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SAG-AFTRA, Production Companies Reach Three-Year Deal

Variety logo Variety 7/4/2017 Dave McNary
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SAG-AFTRA and Hollywood’s production companies have reached a tentative deal on a new three-year master contract for union performers — averting a strike.

The deal was concluded at 6 a.m. and announced at 6:40 a.m Tuesday morning following a month of bargaining at the headquarters of the Alliance of Motion Picture and Television Producers in Sherman Oaks, Calif.

Both sides had agreed on the previous three consecutive nights — starting with Friday, June 30 — to negotiate past the expiration of the current three-year deal. That held off SAG-AFTRA from moving towards a strike authorization vote by union members.

SAG-AFTRA said on June 25 that it would seek a strike authorization if it could not reach a deal by June 30. But it gave no timetable for doing so, and the back-to-back-to-back extensions indicated that negotiators were moving closer to agreement in key areas such as travel allowances and compensation for high-budget productions for streaming services.

The current scenario is similar to that in 2014, when SAG-AFTRA and the AMPTP agreed to three consecutive 24-hour extensions after the contract expired before announcing an agreement in the early hours of July 4. 

David White, who has been national exec director of the union since it was formed five years ago, led negotiations for SAG-AFTRA. AMPTP President Carol Lombardini was the head negotiatior for the companies.

Hollywood has been on high alert about a possible strike in the wake of the SAG-AFTRA national board voting unanimously on June 25 to seek a strike authorization from its membership unless a deal was reached by the expiration of the current contract. The leaders said at that point that the AMPTP had been pushing for “outrageous rollbacks” in the negotiations — but never disclosed what the specifics were.

SAG-AFTRA president and negotiating committee chair Gabrielle Carteris said, “This is a forward-looking package with meaningful gains across our entire membership. Working with our terrific negotiating committee and staff, we achieved significant improvements in streaming new media compensation. We also established comprehensive travel guidelines to eliminate ambiguity and provide a seasonal fee schedule for location series work.

The new deal, if ratified, provides for $256 million in increased pay over the three years with minimums increasing by 2.5% in the first year, 3% in the second year, and 3% in the third year. Employers will also provide a 0.5% hike in contributions paid to the SAG pension plan and AFTRA retirement fund in the first year of the agreement.

The union said Tuesday that the tentative deal includes “significant improvements” in the residuals rate for streaming platforms like Netflix and Amazon. Actors will receive residuals after 90 days instead of after one year. The new formula delivers a 300% increase in residuals within their first two years when their work is exhibited worldwide on Netflix.

SAG-AFTRA also gained a five-fold increase in travel allowances for TV series performers who work at locations away from home. The deal also reduces the amount of time in which TV series actors can be held off the market.

The contract covers work by SAG-AFTRA members in primetime television and feature films and generates more than $1 billion in annual compensation. The union has about 160,000 members.

The Writers Guild of America reached a three-year deal on its master contract with the AMPTP on May 1, less than an hour before the guild’s contract expired. The WGA already had a strike authorization with 96% support from members two weeks earlier.

The WGA’s deal included provisions to ensure the solvency of the health plan, a new formula for increasing compensation for writers on short seasons, expansion of the limitations on options and exclusivity, increased residuals for made-for-pay TV programs and programs made for high budget subscription video on demand, and, for the first time ever in a WGA contract, a provision guaranteeing parental leave.

The WGA achieved significant changes in the compensation structure for short-order TV series, forcing the studios to recognize the financial strain for TV writers as the industry norm has shifted to shows with six-13 episodes per season rather than the broadcast norm of 22-24.

SAG-AFTRA has been on strike since Oct. 21 against 11 video game companies over the work performed by voice actors.

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