Details Of AMPTP-IATSE Tentative Deal

EXCLUSIVE: As I suspected, there seems to be unfinished biz between IATSE and the AMPTP over exactly what’s in their so-called “deal” announced November 19th for new 3-year contract. According to my sources, this is the general overview of the tentative agreement. But there’s still no Memorandum of Agreement outlining the new terms in detail. So that’s why I think it suspect that the AMPTP was so quick to announce an “agreement” with IATSE. (For example, the WGA waited until every “t” was crossed and “i” dotted to make a announcement. Smart move, considering that the AMPTP tried to slip in some last-minute terms and language that were never okayed.) So these are understandings as of November 18th:

According to my reporting,

Wage increases for the IA Basic Agreement consist of 3% effective 8/2/09; another 3% effective 8/1/10, and another 3% effective 7/31/11. For Locals 52 and 161 (NY), it’s 3%/3%/3% increases on the effective dates of those agreements.

Concerning Pension and Health:

The AMPTP believes the cost of its deal with IATSE amounts to an increase of about 3.8% a year for the next three years. But that doesn’t include a $233 million savings to employers in Health Plan “modifications” agreed to by the union.

Both sides agreed that, effective 7/31/11, the Health Plan will change the standards for continuing eligibility from a requirement of working 300 hours to 400 hours.

As for other pension and health terms, the AMPTP believes the employers agreed to increase hourly contribution rates in the agreegate by 35 cents per hour as of 8/2/08; an additional 35 cents an hour effective 8/1/10, and an additional 35 cents per hour effective on 8/1/11.

Additionally, the employers committed to pay an additional 15 cents an hour if consultants’ projections show that active reserves drop below 10 months but not earlier than 8/1/10. If that happens, then the employers will be obligated to contribute an additional 15 cents effective 7/31/11 which can go into effect earlier if the reserves dip below 6 months for active reserves and 8 months for retirees.

The employers say that, as an additional funding mechanism after those options, IATSE will “reallocate” an additional 1% from wages or their IAP.

Pension retirees will receive 13th and 14th checks for all three years.

Concerning TV Made For Basic Cable Productions:

Employers say that the union agreed to continue to grant waivers providing that for pilots and one-hour series made for basic cable, the employers can use the terms and discounts of the MOW sideletter for the first season of a series, and then start using the terms and conditions of the one-hour series sideletter.

Concerning Original Programs Made For New Media:

Employers agreed to exclusive recognition for IATSE for the geographic scope of their current agreements for entertainment programs of the type traditionally covered by their deals.

Employers agreed that derivative programs are all covered except for those produced under the IA Videotape Agreement which will be treated the same as original programs made for New Media.

Employers believe that, as for as covered programs, rates and terms are generally freely negotiable. Union security, no-strike/lockout, and grievance and arbitration provisions will apply. No mandatory staffing. Full interchange of job functions. If a person is required to work on a derivative project on the same day as a source production, they must be paid as a continuation of their regular rates and work conditions.

Unions think that covered employees may be assigned to the derivative prodution as part of the regular workday on the source production. Extended workday or overtime payments, asapplicable, would be triggered if the work extends past the contractual workday. Otherwise, terms and conditions of employment are freely negotiable.

Union thinks that in all cases pension and health contributions will be due in the normal amounts.

Union agrees that IATSE shall administer the grievance and arbitration of the New Media provisions and to remove the Step 2 provisions of the basic agreement grievance and arbitration procedure.

The union understands that original productions will be covered if the cost of production is over either $15,000 per minute as exhibite, or $300,000 per single production, or $500,000 for a series order.

The employers claim there’s no coverage for experimental programs the same as under the DGA/WGA/and AFTRA agreements unless they have 4 or more employees on the West Coast Industry Experience Roster. Unions say that, in the case of local unions with no Roster, or where the Roster does not apply, original productions will be covered if said employees who’ve worked 30 or more days under any motion picture agreement. (Companies say employees for 30 days over 3 years under terms of those agreements.) Union thinks that, for those productions that don’t otherwise trigger the agreement, the employer may utilize the agreement for experimental productions upon written notification at least two weeks prior to commencing the given production.

Employers think there are certain limited coverage exclusions for persons who are not specifically charged to overhead who work on the projects, and union believes the following classifications are excluded for purpoises of triggering the application of the agreement: (story analysts, projectionists, in-house publicists [not unit publicists], post-production with the exception of the Editor and Assistant Editor).

On the issue of union security, union believes that an employee employed on a New Media production shall become and remain in good standing of IATSE and the appropriate Local on and after the 30th day of covered work following thefirst day of employment or the effective date of such respectie agreements between companies and the several Unions, which is later. The forgoing requirements of Union membership as a condition of employment shall be subject to the obligations of the parties under the law. All other provisions of Union Security Provisions of applicable agreements shall be extende to New Media. Qualified status on the CSATF Industry Experience Roster wshall not be a condition of employmnt. Covered employees shall receive credit for Roster placement for days worked on New Media production.

Employers think they reached an understanding with IATSE on contracting out of programs.

Concerning Re-use of Programs Transmitted In New Media:

Employers agreed to pay residuals at 5.4% for derivative and original New Media programs when released originally on a consumer free ad-supported platform and then subsequently on a consumer pay platform for Electronic Sell-Through or download to rent (ITunes, Movie-Link, etc) after a 26-week period.

Employers agreed to pay if New Media programs are released on traditional media platforms (basic cable, pay TV, home video) under the normal rules for making Supplemental Markets payments.

Employers agreed that for Electronic Sell-Through and download to own, companies will pay 8.1% of 20% of producers gross for first 50,000 units sold, and 14.625% on sales thereafter, if a theaterical program is released after 8/1/09. If it’s a TV program released after 8/1/09 for sale, companies will pay 8.1% of 100,000 units sold and then 15.75% for all sales thereafter. It’s unclear if the unions have agreed to these terms or not.

Employers say IATSE (but not the Motion Picture Industry Pensions and Health Plans also which unions initially wanted) will have the same inspection rights on the contract’s New Media license agreements that was given to the other unions. Union believes it’s all un-redacted copies of all license, distribution, and other agreements pertaining to New Media exploitation on a quarterly basis. Union also believes the payments will be accompanied by detailed information as to the medium and source generating the receipts, as well as unredacted copies of all corollary distributor-, sub-distributor-, and exhibitor statements. Union believes in addition that each employer upon request will provide IATSE with data in its possession or the possession of its related and affiliated entites regarding the New Media exploitation of covered pictures, such as number of downloads or streams by source and ad rates.

Union refers to “Sideletter to Interim Agreement Regarding Re-Use In New Media”.

Employers say there’s a “Sunset” Clause for all of the New Media deal. The union says this about the “Sunset” clause: that both particies recognize that these provisions are being negotiated at a time when the business models and patterns of usage of motion pictures and other productions in New Media ae in the process of exploration, experimentation and innovation. Therefore, all the provisions relating to New Media expire on the termination date of the Basic Agreement and will be of no force and effect thereafter. No later than 60 days before that expiration date, the parties will meet to negotiate new terms and conditions in New Media.

The union also believes the parties’ negotiation for the successor agreements will be based on the conditions that exist and reasonably can be forecast at that time. For example, with respect to the formula for the electronic sell-through of motion pictures and television programs, the growth of electronic sell-through could adversely impact traditional home video sales. In future negotiations, the parties agree that the criteria to be considered in good faith in determining whether the electronic sell-through residual should be increased or deceased include patterns of cannibalization of the home video market and changes in the wholesale price.