Orgs pick Hamilton for study
Report will examine compensation models
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Thursday's joint union-industry announcement came a full eight months after SAG and AFTRA approved the study as part of a two-year extension of the commercials contract. And it also spelled out for the first time that there's an understanding between the two sides that the study's purpose is not to reduce pay for performers.
The study will examine compensation models for commercials appearing on TV, radio and the Internet, as well as other delivery platforms.
The findings will be considered during negotiations for a new contract to replace the extension agreement, which expires in October 2008. Work on the study began Wednesday and is expected to be completed in October.
Booz Allen Hamilton was selected from among nine consulting companies.
The ad biz had pushed hard for the study before persuading leaders of the unions to agree over a year ago. SAG and AFTRA, which struck for six months, reached the outlines of a deal nearly a year ago, then persuaded members to formally OK the extension with 96% backing.
SAG generates some 90% of the work under the ad pact, with annual earnings subject to pension and health contributions of about $750 million. The extension included a 6% increase in minimum rates and an increase in employers' contribution to pension and health plans from 14.3% to 14.8%; advertisers were granted "more flexibility" to edit commercials for the Internet and new media.
Extending the contract also preserved the current model of paying actors for primetime TV ads via residuals. The ad industry had been floating the idea last year of replacing residuals with a $19,000 buyout that would cover a year.
SAG and AFTRA struck against the ad industry for six months in 2000 in a strategy that remains bitterly debated within the unions. They gained big hikes in cable rates; the strike stopped only after the industry dropped its demand that network TV residuals be replaced by buyouts and SAG gave up its demand for residuals in cable rather than buyouts.
