SAG, majors play beat the clock

Studios make their 'final' offer

By DAVE MCNARY

With SAG's feature-primetime contract expiring, the majors turned up the pressure Monday by making the guild a last, best and final offer.

The offer -- which mirrors the terms of the majors' previous deals with the DGA, WGA and AFTRA -- includes increases valued at more than $250 million over the three-year term of the deal.

But SAG complained that the proposal is deeply flawed and set up a meeting Wednesday with the congloms to go over details of the 43-page offer.

The "final offer" move -- a tactic never used during the WGA strike -- came Monday afternoon in the 42nd day of negotiations following five weeks of highly unproductive talks.

The moguls said they won't lock out SAG while the guild toppers ponder the deal.

"As SAG's leadership considers our final offer, we will continue for now to work under the terms of the old contract as current productions wind down," the AMPTP said.

The offer from the Alliance of Motion Picture & Television Producers mirrors the terms of the majors' previous deals with other guilds. SAG has proclaimed repeatedly that such a deal is unacceptable and has campaigned avidly against ratification of the AFTRA deal.

"This offer does not appear to address some key issues important to actors," said SAG national exec director Doug Allen. "For example, the impact of foregoing residuals for all made-for-new-media productions is incalculable and would mean the beginning of the end of residuals."

Monday's announcement marks the end of SAG-AMPTP negotiations -- though both sides could return to the bargaining table to close out the final deal points.

SAG wouldn't answer an inquiry Monday about when it will officially respond to the AMPTP's offer. But the guild is likely to wait to do so until next Tuesday, when AFTRA announces results of voting on its deal -- which will serve as a strong indication of whether the 44,000 SAG members who belong to AFTRA are willing to strike.

The AFTRA deal is expected to be ratified, but if it's defeated, SAG would likely spurn the AMPTP offer and take a strike authorization vote. The AMPTP warned SAG not to hope that negotiations can be extended any further.

"We hope that SAG's Hollywood leadership will not make the tragic mistake of misleading their members by suggesting that additional stalling will lead to a better offer at a later time," the group said. "We have compromised again and again this year to reach four major labor agreements -- agreements that satisfied the DGA, WGA and AFTRA -- and we have now reached the end of this process."

If SAG turns down the AMPTP deal, the companies can then impose its terms and conditions, although doing so runs the risk of inflaming SAG's membership.

Monday's announcement represented a small measure of progress in that the majors finally offered SAG the same terms as they did AFTRA. That they hadn't done so previously, Allen complained last week, was the reason for the stalemate.

But the AMPTP's disclosure of its offer -- and the tone of its announcement -- signaled that the congloms are running out of patience with what they perceive as SAG's intransigence at the bargaining table.

"Our industry is now in a de facto strike, with film production virtually shut down and television production now seriously threatened," the AMPTP said. "In an effort to put everyone back to work, the AMPTP today presented SAG our final offer -- a comprehensive proposal worth more than $250 million in additional compensation to SAG members, with significant economic gains and groundbreaking new-media rights for all performers."

The AMPTP also said that if SAG doesn't make a deal, SAG members will lose $2.5 million each day in wages while other guilds and unions would lose $13.5 million each day and the California economy will be harmed at the rate of $23 million each day.

SAG's deal expired at 12:01 a.m. The passage of that deadline means the contract's no-strike, no-lockout provisions are no longer in effect, but SAG's been asserting that it hasn't taken any steps toward a strike authorization vote -- a move that would take about three weeks to complete and require 75% approval.

The companies are also unlikely to take the step of locking out actors -- a move that would be largely symbolic since most production has stopped or is nearly completed due to the uncertainty over SAG's willingness to make a deal.

The majors have repeatedly accused SAG of foot-dragging so their leaders can fight the ratification of AFTRA's primetime deal. In the announcement Monday, the AMPTP reiterated those accusations and noted that it had started the SAG talks in mid-April with eight proposals designed to reach a quick agreement.

"Unfortunately, SAG came in with 36 proposals -- including several true dealbreakers -- and thus put itself in the position of having to work harder to find common ground," the AMPTP said. "While we have made some progress, SAG continues to hold to several of these unacceptable proposals, including increases in DVD residuals, restrictions on product integration and excessive increases in money and schedule breaks, stand-in minimums and mileage increases."

The majors said that SAG is seeking to undermine the new-media framework for the DGA, WGA and AFTRA deals and still seeking exclusive jurisdiction in content made for the Internet -- even though AFTRA's new deal includes shared jurisdiction.

Meanwhile, SAG advised its members Monday that they should keep working after the expiration.

"All members should continue to report to work and to audition for new work past the expiration date until further notice from the guild," SAG said. "Such work will be covered under the terms of the expired television and theatrical agreements."

It's believed that the majors would be most willing to concede in two actor-specific areas for the sake of closing the SAG deal -- maintaining force majeure protections, which would involving settling claims for payments when TV shows went dark during the WGA strike, and including language giving thesps some control over product placement.

Studios and nets have been pressuring SAG by publicly highlighting the financial damage from the production slowdown and the 100-day WGA strike. That effort has included making use of the recent Milken Institute study showing that the writers strike will cost California $2.3 billion in lost wages this year and 37,000 jobs.

In the meantime, AFTRA's trumpeting gains in its deal on minimums, pension and health and new media along with preservation of clip consent and maintaining that a no vote is equivalent to a strike authorization. SAG has that turning down the AFTRA deal will mean AFTRA and SAG would go back to the table -- despite AFTRA's denials that it will jointly negotiate with SAG.

Both unions have been aggressively campaigning for support from the 70,000 AFTRA members. AFTRA's stressing the financial issues such as in recent emails titled "It's not about politics -- it's about your paycheck. Don't be suckered into a strike."

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http://www.variety.com/article/VR1117988306.html

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