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June 16, 2009

Digital Media Law: SAG Lawsuit Still Grinds On; Court Denies SAG’s Motion to Dismiss Appeal

SAG Lawsuit Still Grinds On; Court Denies SAG’s Motion to Dismiss Appeal

As I previously reported, SAG’s counsel in late May filed a motion to dismiss the appeal by SAG president Alan Rosenberg and three other Membership First hardliners (1st VP Anne-Marie Johnson and board members Diane Ladd and Kent McCord) of a Superior Court order that denied their application for a temporary restraining order. On June 5—just days before the new TV/theatrical contracts were ratified—Rosenberg et al. filed a brief opposing the motion to dismiss.

Unfortunately, the Court of Appeals on June 9 issued a one-sentence order denying the motion to dismiss, presumably meaning that the appeal is too complex to be decided without oral argument (or, at least, full briefing). So, the appeal grinds on. Rosenberg et al. previously filed their brief in the appeal. SAG’s responsive brief is due July 1. Thereafter, Rosenberg et al. get to file a reply brief, and then there will probably be oral argument at some point. Within 90 days after the oral argument, the court will issue its ruling.

In other words, the appeal will probably drag on until sometime in November unless Rosenberg et al. are persuaded to drop it. Meanwhile, the suit itself proceeds in the trial court as well. Confused as to how a case can proceed in two courts at once? Well, it happens, and the legal fees aren’t cheap. All of this sounds like a campaign issue that Unite for Strength will probably raise—why reelect a president who persists in suing his own union? UPDATE: Indeed, as SAGWatch points out, by continuing to pursue their lawsuit, Rosenberg et al. are reneging on a promise Anne-Marie Johnson publicly made to withdraw the suit if the TV/theatrical contracts were approved.

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June 3, 2009

DIGITAL MEDIA LAW: SAG TV/Theatrical Ballots Later Than Expected; SAG Litigation Continues; and More (APR. 29, 2009)

 

Digital Media Law

 

SAG TV/Theatrical Ballots Later Than Expected; SAG Litigation Continues; and More

Posted: 29 Apr 2009 02:19 AM PDT

The ballots for SAG’s recently approved TV/theatrical contract won’t be going out until mid to late May, a source tells me, several weeks later than the early May target that the Guild stated as recently as a week or so ago. That means that ratification, if achieved as expected, will not come until early to mid June, since balloting is expected to be a three week process.

The source, who spoke on condition of anonymity, explained that writing the pro and con statements has only just begun. That process takes a week, and then another week is allowed for rebuttal statements to be written.

(BTW, a copy of the proposed TV/theatrical agreement is available here. I’ve not yet done an analysis, but in the meantime you can read SAGWatch’s.)

Meanwhile, ballots for the commercials contract will be mailed to both SAG and AFTRA members Thursday, and due back May 21, reports Variety. It’s expected to pass easily. In contrast, the TV/theatrical contract will probably pass with a yes vote in the 60%-75% range, roughly in the neighborhood of the AFTRA deal, which achieved 62%. Only a simple majority (i.e., just over 50%) is required.

In other SAG news, Unite for Strength revealed in a Facebook email several days ago that the force majeure compromise is 33 cents on the dollar. “Force majeure” refers to arbitration claims on behalf of about 500 actors for a portion of wages lost due to the 2007-2008 Writer Guild strike. The claims amount to about $63 million, and, thus, the total settlement is about $21 million. I’m told SAG members will get checks several weeks after the agreement is ratified.

That settlement amount—33 cents on the dollar—is on the low side, but that was a tradeoff. SAG wants its contract to expire in mid-2011, to synch up with the WGA, AFTRA, and DGA. That’s an issue created by the ten-month delay that the hardline Membership First faction inflicted on the union; without the delay, the deals would have synched up as a matter of course. To get synchronicity at this late date, SAG had to give something up.

Remember also that the claims are under arbitration. SAG could have gotten zero cents on the dollar if the arbitration had proceeded; or it could have prevailed altogether. With that much uncertainty, a settlement in the 50% range might have been expected. That would have yielded a total of about $31 million, rather than $21 million. So, it’s a reasonable conclusion that SAG gave up about $10 million in order to get the synchronized expiration date—and prompt payment to the affected members.

The Guild also had to agree to modify the TV-related force majeure language in a way that reduces the likelihood of future force majeure claims. To put this in context, though, I’m told there has never been an industry-wide force majeure claim before. The studios obviously want to avoid seeing one again, not only to reduce their costs, but also to decrease the strength by which SAG members would support a writers strike in the future. (In other words, if actors have to bear the entire cost of their own lost wages, they may be less likely to enthusiastically support a strike by a sister union.)

Speaking of lost wages, I also have a couple of factoids on the SAG layoffs: the total number of people laid off was 36 (not 35, as previously reported), with an additional 26 unfilled positions that will remain unfilled. That’s a total reduction in force of 62 positions, and the annual savings to the Guild is $2.5 million in salaries ($4 million if bonuses and other factors are included).

Moving from lost wages to lost causes, there are developments in the lawsuit filed against SAG by the union’s own president, Alan Rosenberg, and his fellow Membership First plaintiffs 1st VP Anne-Marie-Johnson and board members Diane Ladd and Kent McCord. That suit, as you may rather have forgotten, seeks to unseat the TV/theatrical negotiating task force, as well as interim National Executive Director David White and Chief Negotiator John McGuire. That group—plus the commercials negotiating committee—is the team that managed to close two deals in as many months, while MF closed nothing at all over several years.

The lawsuit, in my opinion, hasn’t got a Popsicle’s chance in hell. After all, what judge is going to unwind a twice-ratified union leadership change? Incredibly, the lawsuit proceeds on not one but two tracks, since there are now both a trial court action and a concurrent appeal. Rosenberg’s and his co-plaintiffs’ solicitude for the members apparently includes spending their money on pointless multi-pronged litigation—understandably, since abandoning the litigation before this summer’s SAG election would be no boon to MF’s election prospects. Indeed, if MF ever wins control of the Board again, you can expect a motion to have SAG reimburse Rosenberg et al. for their no doubt considerable litigation costs.

In any case, there are developments on two fronts. In the trial court, SAG filed its Answer to the plaintiffs’ first amended complaint. A variety of defenses are asserted, including that the complaint is moot (because the SAG Board re-fired the previous NED, Doug Allen, at a meeting, after having first done so by a written assent document), interferes with the union’s right of self-governance, and is barred by the wrongful acts of Rosenberg and his co-plaintiffs (this presumably refers to the 28-hour filibuster over which Rosenberg presided in an attempt to prevent Allen from being fired).

Meanwhile, in the Court of Appeal, Rosenberg & co. filed their Appellant’s Opening Brief several days ago, accompanied by multi-volume, multi-hundred page appendices of documents. The arguments are simply a rehash of the arguments Rosenberg and his co-plaintiffs made in the trial court–which were rejected not only by the trial court judge, but also in an earlier appeal. Yes, the current appeal is actually the second, and the case is only three months old.

What next? As the name implies, the Appellant’s Opening Brief is the first brief in the appeal. The next few weeks will see the filing of the respondent’s brief (SAG’s brief) and the reply brief (in which Rosenberg et al. get to reply to SAG’s brief). Then comes oral argument, unless the court decides to proceed based on the briefs alone (which I think the court has the right to do, but I’m not sure).

For those who find appellate work dry and lifeless (it’s all briefs and legal arguments, with no witnesses or jury), the trial court action will grind on as well, doubtless with demurrers, a motion to dismiss, motions for summary judgment, depositions, interrogatories, requests for production of documents, and all of the other costly accoutrement of modern-day litigation. Actually, that’s pretty dry and lifeless too. This could go on for months, providing amusement to everyone except SAG’s accountants. As in entertainment, so too in litigation: the show must go on.

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THR: SAG HANDING OUT PINK SLIPS (APR. 21, 2009)

SAG handing out pink slips

35 employees affected as part of ‘expense reductions’

By Jay A. Fernandez

April 20, 2009, 09:43 PM ET

One day after its national board approved a new TV-theatrical contract, SAG said it plans to lay off about 35 employees, or about 8% of the staff.

“To close a gap between the guild’s expected revenue and costs in the upcoming fiscal year budget, SAG is undertaking a number of expense reductions, including the elimination of some staff positions,” SAG spokesperson Pamela Greenwalt said Monday. “This is a difficult but necessary step that must be taken to responsibly address the fiscal realities confronting our organization.”

On Saturday, the national board approved a $60 million annual budget even as it contends with a $6.5 million operating deficit for fiscal 2009.

The pink slips come at a tumultuous time for the union, which has suffered from a year of destructive internal political struggles, declining revenue from dues and investments, a slowdown in film work for actors as guild leadership negotiated the TV-theatrical contract and a flood of TV pilots that moved to AFTRA coverage.

“I have asked all employees nationwide to convene tomorrow morning so that I, and our executive team, can speak directly to you about this situation and its consequences,” interim national executive director David White said Monday in a staff memo.

Under the leadership of SAG president Alan Rosenberg and ousted NED Doug Allen, the union’s staff grew to about 440 employees. According to SAGWatch.net, which dug up the union’s recent financial reports filed with the Department of Labor, SAG spent slightly less than $81 million in 2005-06, about $94 million in 2006-07 and cleared $100 million in 2007-08.

As the blog points out, that’s an increase in spending of 26% that is unmatched by a parallel increase in revenue.

Meanwhile, the union missed out on $60-plus million in pay increases as a result of rejecting the TV-theatrical offer that had been sitting on the table since June.

SAG national organizing director Todd Amorde left his post last week, though that appears unrelated to this downsizing.

 

Link – http://www.hollywoodreporter.com/hr/content_display/film/news/e3i5d08aae04387a06db5247b7c1e11180a

SAG & STUDIOS AGREE TO TENTATIVE DEAL (APR. 18, 2009)

Saturday, April 18, 2009
SAG & Studios Agree to Tentative Deal
 

The Screen Actors Guild and the AMPTP (alliance representing studios and producers) reached tentative agreement on a two-year TV/theatrical contract, potentially ending a ten-month stalemate that halted production of most studio movies and put thousands of people out of work.

The deal will probably be approved by the SAG board today or tomorrow and ratified by the membership by mid-May, but the hardline MembershipFirst faction has vowed to fight the deal, so ratification, although likely, is not assured. Assuming the deal is in fact ratified (which takes a 50% majority), the stalemate would be over by mid-May. Some production might resume before then, in anticipation of ratification, but this is unknown.

In separate news today, the SAG and AFTRA boards meeting jointly approved the commercials contract reached April 1 with the advertising industry. Ratification ballots will go out to the members of both unions next week, with a return date in mid-May. The deal has wide support among the leadership and is expected to pass easily.

Back to the tentative TV/theatrical deal: Critically, this deal would expire on June 30, 2011, effectively synchronizing it with the Writers Guild, Directors Guild and AFTRA (smaller actors union) deals. That means all four unions will be able to coordinate negotiations and strategy, even to the point of threatening a joint strike by two (WGA and SAG) or three (WGA, SAG and AFTRA) of the unions. (The DGA has essentially never gone on strike, and AFTRA seldom does.)

This synchronicity should give the unions significant leverage, which raises the question of why the studios agreed to it. Probably they needed to restart theatrical film production soon in order to have movies for 2010. That would seem to be the only pressure point SAG had, since the union was widely understood to be unable to strike (a strike authorization would have taken a 75% affirmative vote of those voting, and the union didn’t even seek such a vote for fear of failing).

The gain—synchronicity—came at a price to SAG, however. The new deal compromises the force majeure claims SAG has pending from the 2007-2008 WGA strike. These are claims by actors for lost wages due to the strike, and amount to tens of millions of dollars. It’s unknown as yet how much will be foregone. Also, since the claims were the subject of a pending arbitration process, it’s unknowable how much SAG would have gotten if it had continued to pursue the claims. Thus, it’s hard to calculate the dollar cost of the compromise. The new deal also modifies the force majeure language in the union contract, but the details are unknown.

The deal includes no changes in new media from the AMPTP’s February offer, according to sources. That offer, in turn, is essentially the same as the new media provisions that the DGA, WGA, and AFTRA (in two separate deals) agreed to. (IATSE’s new media provisions are similar in several respects as well.) No change was expected by anyone, yet, ironically, new media was the reason the hardliners stalemated for ten months in a futile attempt to improve on the template accepted in the other five union deals.

The deal will take effect upon ratification, and includes an immediate 3.0% increase in minimum pay rates plus a 0.5% increase in pension and health contributions. A year later, there will be an additional 3.5% increase in minimums, which will run through contract expiration.

In contrast, AFTRA members have been enjoying a 3.5% increase for the last ten months (when AFTRA did its deal), and will receive their 3.0% + 0.5% bump on June 30 of this year. That means that for virtually the entire contract period, AFTRA rates will be about 3.5% higher than SAG’s. In other words, the new deal does not give SAG a double increase in order to catch up with AFTRA.

If SAG wants to ever catch up, they’ll have to seek a double increase in 2011, but that will involve giving up some other issue that SAG would otherwise have negotiated for, and in any case a double increase in 2011 would not be retroactive to the 2009-2011 period. This is part of the damage that the hardliners inflicted on the union.

Speaking of retroactivity, that’s an element that, not surprisingly, this deal doesn’t include either. That means that SAG actors who worked in TV over the last ten months will not receive makeup payments to bring them up to higher minimum pay levels that they would have received if the deal had been done promptly. This also is a result of the delay that MembershipFirst caused by not making a deal almost a year ago. And, of course, the whole issue of expiration date was caused by the hardliners’ delaying tactics.

The deal next goes to the SAG national board tomorrow for approval and then to the members for ratification over a several week period. SAG hardliners will fight the deal—SAG president Alan Rosenberg, 1st VP Anne-Marie Johnson, and former Hollywood board member David Jolliffe are among those who have already spoken in opposition—but I expect it to pass, although not with the over-90% margin the Writer Guild deal did a year ago. The deal will almost certainly go out to the members with a minority statement in opposition. Nonetheless, people are sick of not working and will probably agree that the deal was the best obtainable in a bad economy and with SAG weakened in large part by the hardliners themselves.

One thing that’s clear is that this is a time of enormous change for the Hollywood actors unions. Most immediately, actors have a lot to vote on over the next several months: the commercials contract, the TV/theatrical contract, the AFTRA Board elections, and then the SAG presidential and Board elections, the latter of which are expected to run from July through September.

In addition, several of the Hollywood unions’ pension and/or health plans have made cutbacks (AFTRA, AFM, and IATSE), due to the stock market collapse and to the continued increases in health care costs. Also, SAGWatch reports today that SAG itself is in difficult financial straits, due to MembershipFirst’s mismanagement: loss of union dues due to the production slowdown over the last 10 months, departure of television work to AFTRA due in large part to SAG’s internal strife, the expenses of futile battles with AFTRA and internally, and, most significantly, alleged bloated hiring practices that added 100 staff members to the union payroll. Layoffs are apparently expected, and the LA Times is reporting today that the union has a deficit exceeding $6 million.

SAG’s new leaders have difficult work to do on various other contracts that expired or were ignored on MembershipFirst’s watch, including the franchise agreement between SAG and the town’s talent agents, which expired seven years ago. Then there’s the perennial question of SAG-AFTRA merger, which will probably be a factor in the upcoming SAG elections, as will vituperative arguments about the new TV/theatrical deal and the responsibility for the large-scale decline in SAG’s power and prestige.

Change isn’t limited to the labor side. The AMPTP’s longtime head, Nick Counter, retired several weeks ago. Also, interestingly, the new TV/theatrical deal was negotiated primarily on an informal basis by key SAG leaders and studio heads, not by formal bargaining between the union and the AMPTP. Although AMPTP acting head Carol Lombardini played a part late in the discussions, this process raises questions as to the future role and effectiveness of that organization.

Hanging over all of this are the twin factors of the economy and new media. The troubled economy will continue to harm the entertainment industry for some time to come. New media will continue to evolve, and will probably roil the unions, and the industry as a whole, for a decade or more.

And, of course, with mid-2011 expiration dates set for the WGA, DGA, AFTRA (two deals) and new SAG deals, negotiations will start again in the towards the end of next year. No rest for the weary, or sleep for the sinful, it seems.

http://digitalmedialaw.blogspot.com/2009/04/sag-studios-agree-to-tentative-deal.html

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June 2, 2009

DIGITAL MEDIA LAW: Hollywood Crew Deal Ratified (MAR. 21, 2009)

Filed under: Entertainment — showbizreporting @ 11:22 pm
Tags: , , , , , , ,

 

Digital Media Law

 

Hollywood Crew Deal Ratified

Posted: 21 Mar 2009 04:00 PM PDT

As expected, the membership of IATSE, the union representing Hollywood crew members, ratified that organization’s proposed contract with the studios yesterday, although not without significant opposition. The new contract takes effect August 1 and runs for three years, as is usual with Hollywood labor agreements. It includes 3% annual wage increases.

The deal had been opposed by some members, who cited rollbacks in the healthcare plan, as well as concerns regarding new media. However, IA President Matthew D. Loeb remarked, “We feel we have given our members the best protection we can at a time when the bottom is falling out of a lot of traditional business models.”

Unofficial partial ballot totals posted on the No campaign’s web site showed a wide difference of opinion from local to local, with opposition ranging from 20% to 45% among the 7 locals for which data was available. Turnout was unclear from the figures. The 15 Hollywood-based IATSE locals covered by the contract encompass over 35,000 members.

Meanwhile, the Screen Actors Guild is still in stalemate with the studios, with no evident movement. In NY, negotiations between SAG and AFTRA jointly with the advertising industry continue this weekend. SAGWatch quotes a source reporting “some progress,” which contrasts with indications earlier in the week. That contract expires in ten days.

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