Answering Questions About the WGA Constitution

Answering Questions About the WGA Constitution

Rumor Patrol  

We've been hearing a lot of procedural questions in the last few days, so in an act of serious selflessness, we decided to do a little paging through the WGA Constitution so you don't have to.

Here are the questions we've been hearing most:

Can the Board lift the restraining order (meaning the strike) without a general vote of the membership?

Yes. In Article IX, Section 3b, it states that the restraining order has to be authorized by the membership to start, but that it remains "in effect until withdrawn by the Board."

The Board has the constitutional right to lift the restraining order at their discretion.

That doesn't mean they will, by the way, and no one should interpret this information to mean that the Saturday meeting will automatically result in the strike being lifted if the Board meets, as they are rumored to be doing, on Sunday.

How long does it take to have a ratification vote?

The Constitution provides for three timelines in Article VII, Section 2b:

20 days' notice to members, 10 days' notice, or 48 hours.

The 48 hour option is reserved for meetings dealing with restraining orders [i.e. strikes] or the "membership being called to discuss and take action on related matters." Like, for example, the ratification of a contract that directly impacts the restraining order.

Does that mean that the 48 hours will start at the Saturday meeting, and we'll have to cast a vote by Monday?

No. Because of the notification requirements in the Constitution (same section) the 48 hours couldn't begin before Monday at the earliest. (Or that's how we read it.)

Could the Board lift the strike order sooner, and we could still have a 10-day or 20-day ratification vote?

That is possible under the Constitution. But again, the Board has repeatedly guaranteed that nothing will happen without the input (and approval) of the membership. They are planning to get that input at the Saturday meeting.

When will we have the deal points to see for ourselves?

The current rumor is that the companies have promised to finish the contract draft language on the deal points by Friday, so that the deal summary can be released to membership.

If the companies don't do that, then obviously we won't be able to evaluate the deal points before the Saturday meeting -- remember, any deal points not yet put in contract language are not final. They could be changed, to our disadvantage, in contract if we don't get them nailed down now.

We at UH hope that the companies will live up to what they've promised, so the membership can see the deal points and evaluate them for ourselves in a timely manner.

What does this mean in relation to the Saturday meeting?

Well, it's not a Constitutional question, but here's the answer: EVERYONE NEEDS TO BE THERE.

We're going to be briefed on the negotiation as it stands. Hopefully, the contract language will be finished, which means there will be some finality to the deal points that are presented to us. We'll get to hear what's going on -- and we'll have the right to decide what happens next.

We all want to get answers, so we can make the best decision possible on whatever deal terms are put forward to us. And the Saturday meeting is the place to get those answers.

The Board will be there, and they'll listen to what we say, because that's their job. The only way our voices might not be heard -- is if we don't show up.

Letter to SAG Members -- Weaknesses in the DGA Deal

Letter to SAG Members -- Weaknesses in the DGA Deal

Correcting the Record  

This letter was just sent out to SAG members by Doug Allen (Executive Director and Chief Negotiator) and Allen Rosenberg (President). Emphases in red are from us at UH -- LK.

Dear SAG Member:

Everyone hopes the WGA strike will end with a fair deal for the writers. There has been much speculation about the impact on the WGA strike of the tentative agreement between the Directors Guild of America (DGA) and the employers' representative, the Alliance of Motion Picture and Television Producers (AMPTP). Some have rushed to anoint their deal as the “solution” for the entertainment industry. We believe that assessment is premature.

All we know of the deal are the general terms described in a joint AMPTP/DGA press release. That press release leaves many important questions unanswered. Apparently, many elements of this deal remain unresolved and/or have not been reduced to writing.

The DGA press release suggests progress in some areas, but until the details are known, that is only speculation. Several examples: The formula for new media “electronic sell through (paid downloads or EST)” is based on the higher distributor’s gross revenues, rather than producer’s gross revenues, but the definition of distributor’s gross is vague and not sufficient to protect against manipulation by the employers. Also, information regarding employer “deals and data” will be available to the DGA to monitor distributor’s gross and paid downloads on the Internet, but the press release does not detail what data, who provides the data, and what happens if the data is not provided. The devil is in the details. In the tri-guild audits under the current guilds’ collective bargaining agreements (including the DGA’s), for example, some audits are still open after eight years, because of problems with enforcement under current contract language.

Some have suggested that the new DGA deal contains a “fair market value” test for revenues included in the new media residuals calculation, to protect against self-dealing when one part of a conglomerate sells new media content to another part of the conglomerate at an unfair, low price in order to reduce residuals. We hope this is true, but the press release does not use “arms-length transaction” or “fair market value test” language, and says only, “If our exhibitor or retailer is part of the producer’s corporate family, (DGA has) improved provisions for challenging any suspect transactions.” This language could mean anything, and certainly does not guarantee against self-dealing by media conglomerates to hurt creative talent.

Fair market value and distributor’s gross are two issues that the AMPTP demanded that the WGA take off the table, along with four other items, which resulted in talks breaking off in December. Now after prolonging the strike for another month, the AMPTP has negotiated these two issues with the DGA.

That is the good news. There are also even more serious problems with other provisions described in the DGA press release, particularly those involving new media. For example, why are residuals for electronic sell-through (paid downloads or EST) for directors based on their lower DVD formula (.3%) rather than the higher pay TV formula (1.2%) in their current agreement? All three guilds – SAG, WGA, and DGA – filed for arbitration to overturn management’s attempt to impose the DVD formula for residuals on the calculation of residuals for downloads under the current agreement. The DGA stated in their arbitration filings that payment of the lower amount is a violation of the collective bargaining agreement and the proper residual formula is the higher pay TV percentage. The concession by the DGA in the new deal, to use the formula that management improperly imposed under the current agreement, is an AMPTP roll-back. The new agreed-upon percentages for television (.7%) or feature films (.65%) are much lower in the DGA deal than the percentage that the DGA claims is appropriate in its arbitration (1.2%). And these “increases”, which are based on the discredited DVD formula, do not increase residuals on the sale of DVD’s, but only apply to downloads; despite the fact that DVD’s will generate billions in revenue to the studios and networks for years to come.

The very high thresholds in the DGA deal for full jurisdiction for made for new media content may well incentivize non-union work below the threshold amounts ($15, 000/minute, $300,000/program, $500,000/series, whichever is lower). What will stop the industry from making cheap, non-union pilots at below $300,000 per episode, for testing first on the Internet before the productions migrate to broadcast or basic cable?

Your Guild has signed 210 Internet producers to SAG contracts in the past two years and only seven of them (or 3%) would fall inside the high DGA jurisdictional thresholds. We have worked hard, just as we do with low budget features, to capture this Internet work and to make sure it is done union. This DGA proposal appears to abandon jurisdiction over a huge swath of actual Internet productions, which we currently cover.

This deal gingerly addresses certain issues now, with the apparent hope that in three years or more, revenues will grow and the agreement can be improved to capture more of it. Bargaining history in the entertainment industry, however, teaches that it is much harder to get a fair share of revenue after management puts it in their pockets for years. Residual compensation should be based on a fair share of revenue generated by covered content from the first dollar. Rather than a “percentage of revenue, payment from first dollar” approach to residuals, the DGA deal instead provides for a 17 day window for free streaming of television programs over the Internet without compensation (24 days for the program’s first season). The deal also allows a one year buy-out of $1200 for Internet use v. $20,000 for one re-run on broadcast television.

For these specific reasons, and because so much of the new DGA/AMPTP deal is unknown, no one should assume this new deal is a template for anyone else, certainly not for actors. It is up to the leadership and membership of the DGA to decide if their new deal with the studios and networks is acceptable, but whatever they decide, their decision will not determine what will be satisfactory for the leadership and membership of Screen Actors Guild. Each guild must act in the best interest of its own membership, including rejecting management-imposed “pattern bargaining.”

In solidarity,

Alan Rosenberg, President
Doug Allen, Executive Director and Chief Negotiator

Rumor Mill on Overdrive

Rumor Mill on Overdrive

Correcting the Record  

Yes, we are hearing the same rumors you're hearing. Repeat: rumors. And last time we all got too excited by such unsubstantiated expectations, well, you know.

So as you get your third email and/or phone call from the guy who knows somebody who talked to the woman who heard from a person "who knows people who know," take a deep breath and read Ray Richmond's column yesterday on The Huffington Post. An excerpt:

With the settlement rumors again flying fast, we are left to question the precise source of said scuttlebutt. Here is one undeniably pessimistic and hardcore but I believe at least semi-plausible theory:

The studios make a deal with the Directors Guild, whose residual guarantees don't come close to matching what the WGA is seeking. A producer rep circulates around the idea that things are looking up and informal talks have commenced. There is a resumption of in-person bargaining, followed quickly by an abrupt break-off and the usual angry recriminations along the lines of "So it seems those arrogant bastard writers think they're worth more than the directors!" and "We held out an olive branch and they ripped it to shreds!". The producers still have done nothing to move the talks forward -- or in truth even start them -- yet can seize the moral high ground. The WGA side will have been lured into a trap. The premise postulates that the studios have zero interest in ever coming to a reasoned agreement but are instead moving resolutely forward on a campaign of solidarity splintering and ultimate guild destruction.

Mind you, this conspiratorial scenario could be 100% (OK, 98%) off-base. An accord might conceivably come today and I'd be exposed as an alarmist whack job -- a development which I would applaud enthusiastically, if slightly sheepishly. We have, after all, seen an increasing trickle of independent production companies breaking ranks and signing their own pacts with the WGA, a list that now includes a couple of heavyweights like Lionsgate, Marvel and the Weinstein Co. Still, there remains unbending unity among the only guys who count: Disney, Warner Bros., Fox, et al.

But let's end here on a buoyant note, shall we? It's a gorgeous January day. The town is buzzing. The writers are picketing. The air is pregnant with possibility. And if you listen really hard, you can make out the glorious sound of thawing ice. On the other hand, that could also just be the moguls rubbing their hands together.

Is the above the worst case and an admittedly "pessimistic" scenario? You bet. Just as all the rumors flying fast and furious the last 24 hours are of the rose-colored glasses variety. So stay calm and wait until we have facts instead of getting too high or low based on a text message based on an anonymous blog post based on a tip from "a guy who knows a guy who talked to a guy."