Joint Policy Committee

Talent Matters: IUSC Update

At a recent meeting of the Industry-Union Standing Committee (IUSC), the unions requested that signatories be reminded of the following:

Vehicle Driver Not Precision Driver

As has been bulletined previously, the term “precision driver” is not a term that exists in the collective bargaining agreements and should not be used as a designation when employing vehicle drivers.  The proper designation to be used is “vehicle driver.”

Extras- Agency Fee (a/k/a Agent’s Commission)

SAG TV Commercials Contract :  Schedule D.13  Agency Fee
AFTRA TV Recorded Commercials Contract: Schedule C.50  Agency Fee

Signatories are reminded of the requirement in the above provisions that:
       
       “All compensation paid to extra performers employed by the Producer
       through any agency shall be net to the extra performer, except for such
       deductions or withholdings as may from time to time be provided by law.

       The Producer, not the extra performer, shall bear the agency fee for
      obtaining employment.  If the extra performer is represented by an
      agent, the Producer will include the agent’s commission in the gross
      compensation to the extra performer provided that the performer’s
      gross compensation less such agent’s commission is not below the
      applicable minimum compensation for such employment.  However,
      an extra performer working in the classification of hand model under
      the “Unlimited Use” provisions of : (SAG) Section 6, Minimum Wage Scales;
      (AFTRA) Section 2, Minimum Wage Rates, may pay an agent’s commission
      out of such minimum payment. Gross compensation for all extra
      performers shall be subject to applicable : (SAG) Pension and
      Health; (AFTRA) Health and Retirement, contributions.”

Producers-Screen Actors Guild (“SAG”) 2011 Codified Corporate/Educational Contract and the 2011 American Federation of Television and Radio Artists (“AFTRA”) National Code of Fair Practice for Corporate/Educational Recorded Material

On or about March 31, 2011, negotiations concluded for the Producers-SAG 2011 Codified Corporate/Educational Contract (formerly, the Producers-SAG Codified Industrial and Educational Contract) and the 2011 AFTRA National Code of Fair Practice for Corporate/Educational Recorded Material (formerly, the AFTRA National Code of Fair Practice for Non-Broadcast Industrial/Educational Recorded Material) (collectively, the “Industrial Codes”) with a group of companies. This group was not a multi-employer bargaining unit and only those companies that negotiated directly with the unions became obligated to the terms of the new agreement at the conclusion of the negotiations (assuming the terms are accepted by the rank and file of the unions (a process that is underway). It is highly likely, however, that the unions will get their members’ approval.

The JPC does not negotiate the Industrial Codes. JPC authorizers are not, as a result of their status as JPC authorizers, obligated to comply with the Industrial Codes. JPC authorizers are only obligated to comply with the Commercials Codes of SAG, AFTRA, and the AFofM that are negotiated for them by the JPC.

Please be advised that the terms (including, but not limited to, the new rates and P&H contribution level) only apply if a company has specifically agreed in writing with the unions to the new terms or is producing through third party, e.g., a talent payroll company, that has agreed to the new 2011 Industrial Codes. Otherwise, the 2009 Industrial Codes continue to apply to industrial productions by signatories who have not yet agreed to the new terms. If the unions wish to obligate a company to the new terms, whether a signatory to the 2009 Industrial Codes or a non-signatory, the unions are obligated, should a company desire to do so, to negotiate in good faith with respect to a new agreement. Or, a company can elect to simply accept the new terms and forego negotiations when presented with the agreement. The new agreement cannot, however, be mandated by the unions.

Should you be approached by the unions with the new 2011 Industrial Codes, we suggest you consult with your labor counsel or other business advisors before agreeing to any new
terms or commencing negotiations.

The JPC cannot provide advice on the Industrial Codes.

Update on Take Down Notices

This letter addresses the JPC’s previous dispute with the unions regarding the sending of take down notices in response to claims of unauthorized Internet use.

SAG and AFTRA have confirmed that:

• There is no requirement in the Commercials Contract for a signatory to issue a take down notice in response to a claim of unauthorized Internet use on, e.g., You Tube.
• However, if signatories elect to cooperate and send a take down notice, such cooperation will not be considered evidence of an accepted industry practice under the Commercials Contract.
• The sending of a take down notice in response to a claim of unauthorized Internet use will NOT be used precedent. Meaning, if a signatory sends a take down notice in response to one specific request from the unions, this does not mean that a signatory is then obligated to send a take down notice in response to any or all future requests.

Note that it is the copyright owner (in most cases, the advertiser) that has the authority to send a take down notice. In situations where the authorizer is not the copyright owner, e.g., an advertising agency, they may also choose to cooperate and forward the notice to the copyright owner. Doing so will not create any precedent with the unions.

Update: The GRP Talent Payment JPC/Unions Pilot

As readers are aware, the GRP Pilot, testing a new way actors who perform in television commercials are paid, is underway. Over 2,000 commercials are being tested to see if a GRP (ratings) based compensation model will work.  The results of the Pilot will be the centerpiece of negotiations with the unions scheduled to begin in October 2011. If adopted, this model will revolutionize the way advertisers pay actors. Some advertisers will pay less; others will pay more. But for the first time since the union agreements were adopted in the 1950's, there will be a measurable correlation between what an advertiser pays actors and their ROI on those costs.

Many advertisers are participating and more are being invited to do so. Surprisingly, some advertisers who have been asked to participate have declined, citing concerns over confidentiality of the data they share in the Pilot or because they do not like the idea of paying on GRP's (fearful of paying more than the current model requires).

Without question, confidentiality of the data is critical, but the concerns on confidentiality in the Pilot are unfounded. Pricewaterhouse Coopers is running the Pilot under strict confidentiality requirements. PwC routinely handles highly confidential information for advertiser clients, many of whom are competitors. They have never had a breach. The same standards are being applied in the Pilot.

Fear of how a new payment model will affect costs is understandable. That is the precise reason we are running the Pilot -- to see where price changes will occur and to adjust the model to insure equitable distribution of costs. By not participating, an advertiser will not have the opportunity to raise real, measurable concerns and the JPC will not have an opportunity to take those concerns into consideration. That leaves non-participating advertisers in the dark. If adopted, there will be no choice in how actors are paid. It will be the new model. So not participating is, quite frankly, short sighted. It's a gamble that the Pilot will have an advertiser in it that has the same media profile as the advertiser electing not to participate. In a Pilot that is dealing with annual industry spending of over $1 billion, that's a gamble with very poor odds.

If you would like to participate, please contact Allan Linderman at allan@lindermanmedia or call him at +1 805 498-5163.  If you have decided not to participate, I urge you to reconsider or to call me to discuss your concerns. I can be reached at [email protected] or +1 212 549-0377.

Douglas Wood is the Chief Negotiator for the advertising industry in its relations with SAG and AFTRA, General Counsel to the ANA, and a partner in the law firm of Reed Smith LLP. 

American Federation of Musicians (AFofM) Employer Pension Plan Mailing

The American Federation of Musicians (AFofM) Employers Pension Fund recently sent a mailing to those companies who are signatories to the various AFofM  collective bargaining agreements.  This mailing addresses issues regarding an AFofM Pension Rehabilitation Plan.  Those companies who are JPC authorizer signatories to the new AFofM 2009 Commercials Agreement or those companies who become direct signatories to that agreement need not take any further action and may disregard the “call for action” in this mailing. Your employer obligations concerning this issue have been covered under the terms of the new 2009 Commercials Agreement.

Use of Music Recorded under AFofM Agreements

As a reminder to advertiser and agency signatories to the American Federation of Musicians Commercial Announcements Agreement, the JPC has re-issued this advisory, originally published in November, 1999.

The advisory deals with the issue of the use of music produced under the commercials agreement and under other AFofM agreements when that music is subsequently re-purposed for other media. 

New AFofM 2009-2012 Commercial Announcements Agreement Rate Charts

Download a copy of the new 2009 -2012 rate charts for the American Federation of Musicians Commercial Announcements Agreement.

An additional note regarding Pension Rates: from June 1, 2010 through March 31, 2011 the Pension Rate is increased to 12.48%; from April 1, 2011 through October 16, 2012 the Pension Rate is increased to 13.08%.

Because of the “Red Zone” issue in regard to the union’s pension plan, the Pension rate increases will apply to any music track in any commercial regardless of which AFM Commercials Agreement the music track was originally produced under….for example, a music track that was produced under the 2004 – 2007 agreement and is currently being used ---the new pension rates will apply to any use payment for that music track.

New AFofM 2009-2012 Commercial Announcements Agreement

We are pleased to announce that the ANA-4A’s Joint Policy Committee (JPC) has reached agreement with the American Federation of Musicians (AFofM) for a new 2009 -2012 Commercial Announcements Agreement (the agreement is subject to final approval by the full JPC and ratification by the membership of the AFofM –both of which are to be reasonably expected).

In order to allow agencies and their payroll companies time to reprogram their systems and issue timely payments predicated on the new rates, we are issuing the following brief summary of the pertinent points of the new agreement. In addition, a copy of the Memorandum of Understanding can be found here.

Summary:

Change in Name:  Because the agreement covers television, radio, Internet and New Media (as it has since 2007), the name is changed from the “Television and Radio Commercial Announcements Agreement” to simply the “Commercial Announcements Agreement.”

Term: October 17, 2009 through October 16, 2012.

Wages:

Minimum Call Session:
Effective April 9, 2010, the minimum call session fee for all music tracks produced on or after April 9, 2010 is $120 for Side Musicians and $240 for Leader, Contractor and Single Musician.

Initial Use Payments:
Effective April 9, 2010, Initial Use Payments for any commercial announcement produced using music recorded on or after October 17, 2009 for Side Musicians is $34 and $68 for Leader, Contractor and Single Musician.

Other Wages:
Effective April 9, 2010 and excluding fixed allowances such as cartage, all other wages (including Foreign Use) -- are increased by 4.35% and apply to all music tracks produced on or after October 17, 2009.

To re-cap: the wage increase is not retroactive for any payments made for session work that occurred or for initial use cycles, or use/re-use cycles that commenced during the period from October 17, 2009 through April 8, 2010.

Initial Use/Use/Re-Use cycles that commence on or after April 9, 2010 are to be paid at the new rates for all music tracks recorded on or after of October 17, 2009.

Examples:
1) Music track recorded on March 15, 2010 – session paid at the 2007-2009 rates-no increase due for the session. Music track is then incorporated into a commercial announcement for which the Initial Use Cycle commences on April 16, 2010: the Initial Use Cycle is paid at the new 2009 rate.

2) Music track recorded on November 5, 2009 – session paid at the 2007-2009 rates-no increase due for the session. Music track was then incorporated into a commercial announcement for which the Initial Use Cycle commenced on December 14, 2010: the Initial Use Cycle was paid at the 2007-2009 rates  – no increase due. The commercial announcement then commences a re-use cycle on April 20, 2010 – the re-use cycle is paid at the new 2009-2012 rates.

The above scenarios would similarly apply to those music tracks recorded for television and subsequently dubbed into radio and vice versa.

Wage rates will continue to be rounded as applicable and as in previous agreements.

Effective April 9, 2010, all use/reuse payments under Article XIV shall continue to be based on the current ratio to the applicable session fee.

Pension Payments:

Effective from June 1, 2010 through March 31, 2011 the Pension Rate is 12.48%.

Effective from April 1, 2011 through October 16, 2012 the Pension Rate is 13.08%.

Note: Because of the “Red Zone” issue in regard to the union’s pension plan, the Pension rate increases will apply to any music track in any commercial regardless of which AFM Commercials Agreement the music track was originally produced under….for example, a music track which was produced under the 2004 – 2007 agreement and which is currently being used ---the new pension rates will apply to any use payment for that music track.

Health Plan:  No increase.

Eight Week Cycles: Consistent with the SAG/AFTRA Commercials Contracts, signatories may opt for consecutive 8 week cycles of use for non-broadcast and Internet and New Media use, at 38% of the AFofM 52 week rate. NOTE:  In the case of “ made fors” – the option for 8 week rates does not commence until after the Initial Use cycle payment is made which continues to cover the first 26 weeks of use.

The 4A’s would like to express its thanks and appreciation to all of the members of the JPC, and in particular Danielle Korn, McCann Erickson and Leslie Meeds, Publicis, Agency Chair and Agency Co-Chair of the JPC respectively, and to Doug Wood, JPC Lead Negotiator, and his attorney colleagues at Reed Smith -- Stacy Marcus and David Weissman -- for their time and efforts in bringing this negotiation to a successful conclusion.

Hollywood - Wake Up!

If you’ve entered into a celebrity endorsement agreement lately, you’re not alone in being amazed that while we’re all feeling the brunt of a recession (even while prognosticators tell us it’s over), celebrities (or more often their agents), seem to be getting greedier than ever.

It’s bad enough that the typical annual fee for a few days work is now almost always in the seven figures, but isn’t it a bit much when they also want things like this:

• Travel.  First class airfare - not just for themselves (as required under SAG and AFTRA) - but also for their entire entourage?  What?  They can’t travel alone like the rest of us working stiffs?  For what they’re being paid, they could bring just about anyone they’d like.  Just think of the frequent flyer miles they’d get!  Worse, of late the “stars” are demanding private jets – as in about $75,000 a trip!  Really now, isn’t that a bit much?  The usual reason they demand to fly private jets is personal security.  I bet even the TSA would argue with an agent as to whether that’s justified.  Or maybe it’s really because they don’t want to associate with those fans that contribute to their fame and fortune.  Or, it’s the paparazzi.  But if all that is a problem, I’m sure the airlines can find a way to get them to the plane through some secret entrances only they know about.  Get real and join the rest of us (we’ll be the ones in the back of the plane).

• Work Days.  Increasingly, days of service are limited to no more than ten hours, sometimes even eight - and less for photo shoots or personal appearances.  Gee, don’t you feel bad for someone being paid seven figures who might have to work overtime?  And, yes, I’m willing to concede that much of what an advertiser pays is for the fame associated with the celebrity, which certainly eats into the day rate.  But come on.  Don’t we all wish we could go home after ten hours?

• Behave!  Judging by the behavior clauses agents are demanding, one can’t help but think that agents for celebrities simply don’t trust their clients.  If you can call them behavior clauses at all.  When the standard is “convicted” of a felony, you might as well ignore the clause.  The contract will long be over by the time the jury decides what to do.  And please, agents, stop telling us how wonderful your client is.  I suspect they said that for just about every celebrity who fell from grace with prostitutes, alcohol, drugs, bigotry, or domestic violence.  Shouldn’t agents ask their clients to behave just like the rest of us do?  Imagine if any of us embarrassed our employers in public like some celebrities do.  Guess what happens then?

• Approval.  Just how far can approval rights go before the celebrities might as well write the ads?  Maybe I can understand approval rights over executions that directly reflect negatively on the celebrity themselves, but approval over all copy is ridiculous.  Maybe it’s best for advertisers to send a portfolio of what they’ve done in the past and ask the celebrity not to waste their time unless they don’t mind how the advertiser historically sells its products.  And best of all are the celebrities who won’t let anyone else appear in an advertisement with them.  Imagine telling a movie producer they can be the only actor in a movie.  Stop already.

• Prohibited Media.  Increasingly, the list of media an advertiser can’t use is longer than the media permitted.  I can remember when life sized cutouts and some outdoor was all that was prohibited in most contracts.  Now it’s anything that wasn’t invented ten years ago including mobile, social media, and all the new media platforms where advertisers are migrating more and more media dollars.  Does that make sense?  Worse, an increasing number of celebs want to approve media schedules!  Since when did a celebrity earn that right?  I think it’s pretty safe to say that the advertiser knows best where to place ads so, God forbid, they lead to sales.

• Exposure.  Hello?  What do you think advertising is about?  Hoping that some might see the ad in some obscure magazine and then maybe buy the product?  Let’s get real here.  Celebrities are hired by advertisers for one reason – to increase sales.  Surprise!  And that means one thing – exposure and as much of it as the advertiser can afford.  But then again, I guess the exposure problem makes sense when you look at all the celebrities whose careers have been ruined because they appeared in advertising.  Oh, wait.  I can’t seem to find that list.  But how about the one I did find – the one listing all the actors who would be unemployed memories but for the advertising they’re asked to do?  Now that’s an interesting list agents and their clients ought to appreciate a lot more than they do.

The insanity goes on and on and the greed seems unending.  Yep.  Hollywood needs a wake up call.  Or do they?  Maybe it’s not Hollywood that needs to wake up.  After all, they’re getting away with it.  Maybe, just maybe, it’s the advertising community – the advertisers, the advertising agencies and the celebrity brokers – that needs the wake up call.  Because as long as they keep saying “yes” to whatever a star wants, the less and less they’ll get and the more they’ll pay for it.

Callaway and the SAG Plans Settle

In February 2007, the Callaway Golf Company sued the Screen Actors Guild Health and Pension Plans, seeking a declaratory judgment that the P&H allocation for covered services made by Callaway on behalf of the golfers who appeared in Callaway commercials was sufficient and that the allocation demanded by the plans was excessive.  

The parties settled the case on January 31, 2010 after years of discovery and nearly a week into the bench trial.  The settlement can be found here.  Unlike many past settlements of allocation disputes and suits to enforce the provisions in the Commercials Contract, the Callaway settlement is public and free for all to see.