How Not to Negotiate: 101

In my 50 years in show business, I have never seen a worse negotiation by a guild than that being conducted by the team of the Screen Actors Guild with the studios for a new contract. The results so far are: the guild is split, the N.Y. chapter demanded a federal negotiator, relations with fellow guild AFTRA is in shambles, DGA is sore because SAG negotiators insulted their contract, the studios are alienated and actors have lost millions of dollars still working under the old deal. How can anyone believe it's anything but a disaster? A review of the facts is revealing:

FACT: The Directors Guild of America (DGA) contract expired with the studios June 30th, the same date as the Screen Actors Guild (SAG). DGA quietly started formal negotiations with AMPTP on January 11, 2008.

To prepare, DGA engaged expert consultants to develop forecasts and analyze future business models regarding new media use. No fanfare, no posturing, and just six days later, Jan 17, DGA reached an agreement with the AMPTP.

FACT: Using ideas from the DGA deal, ending their strike, WGA finalized an agreement with AMPTP on February 12th . When AMPTP invited SAG to begin early contract talks SAG leadership told them, in so many words, when they're ready they'll contact them. Like the DGA, SAG could have begin it's negotiation in January but delayed the first meeting for three more months until April 15.

FACT: With no progress in sight, AFTRA waiting to bargain together with SAG, in disgust decided to bargain separately. Only 17 days later, using the DGA/WGA template, AFTRA had an agreement.

FACT: Then in an outrageous act, SAG tried to sabotage another guild's contract when they mounted an all out campaign to scuttle the member's approval of the AMPTP-AFTRA agreement. SAG wasted time and money to defeat the ratification of the AFTRA agreement.

FACT: SAG's attack failed and the AFTRA agreement was approved. Now three guilds had an agreement with the AMPTP. SAG's response, they are not going to take it. It's a bad deal, and they want a better one. "A bad deal," not according to the other three guilds who responded, "it was groundbreaking".

FACT: Frustrated by the delays and incensed by insisting on a better deal than the other guilds the AMPTP made a non-negotiable final offer to SAG using the same template as WGA, DGA and AFTRA and, in addition, offering a $10,000,000 sweetener if the agreement is signed by August 15th. SAG didn't, so goodbye $10,000,000.

FACT: With the delays, the AFTRA fiasco, a stalemate with the studios, and SAG going nowhere, there was a major dissention in the guild. In a recent election a new slate of directors was put forward by the dissenters and they won and now hold a small majority of the board. Isn't that sad, on top of everything else the negotiating committee caused havoc in its own guild.

FACT: SAG insistence it must get a better media deal than DGA, WGA and AFTRA is ludicrous. Give me a break The AMPTP isn't going to make a more favorable deal with one guild over the others. Can you imagine what chaos it would create? They're never going to do it. So what happens now?

FACT: The SAG negotiating plan was weak and misguided. First they had too much trash talk before they started meeting with AMPTP. Next they caused too many delays. Three months earlier and they'd have been involved it setting the template.

SAG negotiators underestimated the strength of their opposition, DGA did not. The DGA was ready with that million dollar research report and subsequently made the deal they wanted. SAG decided to play hardball.

FACT: So now with SAG's disastrous start how will they get to a final solution? First they had to find away to get back to the table with AMPTP. After turning down a suggestion earlier by SAG's N.Y. chapter for a Federal Mediator, now pushed by the new board members, SAG finally agreed and the studios joined. It's the only way the old SAG negotiating committee was going to save face. But after 3 days negotiations broke down.

SAG keeps insisting on better terms than the other guilds, a point the studios are adamant they will not do.

FACT: Now SAG is discussing a strike. It requires a 75% vote of SAG members and in view of today's giant economic crisis, people are going to be hard pressed to strike.

Could a strike be effective today. When the studios were just film companies, a strike could cause a major financial disruption for the company. But today the studios are part of major conglomerates so a disruption of their movie division would be, with some, just a glitch in their overall operations. Also in today's economic climate it could give the studios an opportunity to cut down on overhead. A strike would be another disastrous move by SAG.

So with the other 4 guilds contracts in place after 8 months SAG is still floundering and is absolutely no closer to a deal. SAG members deserve better.

(This article has no interest in the terms of an agreement; it only criticizes how SAG chooses to get there.)

Comments

[ndem]

Perhaps a strike is the only way to be heard or even make a dent as the studios are now part of conglomerates....look at the fact that the WGA agreement has already been disregarded by AMPTP and they are in a lawsuit....the problem is it is always about their own accounting and wanting to own everything v. valuing the creative talent...if there were no unions they would expect everyone to work for free as if it were simply a privilege and NOT a real vocation and job! I like the countries where the crew and talent are considered like craftspeople in guilds which are highly respected! They are not ranked by $$$ signs...besides those dollar signs might not be worth much anymore anyway so why not go for it? I say SAG has nothing to lose...unless the studios decide to just go reality or virtual everything...m

[Lendall]

I worked as an executive in Hollywood for over twenty years, and then decided to jump from the frying pan into the fire by switching to the creative side. Ergo I believe I can view the situation from both perspectives (management and creative). When "home video" (then VHS cassette sales) first appeared on the scene, a guy named Austin Furst at a company called Vestron invented a formula that the studios were quick to adopt: All that went into "gross receipts" from the sale of a cassette was a "20% royalty," and sometimes the studios charged additional fees ON TOP OF THAT. Once in place, this formula stuck for many years, and affected the "back ends" of everyone on the creative end: writers, directors, actors, even producers. The reason I bring this up: VHS was the "new media" on the block circa 1980. The studios realized that soon it would be the tail that wagged the dog, and (to mix metaphors) wanted to yield only a small piece of the pie to the creatives. The same thing is happening today with the internet. So I have some sympathy with SAG, and wonder if the other guilds and unions might one day regret the deals they made in early 2008.

[BillSeward]

Which, Mr. Wolper, are ZERO. Understand? ZERO is bad for actors, when they rely for up to 50% of their incomes on residuals.

The idea that the AMPTP had any intention of letting SAG , let alone the DGA be "involved" in the creation of their "template" is just silly. The AMPTP had an agenda before ANY of this started: push the creative guilds - especially SAG, where we'll have most of our liability. OUT of profit participation on the internet, where ALL content is headed."

That's not your normal negotiation Mr. Wolper. You could use a little education on the issues.

[newmediafan]

By February, it"s all new media. The broadcast industry as we know it will cease to exist. Everything will be digital. So it"s pretty disingenuous to say that there is no money in new media. It"s also pretty lame not to pay actors the $60 million they already owe from the WGA strike. How would you deal with an employer who refuses to honor contracts?

[LMPE]

Which people do any of these unions represent anyway?

[larry278]

Mr Wolper is sadly mistaken if he thinks a labor dispute in the entertainment business is worth the public's attention now. Wolper should save his rhetoric for the trade papers. The standard managment boiler plate he excretes is as boring & obnoxious as the labor boiler plate which the SAG is excreting. Keep your rhetoric & gripes in California & other spots where entertainment is produced, is an industry & plays a vital part in the area's economy. David, you may not have noticed but borrowing money is extremely difficult now, for every body.
The world's economy crashed on 9/15/08. As VARIETY said of another event in 1929, "WALL ST LAYS AN EGG". Your dispute with the SAG isn't the main event; it's at the bottom of the card. The main event is the economy, stupid. You show biz types are excessivly found of drama & exaggeration. Your dispute with the actors won't be up in lights this time. Stop with your hype. Keep it for the trades & the really stone, junkie, fans. Go away & play. The grown ups are talk ing serious business. Stop yammering & shouting. Go out in the yard & play. We have work to do. No, you can't help. Outside now, NOW!!! When we want you, we'll call you. [Yes, as in, Don't call us, we'll call you]. Go outside.

[SeanOcali]

Save it. Huffington Post is not a politics-only blog.

[peachesmahoney]

And guess what? In Los Angeles, the actors strike does affect the economy. LA lost $1.3 billion dollars during the WGA strike so we who live here are panicked that this strike will wreak the same sort of havoc.

[AlltheBuzzfromCali]

Overpaid actors are in dreamland if they think the public will care one hoot about their strike. Most should go out and get a real job, if there are any. The millionare A-list set of stars will need to take reduced paychecks or not work at all (sorry, Brangelina, maybe put the next adoption on hold and fire one of the 6 nannies?).

[JRsNana]

Most actors do not make the kind of paychecks the A-list does. Many are just middle-class people, who just happen to act for a living. A very large percentage of SAG members barely make a living wage. They depend on residuals for over 50% of their income in some cases and management is trying to cut that back. The image of all actors being millionaires is just that - an image - and one that is not based in reality.

[Strepsi]

This is not the Auto Industry, where a menial laborer can make $50,000 - $70,000, as of the most recent figure I saw, the AVERAGE income for a unionized Actor was $12,000. Twelve. Because for every Brangelina, there are 1000 actors who get maybe one TV commercial role in a year.

That said, a strike now would be disastrous and it surely looks as if SAG squandered any momentum it may have had.

[PCconservative]

With all due respect to Mr. Wolper...he's a PRODUCER!!! Simply because the AMPTP was able to get the DGA, WGA, AFTRA and IATSE guilds to CAVE-IN on their contracts, doesn't mean SAG should do the same.
Here's the deal, "new media" means productions filmed and released on the internet. Basically the Producers want this new platform to be a "union-free" zone (i.e. no residual payments, which fund the health/welfare + pension funds.) In the very near future, like NOW, you can go to major network dot com sites and view TV series and movies with limited or NO commercials...for FREE! This is how ALL entertainment will come to be released, hence the NEED for a UNION contract for said work and releases.
The AMPTP are greedy b******s and would like nothing better than to bust ALL of the entertainment guilds. THEY are the one's who have NOT negotiated in good faith, not SAG. Times are tough, but the actor's have the moral high ground. I wish them the very best.

[SeanOcali]

I don't follow this stuff too closely. But my understanding is that residuals for TV and DVD are based on the actors' original salary. I simply do not see how that can work with new internet streaming models like Hulu and Netflix Watch Instantly. In fact it couldn't because those things hardly make money. My guess is SAG knows this but doesn't care. They don't want studios giving their stuff away like that. Unfortunately, consumers will and already are demanding this. They will (and do) turn to piracy if the studios can't leverage new technology to deliver their product for little or no money.

[Strepsi]

Here's the thing. Those little commercials you watch before streaming media are... commercials. Networks will set ad rates for streaming media just as for broadcast media. You will pay a similar nominal amount as a viewer (your cable bill, your Internet bill, your Netflix membership), but there is money there don't kid yourself.

The ironic thing is, when Viacom sued Youtube, it DID set a price -- it claimed its TV shows that were being pirated on YouTube were worth $24 BILLION. SO how do they reconcile that with saying "no one knows how much money the internet medium is worth"?