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SAG-AFTRA and the Alliance for Motion Picture and Television Producers Reach a Deal

After three extensions and close to two months of negotiations, SAG-AFTRA and the Alliance of Motion Picture and Television Producers (“AMPTP”), a trade association of Hollywood’s largest production companies, reached a tentative deal on a new three year master contract covering film and television on Friday, July 4, 2014.  The negotiations were led by Carol Lombardini for AMPTP and David White for SAG-AFTRA and resulted in a new 2014 Producers-SAG-AFTRA Codified Basic Agreement and an industry-wide 2014 SAG-AFTRA Television Agreement (together, the “Agreement”).

Industry news outlets speculate that issues related to merging the legacy agreements of SAG and AFTRA were the reason for the protracted negotiations.  The Agreement succeeds the Producers-Screen Actors Guild Codified Basic Agreement, Screen Actors Guild Television Agreement, Exhibit A of the AFTRA National Code of Fair Practice for Network Television Broadcasting, The CW Supplement, and the basic cable agreements.  Ken Howard, SAG-AFTRA president, said, “unifying the legacy SAG and AFTRA contracts was essential and I am very pleased that we were able to achieve that. . . .  As important, we have established an industry-wide, basic cable agreement – something we have wanted for two decades.”

Some highlights from the Agreement include:

  • similar terms and full television rate minimums for productions made for subscription video on demand services (e.g., Netflix, Hulu Plus);
  • a reduction in the free streaming window from 17 days to 7 days;
  • wage increases of 2.5% in the first year of the Agreement and 3% increases in the second and third years of the Agreement;
  • the exclusion of two stand-ins from the count of background actors in television and one stand-in from the count of background actors in theatrical productions beginning in the second year of the Agreement;
  • an increase in the money union members must be paid before their residuals can be advance paid in several areas, including under The CW Supplement; and
  • a first-year increase of .5% in the AMPTP contribution rate applicable to the Screen Actors Guild-Producers Pension Plan (“SAG Plan”) and the AFTRA Health & Retirement Funds (“AFTRA Plan”), bringing the total benefits contribution rate to 17%.

In addition, AMPTP agreed to take steps towards merging the SAG Plan with the AFTRA Plan.  Combining these plans was a chief motivator for the ratification of the 2012 merger of SAG and AFTRA as many performers found themselves contributing to both unions’ plans but falling short of qualifying levels in either.  The Agreement provides for a contribution allocation method to help stabilize the funding of the pension, health and retirement plans as well as a mechanism to amend contract provisions, as necessary, to facilitate a merger of the plans.

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Joi Garner is a Senior Associate with Garvey Schubert Barer, working in its New York office.

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The Sports, Arts and Entertainment Group at Garvey Schubert Barer provides full service legal representation on sports, entertainment and business matters, including handling transactions related to brand management, licensing, joint ventures, venture capital, private equity, technology, the Internet and new media.
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