4-1-09
Actors/Advertisers Sign New Contract After Smooth Negotiations
Everybody was expecting a revolution, but the advertising contract AFTRA and SAG signed in the early morning hours of April 1 with the Joint Policy Committee of advertising agencies and producers looks a lot like ad contracts of years past. There are a some rate hikes ($36 million total) and some new Internet structures, but in terms of wiping out the payment structure as we know it, that was tabled for study, to be decided in 2012. Class A, pay per play commercials, in other words, have been preserved.
The advertisers were looking to wipe out Class A, to be replaced by a Gross Rating Points structure that would pay actors based on how many people saw the ads. The actors unions aren’t averse to GRP, which was suggested in a Booz Allen study commissioned in the last round of negotiations.
“GRP is a very elegant way of doing things,” said John Carter Brown, Chicago’s SAG board rep who, as an alternate, sat in on a good deal of the negotiations in New York. “It makes sense, because we’re talking about the same thing.”
That same thing would be actual commercial viewers. So actors who appeared in one Super Bowl ad would be paid more than actors who appeared in a commercial that ran 50 times on daytime television, because the Super Bowl would have more viewers. But this example brings up one of the issues with GRP. Daytime is a highly targeted and valuable market. There might not be as many viewers, but those who watch are more likely to buy certain products. That has to be valued in some way under a new system.
Also at issue is how Gross Rating Points are measured. Often, ratings systems come up with different numbers.
To answer these questions, the advertisers and the unions have decided on yet another study, this one to see exactly how GRP would play out. They will meet to put a plan in place April 15. The plan will look at payment and tracking models and follow actors as if they were getting paid under GRP. They will then compare the mock numbers to actual payment numbers. Then, no later than Jan. 3, 2012, the two parties will start GRP negotiations—fully three months before the currently negotiated contract is set to expire.
Meanwhile, actors gained quite a bit in the new ad contract. Not only was Class A preserved, its session fee was raised by 4.43 percent. That rate increase applies to wild spot and cable session fees as well.
That amounts to a big 25 bucks for on-camera work, raising the session fee from $567.10 to $592.22. For voice-over, that raise will be about $19. The old fee was $426.39. The new one will be $445.28.
That raise is just for session fees. The amount of payment per Class A run remains the same as the previous contract.
The contract also provides a loose structure for Internet payments. Three years ago, unions got jurisdiction over Internet ads, but compensation was bargained freely between the actors and the producers. Now, for any ads made for or moved over to the Internet, actors will be paid 1.3 times the minimum session fee for eight weeks’ use and 3.5 times the minimum session fee for one year’s use.
AFTRA and SAG also eked out a .5 percent increase in Pension and Health payments, making the total employer contribution 15.3 percent. In exchange, the unions gave the advertisers a cap on P&H payments per performer, per contract, per year. The advertisers wanted to stop paying P&H if a performer made over $250,000 in a year. The unions were able to raise that to $1 million.
All parties say the negotiations went smoothly, with actors and advertisers trying to work through issues in a professional manner. More importantly, AFTRA and SAG worked together smoothly, raising the hope that Phase 1 bargaining will be reinstituted for other contracts in the future.
“When unions work together, things work better,” said Brown. “This was the healthiest negotiation I’ve been in in many years.”
“It’s a really good deal,” said Reardon “We worked very hard and the committee worked as a joint committee beautifully.”
AFTRA and SAG dissolved Phase 1 last year, just prior to the Television/Theatricals contract talks. AFTRA signed a deal with TV producers last summer. SAG is still negotiating with TV and movie producers.