COUNTDOWN TO JUNE 30TH: Calm Down. There Will Be No Strike Sequel. But When Will Hollywood Ever Get Back To Work?

Here is my COUNTDOWN TO JUNE 30TH package:
Part I: SAG/AFTRA/AMPTP Overview: Calm Down. There Will Be No Strike Sequel
Part II: The Details That The Moguls Don’t Want You To Know


The sense of panic among actors, writers, directors and below-the-liners is palpable in Hollywood right now. Matched only by the angst of agents whose phones aren’t ringing, and out-of-town journalists struggling to write “strike sequel” scare stories for Monday. Strange, isn’t it, that the only Hollywood types without any visible flop sweat from the de facto shutdown of production are the network and studio moguls. Because they are the puppeteers pulling everybody else’s strings. From behind the scenes, they order Hollywood to jump, and the town asks how high. And never more so than during all these guild negotiations. If only the entire industry could stay focused on the actions of Big Media and start pressuring the Hollywood CEOs to put people back to work. Instead, everyone’s attention has strayed to the carnival sideshow of SAG vs AFTRA, and AFTRA vs SAG, and Big Star vs Big Star, and all the other diversions in an already confused situation.

Now take a deep breath and calm down. To understand what’s going on right now, I first need to ask you to do the following: reflect on everything you knew surrounding the writers strike, and then throw it all out the window. What’s going on with SAG and AFTRA and the AMPTP is the complete opposite of what happened a few month back. The writers were, for the most part, united. The actors are divided to the point of distraction. The writers went after the AMPTP and the Big Media behemoths. The actors are going after each other. The agents and moguls back-channelled negotiations with the WGA. Hardly any back-channelling is going on right now between the moguls and SAG, while the agents are sitting on their hands. All the moguls kept close tabs on pre- and post-strike talks with the writers. Now some CEOs are so disengaged they’re not reading their own labor lawyers’ memos, much less demanding updates. The writers strike crippled television while movies went virtually unscathed. But the de facto strike or de facto lockout, depending on your POV, has seemingly halted moviemaking while television production continues mostly uninterrupted.

The result is that Hollywood has to rewire, reboot and rethink everything. In this case, past doesn’t have to be prologue. There doesn’t have to be a strike. In fact, I can definitely tell you that SAG has “never suggested that a strike was an objective or essential,” I’m told by an insider. “Yes, it is an option. But SAG leadership has not been the ones threatening it or sabre-rattling.” And another insider puts it even more forcefully: “Not only is there no strike plan, there is no strike authorization, and there is no requirement that SAG has to go on strike once the contract expires on June 30th. It’s not uncommon in labor disputes for union members to agree to extend the contract or to remain working under the existing terms of the previous contract while negotiations continue.”

The Screen Actors Guild released the following statement Sunday from national president Alan Rosenberg confirming it’s not in strike mode: “We have taken no steps to initiate a strike authorization vote by the members of Screen Actors Guild. Any talk about a strike or a management lockout at this point is simply a distraction. The Screen Actors Guild national negotiating committee is coming to the bargaining table every day in good faith to negotiate a fair contract for actors.”

And yet there are highly organized factions at the top of the studios and networks, IATSE locals, AFTRA leadership, and even SAG’s own board that want to scare everyone into thinking a walkout is inevitable unless there’s complete contract capitulation by SAG leadership. I’m telling you this is untrue. So is SAG, which told members Sunday: “Unfortunately, there are a few press reports and blogs erroneously reporting misinformation based on false statements made by a few people who oppose our objectives to continue negotiating for a fair contract. Some have even implied that a strike is looming this week. Don’t let these scare tactics fool you.” 

Yes, there’s an uneasy countdown to June 30th when SAG’s contract with the AMPTP expires at midnight. What happens then? In all likelihood, the two sides will continue bargaining. (After all, the AMPTP is on record saying that the only reason it left the negotiations with the WGA after the writers’ contract expired is because the guild called an immediate strike.)

A more defining deadline is July 8th, when AFTRA announces its contract ratification vote results. So what happens then? Again, not a SAG strike. The guild’s leadership understands that there’s no urgency within the membership at this time for such an extreme call. Which is precisely why there’s no impetus atop the guild to even consider holding a strike authorization vote. If one were held and no authorization given, SAG would suffer a psychological blow from which it probably couldn’t recover this contract cycle. Ergo, no push for a vote.

However, it’s underhanded for AFTRA to try to put one over on its members with language that a “yes” vote ratifies its recently drawn up AMPTP contract, but a “no” vote doesn’t just send the pact back to the negotiators to try for better terms but actually puts in motion something far more draconian — which is to authorize the AFTRA board to call a strike.

Will AFTRA members ratify the new contract with the AMPTP? Two weeks ago, I would have said definitely. Last week, probably. And this week, I really don’t know based on anecdotes and tea leaves. But every day that passes before that announcement is made, 77,000-member AFTRA gets more shrill and hysterical, and 120,000-strong SAG gets more over-reaching and arrogant, as they battle over 44,000 dual members.

Which is why I felt before, and still feel now, that SAG’s anti-AFTRA ratification campaign was a big waste of time. Even SAG’s board is divided on this issue. SAG leadership’s explanation to its members is that a “no” vote is crucial to let the moguls know that AFTRA’s lousy deal (undermining residuals, clips consent and other primetime network issues valued by actors who have those protections under SAG) won’t go down with dual members. But the reality is that, even if ratification is rejected, AFTRA will still find a way to suck up to the AMPTP and redeliver only a slightly less lousy contract to its members. It’s simply in the smaller union’s nature to do that given its inferiority complex. However if the AFTRA pact is ratified, then SAG leadership will have been seen as squandering time and energy on a losing cause

But all this importance bestowed on AFTRA is absurd. The union is responsible only for three scripted network primetime series, one of which has been cancelled. The union should pick up a few more scripted network pilots by September. But its business in relation to SAG’s is like a chihuahua pestering a mastiff. SAG, however, is worried about AFTRA’s growing control over scripted cable shows and wants to “draw a line in the sand” on that issue. But I say this is not the proper time or place to deal with that now. Let the two unions stage a cage match after Hollywood gets back to work.

Finding itself SAG’s target gave AFTRA more credit than it deserved. And so it emboldened AFTRA leadership to nip at SAG’s heels. AFTRA president Roberta Reardon came up with a pitiful excuse to justify what was clearly a predetermined decision not to bargain alongside SAG. Instead, AFTRA truly made a deal with the devil in order to do the AMPTP’s bidding. AFTRA relentlessly villified the bigger actors guild’s current leadership which continues even now. Unfortunately, SAG bit back — and the result has been spin and propaganda from both sides that is unsavory and unnecessary.

AFTRA also added insult to injury by starting this terrible bloodsport of pitting Big Actor vs Big Actor even though none of these AMPTP pacts affect any of these superstars. Not only have most not worked under AFTRA’s contract for eons, but they have top agents who negotiate their individual deals. But AFTRA nonetheless was the first to officially email members and media a graphic of Sally Field, James Cromwell et al supporting ratification. Yes, AFTRA played the emotion card by spotlighting Sally Field, the woman who won an Oscar for her portrayal of union organizer Norma Rae. (But, interestingly, the email sent to members announcng her support was sent to “Everyone (Minus LA)”. Hmm.

Guild contracts are all about strength in numbers, the power of collective bargaining, and looking out for the little guys. In entertainment, they’re about protecting residuals which allow creatives to lead middle-class lives. They’re not about Tom Hanks, Jack Nicholson or George Clooney. Do these A-listers have the right to express an opinion? Of course. Do their names carry weight? Sure. Are they relevant to this discussion? Hardly. I’d so much rather see all the superstars collectively call the moguls and put pressure on the AMPTP to deal seriously with SAG. (I’ll have more about the SAG vs AFTRA Battle Of The Superstars in Part III posting on Saturday. There’s so much that hasn’t been reported…)

It was bad enough when the DGA and WGA were pitted against each other by the AMPTP. But now the Hollywood CEOs have found a new scapegoat for the de facto strike/lockout stalling Hollywood, and it’s SAG. It’s true that SAG has signed more than 350 guaranteed completion contracts with independent producers of films, the top 50 or so of which boast budgets between $14 million and $40 million dollars and represent in total hundreds of millions of dollars. But pro-AMPTP factions are out and about in Hollywood claiming that SAG has shut down the town. I don’t know how that’s possible. The Hollywood CEOs own the means of production and so only they have the power to stop principal photography on big studio films based on their own “fear” of a looming actors strike. But there is no evidence that the guild is contemplating such a labor action either in the near or distant future. So that fear is either irrational or manipulative.

As for the negotiations between SAG and the AMPTP, they are at a complete standstill. SAG national executive director Doug Allen recently broke his media blackout to make clear that it’s not SAG who has been stalling. For instance, few people know that, when talks were resumed between the two sides after the May hiatus, the AMPTP refused to even offer the big actors guild either the WGA deal or the AFTRA deal. Instead, the Big Media cartel forced SAG to negotiate up from ground zero for weeks on end so that only as of today is the AFTRA deal even on the table. How is that fair pattern bargaining? Yet the moguls demand that SAG settle for the contract terms accepted by every other guild, especially on New Media. That’s where the writers chose to draw their line in the sand, however faint, after failing to make lucrative agreements for each new technology that came along — first VHS, then DVDs, now streaming and downloading. Had the Hollywood CEOs been honest and open to renegotiate the contract terms each time a new format caught on, these guild negotiations wouldn’t be so arduous. Instead there are years and years of resentment to contend with — as well as an infamously unmoveable AMPTP force, soon-to-retire Nick Counter, who craftily and contemptuously makes each guild essentially negotiate with itself by forcing the other side to drop issue after issue without any reciprocity. The writers got a little, but not a lot. Now it’s SAG’s turn to try for a little more which, under Favored Nations, will trickle down to the WGA and DGA. 

So where are the moguls themselves in all this? Nowhere. I’ve been told in absolute terms that the Big Media CEOs have decided to return the process of negotiating these guild contracts to the AMPTP’s sole oversight. That means neither Peter Chernin (News Corp/Fox) nor Bob Iger (Disney) nor Les Moonves (CBS), who all at one time or another took leadership roles during the WGA strike settlement, will volunteer to get involved this time around with SAG. A story which appeared back on June 18th in Variety under the headline, “Chernin, Iger May Resume SAG Roles,” is untrue, I have been assured by several major moguls. (More details behind the scenes of the negotiations in Part II here.)

Hollywood’s top agents are no longer neutral parties. Unwilling to absorb another round of commission losses and bridge loans, they are very privately backing the studios and networks against SAG. “If I could break the union, I would,” one tenpercentery topper tells me.

Finally, let’s look at what leverage both sides in this labor contract negotiation have. It would seem on the surface that the moguls hold all the cards since they decide when Hollywood gets back to work and how much actors will be paid and the conditions under which the thesps will work. So, at some point soon, probably on or around July 8th, the AMPTP will pull the same maneuver it did with the WGA (and even with SAG back on May 6th) and walk out of the talks while at the same time issuing an ultimatum and blaming SAG for the stalemate. As for the arbitration process known as “last best offer,” which would seem to favor the AMPTP in the likelihood the standoff continues, WGA exec director Doug Young has already informed his SAG counterpart Doug Allen that the Big Media cartel offered the writers “at least 10’last best offers” before the contract settlement was reached.  

SAG, for its part, can start to organize rolling sick-outs of actors to delay TV and studio productions. It can threaten a boycott of the Emmys. And most moguls will admit that they can’t keep a lid on movie production forever and need to start principal photography on many projects no later than September 1st. In addition, the Hollywood CEOs still have hanging over their heads those hefty force majeure liabilities ranging from $10M to $60M per company left over from the writers strike and payable to SAG, which has offered to engage in settlement talks if progress on the contract is made. Moreover, SAG can start meeting around the country with big institutional investors who own sizeable stakes in the Big Media companies. That latter strategy distressed the moguls enough to start getting serious about ending the writers strike as much as the guild’s promise of Oscar picket lines threatened to KO the biggest night in moviedom.

And although the entertainment companies plead poverty to guild negotiators, the fact is business is very very good for Big Media even in today’s down economy despite the recession and the writers strike.  Meanwhile, New Media has become this sector’s newest profit center, with alone expected to generate “tens of millions” of dollars in revenue next year “in a business that didn’t exist” a few years ago, NBC TV Network President John Eck said at a PricewaterhouseCoopers sponsored media conference just this week. So why shouldn’t creatives share? But unless they negotiate a bigger piece of the pie now instead of later, history has shown that the corporations simply won’t renegotiate new technology terms in 3 years, or ever, even as the business grows. That’s certainly what happened to DVDs. 

In conclusion, the quicker Hollywood realizes that SAG is not the obstacle here, the quicker this town will get back to work. No one knows better than the writers what torture dealing with the AMPTP really is. So it’s important to note that whatever better New Media terms negotiated by SAG leadership will be enjoyed by both the WGA and DGA. That’s because of a verbal “Favored Nations” agreement negotiated during the final days of the writers strike and considered binding by the guilds even if it was never formally written down. In other words, this is not just SAG’s fight with the AMPTP anymore. It’s creatives vs Big Media corporations. Let’s hope Hollywood is back to work by July 21st.

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