UPDATED with more details: SAG-AFTRA has reached a tentative agreement with the AMPTP for a new film and TV contract. The two sides began bargaining via video teleconference on April 27. Their current contract had been set to expire on June 30. Read details of the deal below.
The new pact, which the union says will boost members’ incomes by $318 million over three years, includes gains in residuals for original shows made for high-budget streaming platforms, and wage increases of 2.5% in the first year and 3% in each of the second and third years. A 1% increase in funding for the union’s health plan is expected to generate more than $50 million in additional funding over the course of the contract.
“This agreement represents significant and much needed monies to our pension, health and retirement plans, and compensation gains designed to protect the current and next generation of our membership, particularly in the area of high-budget subscription streaming residuals,” said David White, SAG-AFTRA;s national executive director who was its chief negotiator. “We also have specific wins for weekly stunt performers and background performers, in addition to language codifying much-needed improvements in the critical area of nudity and simulated sex scenes.”
“We are living in transformational times,” said SAG-AFTRA president Gabrielle Carteris, who chaired the union’s negotiating committee. “With all that is happening in the world right now, we accomplished something significant, with gains in streaming residuals and increased contributions to the benefits plans. I am proud of the historic protections we achieved for SAG-AFTRA members, particularly women working in scenes related to nudity and simulated sex.”
AMPTP president Carol Lombardini was the lead negotiator for the producers.
In March, SAG-AFTRA’s national board voted overwhelmingly to approve a resolution giving its 38-person executive committee the authority to take actions on behalf of the board during the coronavirus shutdown. The motion stated that “in light of the national emergency,” the board would delegate authority to the Executive Committee to consider, approve and submit to the members for ratification all multi-employer collective bargaining agreements – including this one.
On March 5, just days before the production shutdown began, the Directors Guild — which often sets the pattern of bargaining for the other guilds to follow — reached an agreement with the AMPTP for a new film and TV contract that contained significant gains in residuals for new shows made for streaming, including a nearly 50% increase in residuals for members working on original SVOD series.
The Alliance of Motion Picture and Television Producers also is in negotiations with the WGA for a new film and television contract. The WGA’s current pact, which had been set to expire on May 1, has been extended until June 30 because of the coronavirus pandemic.
In a statement, the guild said that other highlights of the agreement, will now will go to its national board for approval and then to the membership for ratification, include:
Better Residuals Secured for Our Future. Significant improvements were secured in the residuals rate paid to performers for exhibition of their performances for high-budget subscription streaming on platforms like Amazon, Disney+, Hulu and others. The improvements include:
- Lower (Better) Budget Thresholds for High-Budget Subscription Streaming. Reducing the budget needed to trigger the high-budget subscription streaming terms, thereby shrinking the subset of streaming programs that do not benefit from the application of scale and other traditional television terms;
- Better Residuals Formulas.
- (Ceilings) Increasing the ceilings that cap the amount of performer compensation included in the residual calculation;
- (Percentages) Increasing the percentages that are applied to performer compensation to calculate the residual for the first three years of availability of a program; and
- (Foreign) Increasing the percentage used to calculate the residual for availability of a high-budget subscription streaming program on an affiliated foreign streaming service.
Eliminating “Grandfathering.” Additionally, the application of “grandfathering” will be nearly eliminated by year two of the agreement so that new episodes of existing series can enjoy the benefit of these increases. The agreement adjusts the formula for advertiser-supported streaming of high-budget, subscription streaming programs that are exhibited on a related platform and provides clarity for how subscriber counts are determined for newly-launched subscription streaming platforms.
From Past to Future: Recognizing Changing Business Models in Syndication. Recognizing the continued decline of broadcast syndication and the inherent challenges to producers in syndicating under a fixed-residual in the current market, the union conformed to the industry pattern replacing the fixed residual with a 6% revenue-based residual in order to secure improvements in high-budget subscription streaming – the fastest growing part of our business. Importantly, those programs that are currently syndicated under an existing license will continue to pay residuals under the current, fixed residual formula through the duration of the license, including any extensions.
The union secured an additional protection that, for performer contracts entered into on or after July 1, 2020, the new syndication residual may not be advance paid, ensuring that performers actually receive checks for future syndication exhibition of their work. This protects members while positioning performers for enormous gains in the streaming-dominated television landscape of the future.
Under the new agreement, the union also conformed to the extension of the existing domestic travel protocol by allowing international short flights (less than 1,000 air miles) to be booked as coach internationally. Importantly, long-distance flights will still require producers to travel performers in business class. In addition, the union secured an additional protection requiring access to private lounges and priority boarding privileges, when available for short trips in coach outside of North America. This provides security for performers who may be recognized in these airports due to exhibition of their work in international markets.
The union agreed to additional flexibility for producers to find the best platform for their shows by giving them certainty that they can pay residuals as though the program was always going to be made for the platform on which it ends up initially exhibiting. This provision applies to shows made for television and subscription streaming services like Amazon, Hulu, etc. The provision includes terms protecting performer compensation in the event of a platform change.
Highlights of the tentative agreement include:
- Total package valued at $318 million over three years;
- 3-year agreement commencing July 1, 2020 and expiring June 30, 2023;
- Wage increases of 2.5% percent in the first year, 3%in the second year and 3%in the third year, with options to divert 0.5% to SAG-AFTRA Health Plan or the SAG Pension Plan/AFTRA Retirement Fund in years two and three;
- Improved residuals for original programming made for high-budget subscription streaming;
- Substantial gains to funding the SAG-AFTRA Health plan with a 1% increase to the contribution rate in year one, which is forecast to generate approximately $54 million in additional funding for the next three years, and the opportunity to add another 1% to either the Health Plan or the Pension Plan/Retirement Fund through wage diversions in years two and three;
- Meaningful improvements to protections for principal and background performers working in the nude or performing in simulated sex scenes, including improvements to notice and consent requirements;
- Improvements to how overtime is calculated for weekly stunt performers employed by the week on episodic series under schedule H-II;
- Improvements to money and schedule breaks;
- An additional covered background position for West Coast episodic production commencing in year two.
The new three-year agreement will be presented to the SAG-AFTRA National Board of Directors for its approval, to be followed by a member ratification vote.
Negotiations began April 27 and concluded June 11.