Joint AFTRA and SAG National Board of Directors Approves New Commercials Contracts for Ratification

Joint AFTRA and SAG National Board of Directors Approves New Commercials Contracts for Ratification

LOS ANGELES AND NEW YORK (April 18, 2009)-Meeting by videoconference plenary in Los Angeles and New York, the Joint SAG-AFTRA National Board today voted unanimously to approve and recommend to members, new three-year successor agreements to the 2006 AFTRA Television and Radio Commercials Contracts and the 2006 Screen Actors Guild Television Commercials Contract.

The proposed agreements, which cover performers working in commercials made for and reused on television, radio, the Internet, and new media, will net a three-year increase in payments to performers totaling an estimated $36 million, including approximately $21 million in increased contributions to the SAG Pension & Health and AFTRA Health & Retirement plans. The total combined value of the AFTRA and SAG contracts is projected at more than $2.9 billion for working performers, including actors, singers, dancers, choreographers, stunt persons, and extras.

Additionally, the new contracts contain an agreement in principle outlining terms for a pilot study for the purpose of testing the Gross Rating Points (GRP) model of restructuring compensation to performers as proposed by Booz & Co. The two-year study will be conducted by a jointly retained consultant engaged by the unions and the industry. The study will be paid for by grants from Screen Actors Guild-Industry Advancement and Cooperative Fund (IACF) and the AFTRA-Industry Cooperative Fund (AICF).

The unions also successfully established a first-ever payment structure in commercials for the Internet and other new media platforms. The unions established jurisdiction over commercial work made for the Internet in 2000, and new media formats in 2006. The new payment structure goes into effect in the third year of the contract.

The referendum will be mailed to the members of both unions next week (dual SAG and AFTRA members will receive one ballot) with a return date in mid-May. Results will be announced at that time.

Following the vote, AFTRA National President Roberta Reardon and AFTRA Chair of the Joint Negotiating Committee said: "Our new agreement is a major achievement in any economy, but it is especially crucial for union members working to make ends meet in today's difficult marketplace. I applaud the vision and hard work of the joint committee who worked together to win increases both in performers' minimum compensation and in employer contributions to our health and pension plans, and who successfully preserved Class A payments so critically important to our members around the country."

Screen Actors Guild National President Alan Rosenberg said: "I am pleased and gratified to have achieved these gains and to recommend this agreement for ratification. I congratulate all of the parties, and particularly the co-chairs, committee members and staff on the remarkable gains they achieved for actors across the country."

"It's a solid agreement with meaningful gains," said Screen Actors Guild Chair of the Joint Negotiating Committee Sue-Anne Morrow. "There are significant improvements in compensation and benefits for union commercial actors and it gives the industry, including our members, a measure of financial certainty in an uncertain economy. It also guarantees advertisers continued access to the finest actors in the world on whose talent their brand success often rests. It's a win for actors, a win for the industry, and a win for consumers."

Screen Actors Guild Chief Negotiator John McGuire, a veteran of more than 10 separate commercials contracts negotiations said: "This is an agreement we can all be proud of and I look forward to ratification by the members of Screen Actors Guild and AFTRA. I commend the negotiating committee chairs, co-chairs, and members, along with my colleagues Ray Rodriguez, Screen Actors Guild's Deputy National Executive Director of Contracts, and Mathis Dunn, AFTRA's Chief Negotiator."

"This is a successful conclusion to a challenging negotiation, conducted during a difficult economic and technological time in the industry. As always, that success rests with the members of our joint committee, our staff and our counterparts at the Joint Policy Committee. Together, we served the interests of actors and the industry," McGuire added.

AFTRA Assistant National Executive Director Mathis L. Dunn, Jr., who served as AFTRA Chief Negotiator, noted: "I commend all of our union members who participated in the many educational, informational, and wages and working conditions meetings leading up to these negotiations. They delivered a clear message to our joint negotiating committee on their priority issues. I am proud to say that we delivered on these priorities and much more. The agreement will enhance the careers of all working performers today, and protect future generations of union members as technology and consumer tastes shift in the radically changing world of new media."

Highlights of the new agreement include:

• Three-year agreement, term effective April 1, 2009 to March 31, 2012, upon ratification by members of both unions.
• 5.5% overall increase in wages and other compensation over the life of the contracts, including a 4.43% increase, effective April 1, 2009, in Class A, Wild Spot, and basic cable session and use fees.
• For product moved over to the Internet or in New Media, compensation of 1.3 times the minimum session fee for 8 weeks of use and 3.5 times the minimum session fee for one year's use.
• For product made for the Internet or New Media, a new minimum rate structure of 1.3 times the minimum session fee for 8 weeks of use and 3.5 times the minimum session fee for one year's use, effective in the third year of the contract.
• 0.5% increases in the employer contribution rate to the AFTRA H&R and SAG P&H plans, and a 0.2% increase in employer contributions to the SAG Industry Advancement Cooperative Fund and the AFTRA-Industry Cooperative Fund, bringing the total contribution rate to 15.5%. Effective in year three, the agreement provides for a cap on P&H and H&R contributions for services covered by the contracts to $1 million per performer, per contract, per year with anticipated net gains in P&H and H&R over the term of the contract.
• Secured five new covered jobs for commercial extras, up from 40 to 45.
• Established new exclusivity compensation for made-for cable only commercials.
• Instituted, for the first time, a contract provision to pay extras a round-trip mileage fee of $8.
• Increased foreign use payments under the Spanish Language section of the contract.
• The across the board increase under the AFTRA Radio Commercials Contract is 5.35%, in addition to contributions to AFTRA H&R and the AICF.
• All of the unions' proposals regarding diversity issues were addressed in the negotiations.

AFTRA and SAG joint member education and informational meetings will be conducted around the nation to provide members with an opportunity to ask questions and learn more about the new agreements prior to voting.

Formal negotiations between the 26-member AFTRA/SAG Joint Negotiating Committee and the Joint Policy Committee (JPC) of the American Association of Advertising Agencies (AAAA) and the Association of National Advertisers (ANA) began on February 23 and concluded on the morning of April 1 in New York City.