How coincidental that, as I predicted, both the Los Angeles Times and The New York Times came out with the same exact Sundance eve articles blaming SAG if fewer independent films are picked up by the majors and minis. And what galls me is that both articles don’t eviscerate or even criticize the ridiculous premise penned by the LAT‘s John Horn that, “The specialized film units owned by the studios — which include News Corp’s Fox Searchlight and Disney’s Miramax Films — are concerned that if they buy a movie made under SAG’s provisional deal with non-studio producers, the studios might be forced by SAG to adopt an interim agreement, which their parent companies did not negotiate.” I said this before and I’ll say it again: funny, I didn’t hear this distribution issue raised against the Writers Guild before last year’s Sundance Film Festival (or since) even though the WGA actually went on strike and, just like SAG, granted waivers to indie productions before and during the labor action. SAG has now issued one statement confirming what nonsense this is. (See my previous, Media Blames SAG On Eve Of Sundance.) And tonight, the big actors union issued another. I anticipate both papers printing equally absurd “concerns” by studio execs blaming SAG for Sundance’s cold temps…

Los Angeles (January 15, 2009) — Screen Actors Guild today released the following message for distributors and Screen Actors Guild signatories in response to press reports that studio-affiliated distributors have raised concerns about their potential obligations as distributors of motion pictures produced under Guaranteed Completion Contracts in the event of a SAG work stoppage. SAG’s message to distributors was mailed today from the office of SAG NED and Chief Negotiator Doug Allen. The message follows:

January 15, 2009
To Whom It May Concern:

It has come to our attention that certain studio-affiliated distributors have raised concerns regarding their potential obligations as distributors of motion pictures produced under Guaranteed Completion Contracts (“GCCs”) in the event of a work stoppage by the Screen Actors Guild.  As we understand these concerns, certain studio-affiliated distributors believe that in the event of a work stoppage, the Guild might offer an interim contract that contains residuals terms that will be binding on  GCC-covered motion pictures that are different from those found in the current Codified Basic Agreement or from those ultimately negotiated with the AMPTP as part of a successor to the current Codified Basic Agreement.

This concern is unfounded.  In fact, the only residuals terms that will ever be applicable to a motion picture produced under a GCC are those contained in the current SAG Codified Basic Agreement or in a successor to that agreement negotiated with the AMPTP. This is stated explicitly in the Guaranteed Completion Contract itself, a copy of which has been enclosed with this letter for your convenience.  It provides, in relevant part, that:

In the event that the Guild takes a labor action against producers of theatrical motion pictures represented by the AMPTP and offers an agreement (or successive agreements) that it makes generally available to producers of theatrical motion pictures during the pendency of such labor action (hereafter referred to as an “Interim Contract”), then Producer agrees that all terms of that Interim Contract — except for terms governing “residuals” as defined in the Basic Agreement — will apply to the production of the Picture as of the date ten (10) calendar days following the date that the Guild mails a copy of the Interim Contract to Producer at the address provided to the Guild by Producer at the bottom of this Agreement, except that payment for supplemental market exhibitions (i.e., “residuals”) shall be paid according to the Successor Agreement defined in the next paragraph below regardless of whether the Guild offers an Interim Contract (unless principal photography of the Picture is completed before June 30, 2008, in which case the Basic Agreement shall govern residuals.) [emphasis supplied].

As reflected above, the GCC makes clear in two different places that any residuals terms contained in an Interim Contract will not be applicable to productions made under a GCC.  As to pictures completed under a Guaranteed Completion Contract before June 30, 2008, the residuals terms shall be those found in the presently expired 2005 Codified Basic Agreement.  For other pictures, the terms will be those contained in the successor to that agreement that is presently the subject of bargaining the AMPTP.

We hope this will address any concerns that have arisen about the obligations of distributors of motion pictures produced under a GCC.  If you have remaining questions about the foregoing or other concerns about the distribution of GCC motion pictures, please contact Karen Borell or Elizabeth Moseley.

Signed/Douglas F. Allen