardroom battle in coming months over how the union operates.

The guild's board of directors will have to decide whether to act on a myriad of troubling issues and sweeping recommendations contained in an 8-month-old confidential report by the Towers Perrin consulting firm.

Towers Perrin's assessment of SAG's operations was summed up in two words: "organizational chaos."

In page after page of the two-inch-thick document, Towers Perrin paints a relentlessly unflattering picture of the world's best-known performers' union in making its case for transforming the guild into a better-run operation.

"SAG lacks a clear shared mission and strategy, which is the foundation of an effective organization," Towers Perrin declared in the report. "There is no link between SAG's strategy and the work performed."

Board members affiliated with the Performers Alliance, which backed William Daniels in his successful 1999 campaign for SAG president, have been the main proponents of implementing the Towers Perrin reforms, including closing more than 20 SAG branch offices and cutting the size of the board from 105 to 40.

Consideration of the reforms was first delayed by the six-month strike against advertisers and then by significant resistance within the board room.

The report -- which has never been made public -- was delivered a few days after the start of the strike by SAG and the American Federation of Television & Radio Artists.

Since then, many SAG board and rank-and-file members have claimed that working on the strike helped forge a sense of unity within the union that had been lacking.

Supporters of Daniels contend that, over the past year, SAG has become more open and less micro-managed, and that meetings have become considerably more civil.

Ring of truth

But SAG insiders concede that many of the stinging Towers Perrin criticisms remain valid.

"What you've got is an organization that operates hand to mouth, like most actors, which is the reality of this profession," one said. "We have to take Towers Perrin seriously if we are to survive as a viable union."

The report has its roots in the SAG board's mid-1999 decision to ask members to approve the first dues increase in 13 years. Performers Alliance members successfully argued at that point that the guild should seek an outside assessment of its operations.

What SAG got for the money it paid to Towers Perrin (estimated by board members at over $500,000) was a blistering assessment of how the union, which operates with about 450 employees and an annual $50 million budget, was being run in early 2000.

After extensive interviews and surveys, Towers Perrin offered the following conclusions:

• "A leadership void exists. There are power struggles between various member factions, board and officers, staff and board, staff and officers and staff and staff."

• "SAG leadership does not have sufficient business and financial acumen."

• "Staff members report that clear direction has been lacking for many years and that its absence has resulted in much frustration and low morale."

• "The current atmosphere is dominated by political infighting and a lack of trust."

• "Financial information is not available by location, department, program or service."

• "The processing of residuals checks is performed manually, causing, on average, an eight-week delay in the receipt of checks."

• "The current branch structure is unwieldy and costly."

• Cost of serving members rose from $292 per member in 1995 to $364 in 1999.

• "There is no clear picture of SAG's current and future financial position. SAG has no financial plan and no timely financial reporting."

• "Expenses are increasing faster than revenues and cash is decreasing; however, the board has not pushed for significant cost containment initiatives other than the dues increase."

Some hesitant

Despite these alarms, it's uncertain whether SAG's board will follow through: Some directors have shown considerable reluctance to air out anything about Towers Perrin.

SAG's Eastern regional board voted 28-1 in late November to bar any guild officer or staffer from commenting on the report. The Western regional board met Dec. 11 for more than five hours but did not vote on the matter.

Why would SAG's leaders fail to address these issues? The key reason is that they are already facing major headaches on several other fronts.

The biggest distraction is the mounting pressure to get to the bargaining table to avert a strike after the film-TV contract expires June 30.

In addition, SAG's talent agency rules expired in October, triggering a 15-month termination period and uncertainty over the union's relationship with agents.

And SAG faces a vacuum in its executive suites with longtime national chief exec Ken Orsatti retiring Jan 15; associate national chief exec John McGuire having said he wants a less time-consuming job; and Hollywood branch chief exec Leonard Chassman retiring in August.

Since the report was completed, most of the attention within SAG has been directed toward a proposal that calls for SAG's 28 branches to be consolidated into six regional offices as a cost-saving measure. Members served by the closed offices would be redirected to the regional sites.

The union's branches have mounted a serious effort to keep the brick-and-mortar offices open -- a move Towers Perrin forecast in the report: "Inertia and reliance on the 'old way of doing things' might inhibit change and cause some staff members to balk at the new structure."

The report also notes that more than half of the SAG branches are joint AFTRA offices in which AFTRA administers the SAG contract; Towers Perrin points out that the 1999 collapse of the SAG-AFTRA merger means that such an arrangement is no longer strategically valid.

"SAG outsources much of its most important relationship -- its delivery of services to members -- in 15 of its 28 locations," it noted.

Towers Perrin also proposed implementing an organizational structure that will result in productivity increases of up to 25%, labor expense reductions of up to $6.6 million annually and related expense cuts of up to $2 million.

The report contains only brief mentions of SAG's positive side, such as a back-handed compliment in its evaluation of the union's strategic planning and research capability.

"SAG does not have a knowledge management system for the dissemination of information of strategic importance," Towers Perrin said. "Fortunately, SAG has a number of highly committed staff members, elected leaders and members who work in a Herculean manner to cope with these issues."