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 Advertising Production Newsletter July, 2000 (203) 454-8781 To Our Clients... this newsletter updates you on two important topics in the TV commercial production business: the current SAG/AFTRA strike and digital video. The union strike shows no sign of ending, so we advise our clients to plan for the long haul. Interim agreements offered by SAG should not be signed by advertisers because the increased rates for cable are prohibitive (see our rate comparison chart). This means shooting with non-union talent, as has been successfully done during past strikes. The digital revolution in TV has started in the United Kingdom, where analog/digital simulcasting began July 1. Contact Al Stauderman if you want further information on either subject. SAG strike goes on and on and on... Here's an overview of the situation as we close out the second month of SAG and AFTRA's TV Commercial strike, which began May 1. 1. Production continues all around the U.S. and overseas. Non-union talent is mostly being used. We haven't heard of many union actors crossing picket lines. SAG strikers have successfully disrupted only a handful of shoots. The ANA reports that 862 new commercials were shot between May 15-June 15 using non-union talent. 2. Overseas production is booming. Canada (particularly Vancouver) is picking up still more production work despite the Canadian union's (ACTRA) stated support of the strike. A Canadian arbitrator ruled that the SAG "Interim Agreement" is not applicable to US commercials being filmed in Canada, using ACTRA talent. In Australia, talent union people are looking for any US advertisers except these who have signed interim agreements with SAG. New Zealand, Mexico and Europe are seemingly unaffected by the strike. 3. Interim agreements have been signed with SAG by a reported 1,400 companies, many of them small "start-up" agencies and recording studios. These interim agreements bind their signatories to the terms of the present SAG proposal that was on the table when the union struck, which are regarded as onerous by the advertiser community (see related article on cable costs). Advertisers who work through these start-up agencies are paying them per the SAG demands. Should the agencies not survive the eventual strike settlement, SAG will probably expect the advertisers to pay the talent directly, at the interim contract rates. 4. The effect on the U.S. production industry and on crews has been significant. According to the LA Times, over $1 million in production revenue per day is being lost in the Los Angeles area due to the strike. Shoot reported that actors are losing about $2 million a day during the strike, based on last year's report and earnings. One prominent talent agency, Herb Tannen & Associates, is closing its on-camera commercial department, citing sharp drops in revenue and predicting that the "full effect won't be felt until two or three months after the strike is over." 5. Negotiations are stalled, but meetings are being held. The Union and industry negotiators each met with federal mediators on June 13. The industry Joint Policy Committee met on June 27. 6. SAG has reached new heights (or lows, depending on your viewpoint) in militancy in two highly publicized events: * The AICP show at New York's Museum of Modern Art was picketed by SAG members who yelled threats and obscenities at those attending. Some attendees of the AICP show, who had been neutral or sympathetic to the actor's guild, found strikers offensive and have hardened against the Union. * A Lincoln-Mercury shoot on location near Palm Springs was closed down as SAG stunt drivers in their own cars disrupted the running footage shots by dangerous maneuvers, including swerving suddenly in front of the picture car and causing it to do panic stops. Following the aborted job, Ford announced it was curtailing commercial production until after the strike. Cable Re-Use Rates Explode Under SAG "Interim" Agreement Corky Fairty, our Business Affairs Manager, compared the cable re-use rates for two commercials for two different BBS clients under the recently expired 1997 SAG Commercials contract and the SAG Interim Agreement. Rates for both commercials are based on actual year 2000 media cable buys. The Interim Agreement rates for Commercial #1 are 22 times higher than those of the 1997 contract! Commercial #2 is 8.5 times higher under the Interim Agreement. Commercial #1 - two on camera performers and one voice over 1997 rates $ 14,414.80 Interim Agreement Rates $313,954.35 Commercial #2 - four on camera performers and two voice overs 1997 rates $ 28,839.08 Interim Agreement Rates $243,526.76 Something for Everyone? It's Possible! By Al Stauderman The current SAG/AFTRA strike brings into focus one of the many inequities of the present TV commercial talent re-use payment system. Under the present pay system, an actor who appears with ten other performers in a commercial and is seen for a fleeting second on the tube, receives the same handsome re-use pay as an actor who does a solo performance for the entire 30 seconds. The multi-performer commercial is ten times more expensive than the solo commercial for the advertiser to run. It's no wonder that the U.S. film industry is losing business to Canadian and overseas producers, who can engage talent for large cast commercials at a fraction of the total cost paid to SAG members in the United States. The current strike is a bonanza to advertisers who want to take advantage of this "contract-less" time to produce commercials it could not afford to produce under the former rules. Other big beneficiaries are overseas production people and talent, who are getting well-paid work they wouldn't see if American actors were available. As a production executive, quoted in Advertising Age, remarked "The fact is, (SAG) is getting more money for fewer people versus more money for more of their members. It's gotten to the point that, when you get a big cast, you go out of the country, no matter what." SAG, a union with a reported 131,500 members - a mere 2,800 or so of whom are earning more than $25,000 per year - has a golden opportunity to give more of those members a chance to work by reducing the huge costs of using them in commercials with big casts. A plan has been proposed that would permit modified buyouts at reduced costs for SAG members who appear in commercials with large casts. We think such a plan would be good for the U.S. production industry, for the advertising industry, and for members of the unions. In sum, something for everyone. It's a concept that both sides of the contract dispute should be able to agree on. This information was circulated by Matt Miller, President of the AICP, to the heads of member companies. We've borrowed it with permission from the AICP web site. What to Expect When Shooting Make no mistake. The SAG strikers are well organized and are operating under the direction of experienced strike leaders. If your production includes non-union talent and you are filming at a location that has public access, then you should prepare to be picketed. It will go something like this. Before shoot days, union organizers will attempt to contact your talent either directly or indirectly and intimidate them into not working a non-union shoot. Fear of being excluded from the union in the future is their primary tool of dissuasion. The Joint Policy Committee (AAAA/A.N.A.) has issued an open letter addressing this issue. It cites The National Labor Relations Act, which states that the union cannot legally blackball performers who choose to work during the strike. Please find this document on the ANA web site (ana.net), familiarize yourself with it, and give it to your performers. On shoot days, picketers will attempt to position themselves as close to camera as possible. They will try to get in your shot. They will make noise to interfere with sound recordings. They will call you a scab along with your crew, cast and clients. They will make disparaging comments about your client's company. In some isolated past incidents they have directed obscene comments and gestures towards you and your people. Freedom of speech is something we all enjoy and support in this country, but the further these activities are from your perimeter, the more enjoyable and productive your shoot day will be. Detailed information on casting non-union talent and shooting on location may be obtained from the AICP web site or the BBS web site. Casting Of Non-Union Talent Non-union casting sessions in Los Angeles and other major cities have proven to be very successful in terms of being able to find appropriate talent for most roles. The following are thoughts to consider when casting non-union talent: * Do not use a sign-in sheet at non-union casting sessions. This is a SAG contract requirement and therefore unnecessary in these sessions. The names of actors have fallen into union organizer's hands through these sheets. * Plan on spending more time casting. The non-union talent does exist, it just takes longer to find. Initial sessions that once took two or three days could now take four or five days, so budget accordingly. * Once you've selected non-union talent, have the advertising agency agree to a day rate and buyout payment well ahead of the shoot date if possible. In very few cases, actors have accepted a role and then changed their minds - or in some cases not shown up at all. A suggestion has been raised to pay some money up front for acceptance of the booking and sign a contract with specific dates and negotiated rates. An actor not appearing on the agreed date would constitute a breach of contract. * Another suggestion has arisen for actors in key roles who would not be easily replaced at the last minute. That is to pay them an additional day rate and put them up in a hotel the night before the shoot. Production personnel could pick them up the morning of the shoot and be assured of their arrival to location. This could be an inexpensive insurance policy compared to lost overtime hours or potentially a lost shoot day. Shooting On Location Of course the best way to avoid strike interference is to select shooting sites where picketers would be excluded from entrance, such as sound stages, backlots and other completely private properties. Some companies have chosen to move their shoots outside of Los Angeles County to avoid exposure through publicly available permits, such as the EIDC "Shoot Sheet." Out of the zone shoots could add several hours in travel overtime, but you may find this preferable to dealing with pickets in certain situations. In addition, SAG does not have unlimited resources for picketing. We have seen that SAG seems to go after only one or two shoots per day, and many production companies have reported seeing the same faces on a regular basis. While we have no way of knowing the picket schedule for SAG members, many production companies have been alerted in advance, through a variety of means, of SAG's plans. The best defense against a picket is to communicate frequently with key crew, other production partners, and the AICP office. The following are thoughts to consider when planning a location shoot in close proximity to public property. * Permit as large an area as possible in order to create a comfortable perimeter between you and where picketers could assemble. Also secure the right for intermittent sidewalk and street closures on all sides of your location. Your ability to move picketers out of position even for short periods of time may help your cause in unforeseen ways. * First order of business when you arrive on location is to meet with the lead Police Officer/Sheriff. Give the officer a copy of your permits, riders to permits and location releases and inform them of your plans for the day. Let them know that picketers will be challenging the officers throughout the day by attempting to push the line in any way possible. * Hold a safety meeting at the beginning and end of each day. Tell your crew members to keep a cool head and don't engage with the picketers. Even though they'll be hearing "scab" comments and the like, if they simply go about their business your production will not become part of the problem. Issues such as disturbing the peace will remain focused on the picketers. As hard as it may be, we need to stand down in these situations. * On shoot days you should consider hiring a location manager or someone with knowledge of permits, locations, etc. to act as a liaison with the police. The police will become your mediator as you go about your day. It can become overwhelming for the line producer to deal with all the strike related issues and produce the job at the same time. * Do not post the customary location signs that direct crew and talent to a location. This only helps the picketers get organized quickly. In addition, some companies have taken multiple permits for shooting. * Have crew people travel in pairs to location. Picketers look to single out individuals and confront them with insulting strike rhetoric. * We need to offer as much protection as possible to non-union actors. Take extra care in bringing talent on the set. Items such as stopwatches, clipboards, walkie-talkies, etc. can keep the focus off of these actors who have chosen to work. Strikers have been known to take pictures of non-union actors and follow their vehicles. This is an illegal act. Devise a quick entrance and exit plan, especially for your actors. In general, do everything within your power to insulate your talent from picketer exposure. * Issue passes to be worn by all crew, cast, agency personnel, clients and anyone else allowed within your perimeter. Picketers have been found in production motor homes looking for call sheets and other valuable information. Also, hand out dashboard placards to be placed in all approved vehicles. Hiring of additional private security to enforce these measures is recommended. * Keep close track of all printed location information and call sheets. Do not print actors information on general call sheets. Use a separate sheet for actors and only disperse that information to those who need it. Consider using a shredder for sensitive information, and secure your trash removal. * In many cases, picketers have used bullhorns to get their point across. Los Angeles Municipal Code 115.02 (other municipalities may have similar codes) states that the use of an amplified bullhorn requires a city permit. Have your officer ask to see their permit. Turning the volume down on the strike chants will not only make your shoot day more pleasant but also safer. If the crowd noise grows too loud it can present a safety issue in terms of not being able to hear walkie-talkie communications. Going Forward As you can see, it's not exactly "business as usual". However, there are ways to work around these new obstacles presented by the strike and continue your business. Now more than ever, advertising agencies and production companies need to work together, as partners. Communication is key. Make sure that your clients and the agencies are aware of all of the contingency planning and safety issues that are being addressed. They will understand that costs such as additional casting, crew overtime, additional crew to handle demanding locations, and other expenses associated with producing during the strike are the nature of the beast. Don't let there be cost-related surprises. If you fully flesh out the issues as a team, this industry will function as usual. 23 Years Too Early Boiled down to its basics, the current SAG strike is about residuals, paid during the use of a commercial, versus up-front buyouts. The unions want the residual system to be expanded. The industry wants it to be simplified, with more money paid up front. The present residual system began in the 1950's when there were three networks and a few hundred local TV stations. Now there are five broadcast networks, countless cable networks, satellite, local cable, Internet, and about 1,400 TV stations. Back in 1977, BBS's Ted Bird (then VP at Doyle Dane Bernbach, an active member of the JPC, and a supporter of various actors causes) and Al Stauderman (then a P&G executive in charge of P&G's TV commercial trafficking system and of most of P&G's commercial production, and a onetime actor) concluded that the residual system simply couldn't stand the test of time. They also felt it was unfair to the actors. If the client used the commercial a lot, actors got a jackpot in re-use payments. But if the client decided not to use the commercial, the actor was stuck with only a relatively paltry session fee. Ted and Al's visionary plan was to pay attractive session fees, but to cut back on the residuals and to simplify the payment system which was, even then, hopelessly complex and inequitable. The plan would not have reduced the payments to TV commercial performers. It just would have redistributed the money to pay the actor more for the work he or she actually had done, and less for the usage the advertiser decided to make of the commercial. The idea was ahead of its time in 1977. Few negotiators had much interest in such a "radical" concept then, when both sides were pretty happy with the way things were. Today, Ted and Al's basic ideas are embodied in the industry position. Curiously, the union is fighting to keep for the status quo - even though, in many ways, the present system is unfair to the very actors it represents. Digital/Analog TV Simulcasts Begin in U. K. On July 1, all television in Britain began being simulcast in the old analog and the new digital formats. Other European countries are expected to follow suit within the next 2-3 years. This is of importance to U.S. advertisers, who will be moving into digital in the next few years (all-digital broadcasting is presently mandated for 2006, although an extension in that timing is considered likely). The biggest change will be the format used for programs and TV commercials. The major British broadcasters request that these be produced in a 16 x 9 format, instead of the present 4 x 3. Shown below are the standard 4x 3 screen (L) and how the new format will appear on that screen (R). The new 16x9 format, sometimes called "letterbox", resembles widescreen film and looks like this: The new letterbox format poses an important issue for multi-national advertisers, who must consider filming and releasing their commercials in both 4x3 and 16x9 formats if they want to look good on analog and digital TV sets. If advertisers decide to stay with the old 4x3 format only, their commercials on digital would look like this: We'll keep you posted on developments. For now, expect Stacey, Tara, David, Lynne, Karen and Pat to raise the production format question on any commercials that may be destined for overseas use. Industry-Union TV Commercial Talent Contract Positions at a Glance Issue Industry Union Session fees 4.4% increase to $500 14% increase to $546 Network Flat guarantee of $2,575 for 13 weeks Continue present re-use system at 14% increase Cable 60% increase to $1,627 for 13 weeks Complex pay-for-play arrangement with some increases exceeding 20 times the present use Internet use Flat 2x session fee Re-use based on use measurement Spot Nominal increase 14% increase Use monitoring Industry/Union Committee to determine Industry funded monitoring system for commercial usage Talent Contract Forms Available - All BBS clients have received copies of model contracts for use by agencies or independent producers to engage talent during the SAG strike. Additional copies of these are available from Corky Fairty at BBS. Three agreements have been prepared: Principal Player Agreement for SAG members who choose to work; Principal Player (non-union) Agreement for speaking or featured roles and Commercial Talent Agreement for players in non-featured roles and extras. . |
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