Joint Policy Committee

New Rate Charts

Update (3/31/10):  See below

Update (6/15/09):  These rate charts have been revised to reflect minor rounding corrections to the previously issued documents. You will also find some additional explanations/clarifications based on questions we have been receiving from members.

The JPC and the unions have agreed on the new rate charts.  Remember that while you can now pay under these rates, should the new Contract not be ratified by the unions (which is expected within a month), you will have to seek refunds.  If you prefer, you can pay under the old rates and issue a retroactive payment once the formal approval of the new Contract is accomplished.  Retroactive payments must be received by the performers no later than June 15, 2009.

2009 Radio Recorded Commercials Contract Rate Chart (updated)

2009 Radio Wildspot Tables (updated)

2009 TV Wildspot Unit Values

2009 TV Wildspot Tables (updated)

2009 TV Cable Network Unit Values

2009 TV Commercials Contract - Main Rates (updated)

2009 TV Miscellaneous Rates + Extras Rates (updated 3/31/10)

2009 TV Local Cable Rates

2009 TV Spanish Language Wildspot Unit Values

New Collective Bargaining Agreement: Timetable

Q: What timetable now applies to implementing the new Contract?

The new Contract begins on April 1, 2009 but is not officially approved until the SAG and AFTRA Boards and members vote favorably on its ratification.  The union voting process should be completed by May 15, 2009.  Since the new Contract was unanimously approved by the SAG and AFTRA negotiating committees, it is virtually assured that it will be ratified by the union Boards and members.  But nothing is certain so there are two options:

            a.  Continue to operate under the current contract and make retroactive payments of the new rates once the union Boards and members ratify the new Contract, or

            b.  Pay the new rates (the unions have issued new rate charts) and run the risk that the new Contract will not be ratified and refunds might be required.  Since getting refunds for overpayments from actors is very difficult, the risk associated with paying the new rates may outweigh the benefits of avoiding additional accounting.  Each company needs to make that determination on an individual basis.

Q: How long until the deal is ratified by the unions’ boards and members?

The new Contract was unanimously approved by the Commercials Committees of both unions.  It will now go the each of the unions’ boards for approval.  It will then be sent out to the unions’ members for a vote on ratification.  This entire process should be completed by May 15.

Q: Until the new rates are published, how should I pay actors?

It is probably best to pay under the old rates until the new ones are all agreed upon.  Then you will be able to make retroactive payments to actors.  The proposed new rates will be published shortly but will not be official until the unions’ Boards and members ratify the new Contract.  While you can pay under the new rates prior to ratification, you then take the risk of seeking reimbursement should the unions’ Boards or members fail to ratify the new Contract.

Q.  Which commercials are subject to the new rates and new Contract provisions?

The new rates, terms and provisions apply to the following:

            a.  All original commercials produced on or after April 1, 2009;

            b.  All new or additional versions of commercials originally produced under prior contracts for commercials that are integrated on or after April 1, 2009 under the Integrating of Commercials into Different Commercials  provisions; and

            c.  All versions of commercials that are edited and aired after April 1, 2009 other than as expressly permitted under the Editing of Commercials provisions.

Any terms, rates or conditions of current performer contracts that are more favorable to the performer than those under the new Contracts remain in effect, although we are not immediatly aware of any such provisions.

Q Can I still freely bargain for made-for-Internet or made-for New Media commercials and set any rate I can get the actor to agree to?

Yes.  The minimums will not apply until April 1, 2011.  So you can continue to freely bargain until that time.  Even when the minimums are established, your right to freely bargain on editing remains.

Q: What happens now with the 8 week cycle for the Internet and New Media?

The 8 week cycle is now a permanent part of the new Contract.  You can also run consecutive 8 week cycles as well.  Nor do you need to ask an actor if you can use his or her spot for an 8 week cycle if they have not objected to Internet use.  With regard to rates, the one year moveover rate is now 3.5 session fees and the 8 week cycle is now 1.33 session fees.

Q: Will the JPC be conducting any seminars to explain the new Contract?

Yes.  We’ll have a schedule for seminars out in a few weeks.

Q: Where can I get more information?

Information will be forthcoming as it develops.  For the next few weeks, you need to be patient as documents are finalized and rates are set.  The SAG and AFTRA approval process will also take us through to May 15.  But I’ll try to keep everyone posted on my JPC Blog at the ANA website (www.ana.net) and on the Adlaw by Request blog (www.adlawbyrequest.com).  In the meantime, please feel free to email me at dwood@reeedsmith.com or call me at 212 549-0377.

New Collective Bargaining Agreement FAQ

Q: Can you give us an overview of the deal and the industry gains?

A: Gains for the industry included a wage hike well within ranges being conceded in collective bargaining agreements throughout the nation and in the entertainment industry. We also got agreement from the unions to jointly conduct a two year multi-million dollar pilot on the GRP Payment Model developed by Booz & Company in a 2007 Study commissioned by the JPC and the unions. This is a major victory by the industry and will provide us with a fully operational system by 2011. While no one can force the unions to accept the results, they will be working hand in hand with us and an independent consultant throughout the pilot. Assuming the system works, the proposition to adopt the system will be compelling for both sides.

The controversy over how allocations in celebrity contracts between covered and uncovered services should be determined and how the union can challenge them was resolved very favorably for the industry. Coupled with the cap on P&H contributions, these gains on the P&H front will provide substantial savings to the industry over the course of the contract and into the future. Television and motion picture producers have enjoyed a cap for decades, putting the advertising industry in an inequitable position on contribution levels. That will now end in the last quarter of the third year of the contract. While we would have liked to implement that sooner, conditions of the pension plan and the investment industry prevented us from doing so.

While we conceded a minimum rate for commercials made exclusively for the Internet and new media, the provision is not effective until April 1, 2011.

Some other gains included an exemption for CEOs even when they are not delivering an "institutional message" and liberalization of filming employees at work. Advertisers may now direct them and may even film them off premises on recreated sets in studios where it is impractical to film them at the place of employment.

In the public service area, we gained recognition of our view that PSAs could be used in all media covered by the contract and agreement on a standard template for waivers. We also secured a three year waiver for the Ad Council, allowing them to produce PSAs that directly solicit contributions. Other producers of PSAs can also ask for the waiver and will most likely get it.

On the audition front, agencies and advertisers will no longer have to pay for the third and fourth auditions, provided the call backs are limited to a few of the actors who auditioned in the first two calls.

In addition to the across the board one time increase of 4.50% on session fees, we agreed to bump up commercials moved over to the Internet from three session fees to three and a half session fees for one year and from one session fee to one and a third session fees for an 8 week cycle. With respect to the 8 week cycle, however, you no longer need separate permission from an actor to opt for the shorter cycle if the actor has not withheld Internet rights. It is unusual for actors to withhold such rights when initially hired, so this is a real gain. We also now have the right to opt for an unlimited number of successive 8 week cycles, a major improvement over the prior deal.

In other concessions to the unions that have little impact to advertisers when viewed from a total cost basis, we agreed to raise the extra limits from 40 to 45 and to give extras a flat $8 a day for travel and about $5 a call if they're asked to bring their cell phones or PDAs. We also increased some minor costs in the Spanish language provisions, agreed to holding fees for cable only in exchange for exclusivity, and agreed to pay P&H on choreographers at minimum session levels. We already pay P&H on assistant choreographers.

All these concessions in the economic picture were important to the unions. Our concessions reflect the good faith effort we're now making to improve our relations with one another and to begin to come to the table looking for ways to agree rather than disagree.

Overall, the incremental increase in costs for the three years of the contract compared to last year, the increase is less than 2%. This level takes into account the economic condition affecting the ad community and the economy as a whole.  If one factors in the last three years and predictions for the next three, the increase is a little over 4%, representing an average per year increase from 2009 through 2012 of less than 2% per year. This increase is appropriate in light of collective bargaining agreements negotiated in the last year when compared to figures published by the Bureau of National Affairs.

Q: How does the P&H cap work?

A: Under the current contract, an advertiser must make a 15.5% P&H contribution on 100% of an actor's compensation allocated to services covered by the union contracts. As a rule of thumb, that's usually 50% of the compensation paid where the actor is also doing print, personal appearance and other work not covered by the union contract. Given the lack of a cap, the contributions in many celebrity deals rose steeply to many hundreds of thousands of dollars. In the new deal, the contract was better aligned with other talent contracts in regard to pension and health contributions.  Advertisers must contribute only on the first $1 million allocated to the covered services. The result is that no advertiser will have to pay more than $150,000 in P&H in any given year for a specific celebrity deal. The new cap is effective on January 1, 2012. While we would have liked to implement that sooner, conditions of the pension plan and the investment industry prevented us from doing so.

New Collective Bargaining Agreement with SAG and AFTRA

I am pleased to announce that the JPC and SAG and AFTRA have tentatively agreed on terms for a new collective bargaining agreement commencing April 1, 2009 and ending March 31, 2012.

Formal negotiations began on February 23 and concluded in the early morning of April 1.  Since the opening of negotiations, the two sides met for a total of 25 days.

In many ways, these negotiations set a new stage in the relationship between the advertising industry and the unions.  Rather than approaching the bargaining table as adversaries, the two sides sought to find solutions to one another’s key issues.  While many of these issues were difficult to resolve, the conviction by all parties to find reasons to agree rather than disagree resulted in a fair and balanced agreement.

Full details of the agreement will be released shortly.

I would like to thank the members of the JPC who worked many hours in developing the industry proposals and particularly Danielle Korn and Leslie Meeds who fully participated in the negotiations and were at the bargaining table every day, including days that went well into the night.  A special thanks goes to Kathleen Quinn of the AAAA.  Kathleen is the glue that keeps the JPC working.  Her tireless efforts at the negotiations and years of knowledge working with the unions proved to be invaluable.  I’d also like to thank the ANA, particularly Bob Liodice, Christine Manna, Dan Jaffe and Keith Scarborough for their support and assistance. 

Most importantly, I’d like to thank the union negotiators – John McGuire, Mathis Dunn, and Ray Rodriguez -- for their tireless efforts throughout the negotiations. 

Lastly, I’d like to thank my colleagues, Elky Stone and Greg Hessinger.  Their assistance, knowledge, and wisdom throughout the negotiations helped us all focus on the key issues and accomplish the tasks at hand.

In the end, our success was a team effort that I extend my thanks to everyone involved.