Showbizreporting's Blog

December 19, 2009

Saving the Lives of Own

Hi everyone –

It’s usually much easier to point a finger up as opposed to pointing a finger at an issue, a problem, or those responsible for the problem.

Now that we have kept the long term care facility open for the time being (the operating permit was renewed for another year), it is time to attack the root of the problem. Only in doing that will we be able to return the Motion Picture Home to its once world-class status as a care facility.

I am asking for the dismissal of CEO Dr. David Tillman and COO Seth Ellis. Beginning even before Dr. Tillman’s recommendation that the hospital’s Intensive Care Unit be abandoned, the dismantling of services as well as confidence in the fund would ultimately lead to where we are today – fighting for the future of motion picture and television healthcare.

Did Drs. Tillman and Ellis do this themselves? Of course not, but I feel that the agenda that they continue to pursue, characterized by some as ‘successful aging’, is the death knell to motion picture and television healthcare.

As it is, they have attempted to transition some residents of the long term care unit to Harry’s Haven. Harry’s is an incredible facility for the care and treatment of Alzheimer’s patients. The dilution of the purpose and core competency of Harry’s is what is now happening.

So what will be next?

I’ve written a blog at

http://www.thewrap.com/blog-entry/brighter-side-mptfs-transfer-trauma-12003

I would appreciate your comments and your voices in demanding that a regime change is needed at the Motion Picture Home.

Hope you have a great holiday. 2010 will be our year.

Best

Richard

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November 12, 2009

The Wrap Article – STMPH

Filed under: Entertainment — showbizreporting @ 12:10 pm
Tags: , , ,

Dean Butler – one of the stalwart leaders of our crusade wrote this incredibly eloquent comment to the Wrap’s recent story on their tour of the Motion Picture Home, led by the fund’s spokeshole, Ken Scherer. While Ken was being lambasted unmercifully, this ray of clarity stood out in all the comments. Please leave your own at http://www.thewrap.com/article/tk-9840:

As the holidays approach its time for gratitude and peace, but its not Thanksgiving quite yet so there is still time for plain straight talk.

What a pathetic and revealing interview Mr. Scherer granted over the weekend to The Wrap. Why would the MPTF’s PR Crisis Manager allow it to happen? One could speculate that the force of events has begun to work against the MPTF’s draconian closure decision and now the tone of their words is shifting from arrogant certainty to verbal and body language hoping to evoke sympathy and pity from the community. Unfortunately he reveals his true agenda on the closure when he claims in The Wrap story that he can’t think about what to do with the buildings after the units close because he’s “too emotionally concerned with what ‘to do’ with the patients.” What “to do” with the patients? Scherer and his team don’t see their patients and residents as people to whom they made a promise of lifetime care, but rather as stuff they don’t want anymore.

At first the MPTF resolutely claimed they “had no choice” but to close. Now they’ve made “a few mistakes” and Mr. Scherer expresses concern that the organization’s reputation has been damaged by media and blogs that have publicly challenged the MPTF’s decisions since last January. Just in case you missed the story the MPTF is and has been the villain in this morality tale since the beginning. There is a right and wrong in this story and the MPTF is humanly, ethically, and morally wrong. They hide behind financial shortfalls that nobody believes exist.

Yes, Mr. Scherer, there have been mistakes — like making life changing decisions for residents in a vacuum, commissioning closure studies from consultants who were paid to provide pre-determined results, violating first amendment rights of family members, using social workers to mislead and frighten patients, having the in-house Rabbi comfort frightened residents by telling them “what doesn’t kill you will make you stronger”, placing security guards and studio police cars at entrances to intimidate visitors, banning family members from campus, restricting press access to residents who disagreed with the closure decision, and intentionally locking doors to inhibit the free movement of residents in their home. Now Mr. Scherer is trying to affably distance himself and his fellow managers from their own hardball tactics. Yes, there were many mistakes — now — because their tactics didn’t work. If residents and their families had compliantly moved to other LTC facilities months ago their tactics would be smugly celebrated from behind the closed doors of their elegant Saban Health Center offices.

For Mr. Scherer to blame the media and blogs, such as this one, for the MPTF’s troubles is both delusional and galling. Nobody is responsible for the MPTF’s sinking reputation but MPTF leadership. The MPTF created this issue by abandoning its historic mission of charity. Members of the management team and board may be lying awake at night trying to figure out how their miscalculations destroyed their reputations and the trust our community once had in the MPTF. The good news is that there is nothing wrong with the MPTF’s historic mission. The MPTF’s problems reside in the leadership agendas that abandoned the mission. But management issues can be solved by new faces or, as in the case of Ebenezer Scrooge (a holiday reference), an enlightened view of the future.

Mr. Scherer looked uncomfortable as he tried to find the right words to shift the MPTF’s role from villain to victim. Is this a change of heart or sober reflection on the potentially devastating impact of legal action if the MPTF proceeds on its original course? If MPTF leadership believed they were on solid legal ground, our often disheartening knowledge of them suggests LTC residents would have faced even more aggressive tactics as the October 31 closure deadline approached.

Even as the MPTF bobs and weaves looking for the moral high ground that has eluded them since the beginning of this crisis, our community, in ever growing numbers, continues to support LTC residents who are in jeopardy of loosing their homes. Sadly, they aren’t the only victims of this MPTF misfire. In fact, the residents of the MPTF’s Independent and Assisted Living communities face an equally frightening plight because they live each day knowing that their MPTF LTC safety net is, at present, gone. They are all only one unexpected incident away from loosing their homes and their life affirming contact with spouses, friends and caregivers — a fact that MPTF management has refused to acknowledge. Maybe they’ve just lost sight of what is so clear to the rest of us — eventually most every resident on the Wasserman Campus will need LTC. If they can’t get it at MPTF, Independent and Assisted Living residents will be forced to leave their home…maybe never to return. Is this the new “aging in place” mission in action?

And so the days pass and the perception of winners and losers is giving way to the necessity of survival—for all parties involved. Keep your eyes open everyone…we’re going to be subjected to some fantastic, if not particularly believable MPTF performances in the weeks ahead.

Mr. Scherer, Dr. Tillman, Nurse Ellis, Mr. Mancuso, Mr. Katzenberg, Mr. Koch and all the rest of them who have caused and supported this nightmare are now seeking to stave off their day of legal comeuppance and save their public lives. And frankly, all things considered, we hope they can. In the weeks ahead we’ll be hearing more and more language calculated to release the pressure that’s been building steadily against them…and maybe right around Christmas, Hanukkah and Kwanza, as if by magic, they will find the solution that only geniuses like them could have found…and the home will be saved, the fundraising money will roll again, and all will be forgiven. And Hollywood will have another story of redemption and the community will have gotten what its wanted and demanded all along — a happy, principled resolution to a crisis.

November 3, 2009

Score one for the families

Filed under: Entertainment — showbizreporting @ 8:40 pm
Tags: , , ,

Thanks to the investigative journalism of Steven Mikulan of The Wrap (www.thewrap.com), we now have concrete proof that spokespeople for the MPTF have been lying to the press, to us, and to the motion picture industry.

Score one for the families.

We have always been told that there was a definite date – a deadline of sorts where everyone was to be transitioned out of the LTC. Ken Scherer, one of the funds hapless spokesmen, has insisted that no deadline existed.

The lies that frame the closing of the LTC are now beginning to reveal themselves. The veneer of fraud and deceit are being peeled away like the skin of an onion. Both Scherer and Seth Ellis have been caught with their pants down, as you can see by reading the linked article below.

Are you reading this Jeff Katzenberg? If these people were in your employ at Dreamworks, they’d be summarily fired.

Scherer and Ellis are typical of the problem that motion picture healthcare is facing. It’s not just about the LTC – it’s about entrusting the care of our needy, sick, elderly, infirm and handicapped to these men who play fast and loose with the truth in order to forward their own selfish agendas.

Wake up people who rely on motion picture health insurance – the future of your care are in these incapable hands.

I’ll be surprised if we hear another word from Ken Scherer, unless it’s “paper or plastic?”.

Please pass this on to your friends and fellow industry workers. We will all grow old one day, hopefully. The promise of ‘taking care of our own’ should apply to all who have toiled and sweated on behalf of the motion picture industry.

THE GOOD NEWS IS THIS: WE HAVE BEEN SUCCESSFUL IN OUR EFFORTS TO STOP THE CLOSING – SO FAR. YOUR PASSION AND DRIVE IN EXPRESSING YOUR OUTRAGE AND STANDING WITH THE FAMILIES IS WORKING. OUR JOB IS FAR FROM OVER, BUT WE CAN NOW SEE A LIGHT AT THE END OF THE TUNNEL.

CONGRATULATIONS TO ALL OF US WHO ARE ACTIVELY SEEING THIS THROUGH, SIGNING PETITIONS, AND FACEBOOKING THE HELL OUT OF THIS ISSUE. THE RESIDENTS AND FAMILIES CANNOT THANK YOU ENOUGH!

YOU ARE SAVING THE LTC, YOU ARE SAVING THE LIVES OF THE RESIDENTS, AND YOU ARE SAVING THE FUTURE PROMISE OF A CONTINUUM OF CARE FOR THE MOTION PICTURE AND TELEVISION INDUSTRY.

http://www.thewrap.com/ind-column/how-mptfs-eviction-deadline-shifted-9313

Please sign our petition:
http://www.thepetitionsite.com/1/keepthemptfhomeopen

Best,

Richard

June 2, 2009

Digital Media Law: Actors Commercials Negotiations Detoriate (Mar. 18, 2009)

 

Digital Media Law

 

Actors Commercials Negotiations Deteriorate

Posted: 17 Mar 2009 10:15 PM PDT

Though it gets less play than the stalled SAG TV/theatrical talks, SAG and AFTRA have been jointly negotiating for several weeks with the advertising industry over the commercials contract. That contract is SAG’s second most important, economically, and represents hundreds of millions of dollars per year to SAG alone (I don’t have the AFTRA figures). Now, after industry statements that the negotiations had been going reasonably well, the talks seem to have hit a snag, and the unions may seek a strike authorization vote from their members, reports The Wrap.

The report goes on to say that the unions have already written—and someone has leaked—a draft letter to be sent to the membership of both unions seeking a strike authorization. A separate report in Blog Stage adds that the letter would also include a separate set of pro-authorization talking points, also leaked. (See below for copies of the letter and talking points.) That report cautions that the leaks may be just a negotiating ploy. A statement from SAG and AFTRA described the leak as an “unauthorized distribution of . . . one of many contingency documents that we prepare in the course of any negotiations.”

Nonetheless, I’m guessing the leaks are a trial balloon intended to pressure the Joint Policy Committee, or JPC, representing the advertisers and ad agencies. If the JPC doesn’t move on the issues and if the union membership doesn’t rebel at the idea of an authorization, then we may indeed see an authorization put to a vote of the members. (It’s important to remember that an authorization does not automatically mean a strike, especially since the more strike-averse AFTRA is part of the mix, unlike with the SAG TV/theatrical negotiations, where the more strike-happy hardliners were unconstrained last year.)

So, will the JPC move on the issues in the absence of a strike authorization? Apparently, they often play hardball until a strike authorization vote is held, note the Hollywood Reporter. That seems especially likely today, since the JPC recognizes that SAG is now a fatigued and overextended union, thanks largely to the hardliners’ stalling tactics last year and into January.
 

Those tactics have left SAG actors with virtually no studio theatrical work since June 30 of last year, no increase in minimum compensation levels for TV work (and the theatrical work that does exist), a dramatically diminished share of pilots, and a panoply of expired contracts in other areas. All of this, combined with the state of the economy, leaves SAG members more vulnerable and less likely to support a strike. (AFTRA actors are likewise vulnerable, if for no other reason than the fact that most of them are SAG members as well.) The result is less leverage at the bargaining table for the unions, and more for the JPC.

Speaking of issues, let’s look at the major ones. The fundamental roadblocks are (1) new media and (2) the economy. New media, of course, had been the major stumbling block in the negotiations between SAG and the studios before being at least partially eclipsed by the issue of contract expiration date. Among other things, the current commercials contract apparently has no minimums in new media. The unions want to change that.

As for the economy, it’s reared its ugly hydra-head in several ways. For one thing, the JPC has apparently yet to make an offer regarding wage increases. When they do, don’t count on it to make the unions happy.

On another economic front, the recession has decreased the value of pension plan and individual retirement assets everywhere. In addition, economists worry now about deflation of prices generally, but one area that still features high prices is health care. In this environment of benefits-related anxiety, the JPC is apparently seeking rollbacks and caps on the companies’ contributions to the unions’ pension and health funds. The unions, not surprisingly, want an increase in those contributions.

(Side note: P&H rollbacks also feature in the campaign by some members of IATSE, the union that represents most crew members, to derail that union’s proposed contract with the studios. Ballots are due back tomorrow, March 18—or perhaps have to be postmarked by then, I’m unclear—but either way, we’ll soon know the fate of that agreement. It’s expected to pass.)

Yet another significant issue is a proposal by the JPC to dramatically alter the way residuals are paid for national commercials—so-called Class A residuals. This comes in response to declining viewership of national ads due both to commercial-skipping by DVR users and to audience fragmentation, i.e., viewer migration away from network TV and towards cable TV, video games and the Internet.
 

The JPC says that its proposal is revenue neutral but simply changes allocations—in other words, that some union members would gain (those doing cable and Internet commercials), others would lose (those doing national broadcast network commercials), but as a whole they would receive the same amount of residuals in aggregate. (The same amount as what? As today? As under the union proposal? I don’t have the details, because there’s a news blackout.) The unions appear skeptical.

There’s a multi-way struggle here, by the way, because actors (and other production expenses) are only one aspect of the advertising cost structure. The other, of course, is the cost to air the ads—i.e., the prices that the networks and other outlets charge. That means that the more the networks push to maintain ad prices in the face of declining viewership and a softening ad market (which results from the slackening demand for consumer products), the less money the advertisers can afford to spend on production. Thus, they put the squeeze on actors. In a struggle between networks and actors for piece of the advertisers’ purse, guess who’s likely to win.

So, theatrical production is stalled and likely to stay depressed even after (if?) the stalemate ends, scripted television is eroding, advertising is soft, and the Internet pays everyone (producers and talent alike) mere pennies on the dollar. What’s a thesp to do? “Keep your day job” is too flip a response, but it sure isn’t an easy time to be an actor.

———————

In other Hollywood labor news, Variety reports that SAG interim National Executive Director David White sent SAG members a message today stating that, although no new formal talks with the studios are set, union negotiators are working behind the scenes to achieve a deal. No word on what exactly that means,

Meanwhile, SAG president Alan Rosenberg’s lawsuit against his own union slowly winds its way through the legal system. Rosenberg ’s lawyers filed some documents last week. I doubt they’re significant, but don’t know, because I haven’t seen them. The lawsuit seems, at least for now, to be a mere sideshow, but even defeats at both the lower court and appellate level haven’t deterred Rosenberg and his fellow plaintiffs (1st VP Anne-Marie Johnson and board members Diane Ladd and Kent McCord) from pursuing their now-moot claims.

In another development, the WGA is cutting 10% of its staff, Variety reports. The causes: (1) a recession-caused decline in value of the WGA’s investment portfolio; (2) a reduction in dues-generating work for WGA members, due to last year’s writers strike and no doubt exacerbated by the slow decline in scripted television; and (3) expenses incurred in the so-far unsuccessful attempts to organize reality TV and animation. The WGA had no comment, says Variety.

———————

Subscribe to my blog (jhandel.com) for more about SAG, or digital media law generally. Go to the blog itself to subscribe via RSS or email. Or, follow me on Twitter, friend me on Facebook, or subscribe to my Huffington Post articles.

———————

Here’s the draft letter. The underlined text at the beginning was in the letter as provided; it was not written by me.

 

POTENTIAL DRAFT LETTER FROM UNIONS RE: STRIKE AUTHORIZATION… IF PROGRESS IS NOT MADE, THEY WILL SEEK A STRIKE AUTHORIZATION VOTE FROM MEMBERS.

 

2009 COMMERCIALS CONTRACTS

Strike Authorization Ballot

 

To All Members of Screen Actors Guild and AFTRA:

 

Your AFTRA and SAG Presidents, Joint Board of Directors and Joint Negotiating Committee urge you to read this vital report, VOTE YES and mail your ballot today authorizing your Joint Board of Directors to call a strike in the field of television and radio commercials ONLY IF IT BECOMES ABSOLUTELY NECESSARY to achieve fair and equitable successor agreements.

 

PLEASE NOTE that these negotiations cover all AFTRA and SAG principal and extra performers employed in English and Spanish television and radio commercials. Employment in the following contract areas IS NOT affected by these negotiations: theatrical films, television and radio programs, news, industrial/educational and non-broadcast productions, sound recordings, music videos, interactive programs/video games and entertainment programs made for the Internet or New Media.

 

In today’s economy, SAG and AFTRA members need strong contracts more than ever. The industry is proposing major rollbacks that include:

 

• Significant changes to the compensation model

• A “pilot study” that tests ONLY the industry’s preferred compensation model without an equal study of the unions’ preferred compensation model

• Debilitating reductions in contributions to our P&H and H&R plans

 

Since February 23, your joint AFTRA/SAG negotiating team has been bargaining in New York City with the Joint Policy Committee (JPC) of the American Association of Advertising Agencies (AAAA) and the Association of National Advertisers (ANA) for new, three-year contracts covering the terms of your employment in television and radio commercials. From the first day of the negotiations, it has been our intention to reach an agreement acceptable to both sides. The issues at stake in these negotiations are critically important and require that we bring our full bargaining power to the table by passing this referendum to authorize a strike in the field of television and radio commercials.

 

In 2006, the Industry invoked language in the Commercials Contracts that required the Unions to explore alternate methods of compensation for principal performers in commercials. This led to a seven month, $1.3 million study by the consulting firm of Booz Allen Hamilton (now called Booz & Co.) commissioned jointly by the Industry and the Unions. Booz & Co. recommended a number of alternative methods of compensation including an “Adjusting Tiers” proposal that the Unions favor and a Gross Ratings Points (GRP) proposal favored by the Industry. Booz & Co. also made recommendations regarding the Internet and New Media, including the elimination of free bargaining, which is favored by the unions.

 

Your joint negotiating team has sought to continue the cooperative approach to this process that the Unions have exhibited from the very beginning. The JPC, however, has insisted that the only compensation model open to further exploration is the GRP model – the industry’s favored option. The Industry has also proposed an accelerated timetable for a “pilot study” to test their GRP proposal. At the conclusion of this study, our ability to agree to implementation of the new system would be taken away from us and placed in the hands of a third party consultant.

 

While your joint negotiating team believes it is important to be open minded about the possibilities for adapting our contracts to changing times, we strongly feel that any changes to our basic compensation structure must be pursued with care and deliberation. Further, any changes should only considered after full and unfettered analysis by the unions of the results of a pilot study that evaluates BOTH the Industry’s favored option and ours. We also believe it is important to act on Booz & Co.’s recommendation to eliminate free bargaining and establish minimums for commercials made for the Internet and New Media—a subject the Industry has not addressed.

 

At the same time, the Industry has demanded debilitating rollbacks in contributions to our P&H and H&R plans. By once again proposing a “cap” on contributions, the Industry threatens to eliminate tens of millions of dollars in contributions from our Plans, just as the Plans are suffering through the fallout of the current recession. The Industry also seeks to change the way contributions are made on multiservice contracts, which could even further reduce contributions to the Plans.

 

The AFTRA and SAG commercials contracts provide an important and often critical source of income to thousands of our members across the country. The national commercials contracts set rates and benefits for national commercials and ad campaigns in the major markets and across the country. The SAG and AFTRA commercials contracts support more of our members and their families than almost any other contract.

 

Your joint negotiating team is fully aware of the economic realities we are facing today and the challenges of negotiating in such an environment. However, rollbacks of this magnitude have such negative consequences that they must be met with determination and conviction from our members.

 

Your joint negotiating team will continue to fight for a fair contract and we hope to achieve such a contract without a work stoppage. Management must know, however, that you the members of AFTRA and SAG stand firm and united in your resolve to obtain equitable commercials contracts that do not decimate or negatively affect either of our Health or Pension Plans.

 

Your YES vote on the enclosed strike authorization ballot is necessary to send a strong message of clarity, strength and solidarity to management.

 

———————

Here are the unions’ talking points.

 

EMPLOYER RESPONSE TO UNIONS’ PROPOSALS:

 

• BASIC WAGES—Employers have made no wage offer.

 

• PENSION, HEALTH AND RETIREMENT—Despite the potentially devastating impact of the declining global markets on our Plans, the Employers have offered no increases in contributions and continue to press for “caps,” which will cost our Plans more than $60 million.

 

• CABLE—Employers have not responded to the Unions’ proposal to remove the “cap” on cable units despite a finding by Booz & Co. that cable is greatly undervalued [OR: “is an area of tremendous growth and earnings for advertisers.”]. Nor have they responded to the Unions’ proposal to extend exclusivity and holding fees to cover commercials made for national cable networks.

 

• INTERNET & NEW MEDIA—Employers have not addressed the Unions’ proposals for fair payment structures to replace the current experimental “free bargaining” approach to the Internet & New Media, which fails to provide any minimums at all.

 

• MONITORING—Employers have not responded to the Unions’ comprehensive proposal on monitoring.

 

• LIQUIDATED DAMAGES FOR LATE PAYMENT—Employers have not responded to the Unions’ proposal to increase damages for late payment of wages for the first time since 1978.

 

• SPANISH LANGUAGE—Employers have responded to the Unions’ proposal to rectify the decades-old refusal to pay “Class A” use fees for commercials on Spanish Language networks by proposing to roll back existing protections for Spanish Language performers.

 

• PREFERENCE & EXTRA COVERAGE ZONES—Employers have not responded to the Unions’ proposal to apply the contract to extra performers and to require preference of employment for professional performers in Charlotte , North Carolina and Austin , Texas .

 

• STUNT DRIVERS—Unions have proposed that Employers pay stunt drivers residuals when they sell the Employer’s product. Employers have responded by proposing to narrow the circumstances when stunt performers are entitled to residuals and to make it more difficult for them to file upgrade claims.

 

• SINGERS, DANCERS & CHOREOGRAPHERS—Employers have not addressed the Unions’ proposals to improve working conditions for dancers, to protect singers against automatic renewal at old rates, and to provide a limited ability for choreographers who have done covered work in at least 5 prior years to earn eligibility for benefits.

 

EMPLOYER ROLLBACKS:

 

• ELIMINATE “CLASS A”—Employers have proposed a radical, untested new system for compensating performers in national commercials that eliminates the current “Class A” payment structure, as well as the current structure for national cable commercials.

 

• DECREASE CONTRIBUTIONS TO PENSION, HEALTH, AND RETIREMENT BY OVER $20 MILLION—Employers have proposed implementing a “cap” over which they would not make contributions to P&H or H&R. This will cost the Plans at least $20 million at a time when they are already suffering due to the bad economy. Employers have also proposed changes in how contributions are made on multiservice contracts that will likely further reduce contributions.

 

• OVERTIME—Employers have proposed that overtime apply only after 10 hours worked in a day instead of 8 and that double-time not apply until after 60 hours worked in a week, with no double-time for hours worked beyond 10 in a day.

 

• DOWNGRADES—Employers have proposed changes that will allow downgrades even when the performer’s face remains in the commercial, eliminate the requirement to pay a session fee to a downgraded performer and increase the notice period for downgrades from 60 days to 13 weeks.

 

• HOLDING FEE—Employers have proposed to pay holding fees within 10 days of the end of a fixed cycle instead of by the first day of each fixed cycle, as presently required, postponing not only the payment to the performer, but the point at which the performer can accept a competitive commercial.

 

• STUNT PERFORMERS—Employers have proposed narrowing the definition of “stunt” to require an actual hazard to the performer regardless of the level of skill involved. They have also proposed making it even more difficult for stunt performers to file upgrade claims, including a new requirement to file within 48 hours.

 

• SPANISH LANGUAGE—Employers have proposed eliminating the premium Spanish-language performers must be paid to hold their exclusivity in English-language commercials making it even harder for Spanish-language performers to make a living.

 

• UNION LIABILITY—Employers have proposed that the unions pay them a TRIPLE session fee whenever a performer cancels an engagement on less than 24 hours notice and that the unions play an aggressive role in disciplining our own members for breaching exclusivity.

 

Actors Commercials Negotiations Deteriorate

Posted: 17 Mar 2009 10:15 PM PDT

Though it gets less play than the stalled SAG TV/theatrical talks, SAG and AFTRA have been jointly negotiating for several weeks with the advertising industry over the commercials contract. That contract is SAG’s second most important, economically, and represents hundreds of millions of dollars per year to SAG alone (I don’t have the AFTRA figures). Now, after industry statements that the negotiations had been going reasonably well, the talks seem to have hit a snag, and the unions may seek a strike authorization vote from their members, reports The Wrap.

The report goes on to say that the unions have already written—and someone has leaked—a draft letter to be sent to the membership of both unions seeking a strike authorization. A separate report in Blog Stage adds that the letter would also include a separate set of pro-authorization talking points, also leaked. (See below for copies of the letter and talking points.) That report cautions that the leaks may be just a negotiating ploy. A statement from SAG and AFTRA described the leak as an “unauthorized distribution of . . . one of many contingency documents that we prepare in the course of any negotiations.”

Nonetheless, I’m guessing the leaks are a trial balloon intended to pressure the Joint Policy Committee, or JPC, representing the advertisers and ad agencies. If the JPC doesn’t move on the issues and if the union membership doesn’t rebel at the idea of an authorization, then we may indeed see an authorization put to a vote of the members. (It’s important to remember that an authorization does not automatically mean a strike, especially since the more strike-averse AFTRA is part of the mix, unlike with the SAG TV/theatrical negotiations, where the more strike-happy hardliners were unconstrained last year.)

So, will the JPC move on the issues in the absence of a strike authorization? Apparently, they often play hardball until a strike authorization vote is held, note the Hollywood Reporter. That seems especially likely today, since the JPC recognizes that SAG is now a fatigued and overextended union, thanks largely to the hardliners’ stalling tactics last year and into January.
 

Those tactics have left SAG actors with virtually no studio theatrical work since June 30 of last year, no increase in minimum compensation levels for TV work (and the theatrical work that does exist), a dramatically diminished share of pilots, and a panoply of expired contracts in other areas. All of this, combined with the state of the economy, leaves SAG members more vulnerable and less likely to support a strike. (AFTRA actors are likewise vulnerable, if for no other reason than the fact that most of them are SAG members as well.) The result is less leverage at the bargaining table for the unions, and more for the JPC.

Speaking of issues, let’s look at the major ones. The fundamental roadblocks are (1) new media and (2) the economy. New media, of course, had been the major stumbling block in the negotiations between SAG and the studios before being at least partially eclipsed by the issue of contract expiration date. Among other things, the current commercials contract apparently has no minimums in new media. The unions want to change that.

As for the economy, it’s reared its ugly hydra-head in several ways. For one thing, the JPC has apparently yet to make an offer regarding wage increases. When they do, don’t count on it to make the unions happy.

On another economic front, the recession has decreased the value of pension plan and individual retirement assets everywhere. In addition, economists worry now about deflation of prices generally, but one area that still features high prices is health care. In this environment of benefits-related anxiety, the JPC is apparently seeking rollbacks and caps on the companies’ contributions to the unions’ pension and health funds. The unions, not surprisingly, want an increase in those contributions.

(Side note: P&H rollbacks also feature in the campaign by some members of IATSE, the union that represents most crew members, to derail that union’s proposed contract with the studios. Ballots are due back tomorrow, March 18—or perhaps have to be postmarked by then, I’m unclear—but either way, we’ll soon know the fate of that agreement. It’s expected to pass.)

Yet another significant issue is a proposal by the JPC to dramatically alter the way residuals are paid for national commercials—so-called Class A residuals. This comes in response to declining viewership of national ads due both to commercial-skipping by DVR users and to audience fragmentation, i.e., viewer migration away from network TV and towards cable TV, video games and the Internet.
 

The JPC says that its proposal is revenue neutral but simply changes allocations—in other words, that some union members would gain (those doing cable and Internet commercials), others would lose (those doing national broadcast network commercials), but as a whole they would receive the same amount of residuals in aggregate. (The same amount as what? As today? As under the union proposal? I don’t have the details, because there’s a news blackout.) The unions appear skeptical.

There’s a multi-way struggle here, by the way, because actors (and other production expenses) are only one aspect of the advertising cost structure. The other, of course, is the cost to air the ads—i.e., the prices that the networks and other outlets charge. That means that the more the networks push to maintain ad prices in the face of declining viewership and a softening ad market (which results from the slackening demand for consumer products), the less money the advertisers can afford to spend on production. Thus, they put the squeeze on actors. In a struggle between networks and actors for piece of the advertisers’ purse, guess who’s likely to win.

So, theatrical production is stalled and likely to stay depressed even after (if?) the stalemate ends, scripted television is eroding, advertising is soft, and the Internet pays everyone (producers and talent alike) mere pennies on the dollar. What’s a thesp to do? “Keep your day job” is too flip a response, but it sure isn’t an easy time to be an actor.

———————

In other Hollywood labor news, Variety reports that SAG interim National Executive Director David White sent SAG members a message today stating that, although no new formal talks with the studios are set, union negotiators are working behind the scenes to achieve a deal. No word on what exactly that means,

Meanwhile, SAG president Alan Rosenberg’s lawsuit against his own union slowly winds its way through the legal system. Rosenberg ’s lawyers filed some documents last week. I doubt they’re significant, but don’t know, because I haven’t seen them. The lawsuit seems, at least for now, to be a mere sideshow, but even defeats at both the lower court and appellate level haven’t deterred Rosenberg and his fellow plaintiffs (1st VP Anne-Marie Johnson and board members Diane Ladd and Kent McCord) from pursuing their now-moot claims.

In another development, the WGA is cutting 10% of its staff, Variety reports. The causes: (1) a recession-caused decline in value of the WGA’s investment portfolio; (2) a reduction in dues-generating work for WGA members, due to last year’s writers strike and no doubt exacerbated by the slow decline in scripted television; and (3) expenses incurred in the so-far unsuccessful attempts to organize reality TV and animation. The WGA had no comment, says Variety.

———————

Here’s the draft letter. The underlined text at the beginning was in the letter as provided; it was not written by me.

 

POTENTIAL DRAFT LETTER FROM UNIONS RE: STRIKE AUTHORIZATION… IF PROGRESS IS NOT MADE, THEY WILL SEEK A STRIKE AUTHORIZATION VOTE FROM MEMBERS.

 

2009 COMMERCIALS CONTRACTS

Strike Authorization Ballot

 

To All Members of Screen Actors Guild and AFTRA:

 

Your AFTRA and SAG Presidents, Joint Board of Directors and Joint Negotiating Committee urge you to read this vital report, VOTE YES and mail your ballot today authorizing your Joint Board of Directors to call a strike in the field of television and radio commercials ONLY IF IT BECOMES ABSOLUTELY NECESSARY to achieve fair and equitable successor agreements.

 

PLEASE NOTE that these negotiations cover all AFTRA and SAG principal and extra performers employed in English and Spanish television and radio commercials. Employment in the following contract areas IS NOT affected by these negotiations: theatrical films, television and radio programs, news, industrial/educational and non-broadcast productions, sound recordings, music videos, interactive programs/video games and entertainment programs made for the Internet or New Media.

 

In today’s economy, SAG and AFTRA members need strong contracts more than ever. The industry is proposing major rollbacks that include:

 

• Significant changes to the compensation model

• A “pilot study” that tests ONLY the industry’s preferred compensation model without an equal study of the unions’ preferred compensation model

• Debilitating reductions in contributions to our P&H and H&R plans

 

Since February 23, your joint AFTRA/SAG negotiating team has been bargaining in New York City with the Joint Policy Committee (JPC) of the American Association of Advertising Agencies (AAAA) and the Association of National Advertisers (ANA) for new, three-year contracts covering the terms of your employment in television and radio commercials. From the first day of the negotiations, it has been our intention to reach an agreement acceptable to both sides. The issues at stake in these negotiations are critically important and require that we bring our full bargaining power to the table by passing this referendum to authorize a strike in the field of television and radio commercials.

 

In 2006, the Industry invoked language in the Commercials Contracts that required the Unions to explore alternate methods of compensation for principal performers in commercials. This led to a seven month, $1.3 million study by the consulting firm of Booz Allen Hamilton (now called Booz & Co.) commissioned jointly by the Industry and the Unions. Booz & Co. recommended a number of alternative methods of compensation including an “Adjusting Tiers” proposal that the Unions favor and a Gross Ratings Points (GRP) proposal favored by the Industry. Booz & Co. also made recommendations regarding the Internet and New Media, including the elimination of free bargaining, which is favored by the unions.

 

Your joint negotiating team has sought to continue the cooperative approach to this process that the Unions have exhibited from the very beginning. The JPC, however, has insisted that the only compensation model open to further exploration is the GRP model – the industry’s favored option. The Industry has also proposed an accelerated timetable for a “pilot study” to test their GRP proposal. At the conclusion of this study, our ability to agree to implementation of the new system would be taken away from us and placed in the hands of a third party consultant.

 

While your joint negotiating team believes it is important to be open minded about the possibilities for adapting our contracts to changing times, we strongly feel that any changes to our basic compensation structure must be pursued with care and deliberation. Further, any changes should only considered after full and unfettered analysis by the unions of the results of a pilot study that evaluates BOTH the Industry’s favored option and ours. We also believe it is important to act on Booz & Co.’s recommendation to eliminate free bargaining and establish minimums for commercials made for the Internet and New Media—a subject the Industry has not addressed.

 

At the same time, the Industry has demanded debilitating rollbacks in contributions to our P&H and H&R plans. By once again proposing a “cap” on contributions, the Industry threatens to eliminate tens of millions of dollars in contributions from our Plans, just as the Plans are suffering through the fallout of the current recession. The Industry also seeks to change the way contributions are made on multiservice contracts, which could even further reduce contributions to the Plans.

 

The AFTRA and SAG commercials contracts provide an important and often critical source of income to thousands of our members across the country. The national commercials contracts set rates and benefits for national commercials and ad campaigns in the major markets and across the country. The SAG and AFTRA commercials contracts support more of our members and their families than almost any other contract.

 

Your joint negotiating team is fully aware of the economic realities we are facing today and the challenges of negotiating in such an environment. However, rollbacks of this magnitude have such negative consequences that they must be met with determination and conviction from our members.

 

Your joint negotiating team will continue to fight for a fair contract and we hope to achieve such a contract without a work stoppage. Management must know, however, that you the members of AFTRA and SAG stand firm and united in your resolve to obtain equitable commercials contracts that do not decimate or negatively affect either of our Health or Pension Plans.

 

Your YES vote on the enclosed strike authorization ballot is necessary to send a strong message of clarity, strength and solidarity to management.

 

———————

Here are the unions’ talking points.

 

EMPLOYER RESPONSE TO UNIONS’ PROPOSALS:

 

• BASIC WAGES—Employers have made no wage offer.

 

• PENSION, HEALTH AND RETIREMENT—Despite the potentially devastating impact of the declining global markets on our Plans, the Employers have offered no increases in contributions and continue to press for “caps,” which will cost our Plans more than $60 million.

 

• CABLE—Employers have not responded to the Unions’ proposal to remove the “cap” on cable units despite a finding by Booz & Co. that cable is greatly undervalued [OR: “is an area of tremendous growth and earnings for advertisers.”]. Nor have they responded to the Unions’ proposal to extend exclusivity and holding fees to cover commercials made for national cable networks.

 

• INTERNET & NEW MEDIA—Employers have not addressed the Unions’ proposals for fair payment structures to replace the current experimental “free bargaining” approach to the Internet & New Media, which fails to provide any minimums at all.

 

• MONITORING—Employers have not responded to the Unions’ comprehensive proposal on monitoring.

 

• LIQUIDATED DAMAGES FOR LATE PAYMENT—Employers have not responded to the Unions’ proposal to increase damages for late payment of wages for the first time since 1978.

 

• SPANISH LANGUAGE—Employers have responded to the Unions’ proposal to rectify the decades-old refusal to pay “Class A” use fees for commercials on Spanish Language networks by proposing to roll back existing protections for Spanish Language performers.

 

• PREFERENCE & EXTRA COVERAGE ZONES—Employers have not responded to the Unions’ proposal to apply the contract to extra performers and to require preference of employment for professional performers in Charlotte , North Carolina and Austin , Texas .

 

• STUNT DRIVERS—Unions have proposed that Employers pay stunt drivers residuals when they sell the Employer’s product. Employers have responded by proposing to narrow the circumstances when stunt performers are entitled to residuals and to make it more difficult for them to file upgrade claims.

 

• SINGERS, DANCERS & CHOREOGRAPHERS—Employers have not addressed the Unions’ proposals to improve working conditions for dancers, to protect singers against automatic renewal at old rates, and to provide a limited ability for choreographers who have done covered work in at least 5 prior years to earn eligibility for benefits.

 

EMPLOYER ROLLBACKS:

 

• ELIMINATE “CLASS A”—Employers have proposed a radical, untested new system for compensating performers in national commercials that eliminates the current “Class A” payment structure, as well as the current structure for national cable commercials.

 

• DECREASE CONTRIBUTIONS TO PENSION, HEALTH, AND RETIREMENT BY OVER $20 MILLION—Employers have proposed implementing a “cap” over which they would not make contributions to P&H or H&R. This will cost the Plans at least $20 million at a time when they are already suffering due to the bad economy. Employers have also proposed changes in how contributions are made on multiservice contracts that will likely further reduce contributions.

 

• OVERTIME—Employers have proposed that overtime apply only after 10 hours worked in a day instead of 8 and that double-time not apply until after 60 hours worked in a week, with no double-time for hours worked beyond 10 in a day.

 

• DOWNGRADES—Employers have proposed changes that will allow downgrades even when the performer’s face remains in the commercial, eliminate the requirement to pay a session fee to a downgraded performer and increase the notice period for downgrades from 60 days to 13 weeks.

 

• HOLDING FEE—Employers have proposed to pay holding fees within 10 days of the end of a fixed cycle instead of by the first day of each fixed cycle, as presently required, postponing not only the payment to the performer, but the point at which the performer can accept a competitive commercial.

 

• STUNT PERFORMERS—Employers have proposed narrowing the definition of “stunt” to require an actual hazard to the performer regardless of the level of skill involved. They have also proposed making it even more difficult for stunt performers to file upgrade claims, including a new requirement to file within 48 hours.

 

• SPANISH LANGUAGE—Employers have proposed eliminating the premium Spanish-language performers must be paid to hold their exclusivity in English-language commercials making it even harder for Spanish-language performers to make a living.

 

• UNION LIABILITY—Employers have proposed that the unions pay them a TRIPLE session fee whenever a performer cancels an engagement on less than 24 hours notice and that the unions play an aggressive role in disciplining our own members for breaching exclusivity. 

THE WRAP: MPTF Consultants Gone Wild

The Wrap: MPTF Consultants Gone Wild

 By Andrew Gumbel

An interesting tidbit I’ve just excavated from the audited accounts and tax returns of the Motion Picture and Television Fund: The troubled entertainment industry retirement home and medical network spends close to $20 million a year on what it describes as “professional fees.”
 

That’s a whole lot of money. It’s money that simply does not appear in the accounts of a comparable not-for-profit full-service retirement community in the San Fernando Valley, the Los Angeles Jewish Home for the Aging. (The JHA’s official accounts itemize money for lawyers and accountants and a professional fundraiser, but no other significant professional services.) In fact, it’s enough on its own to cover the gaping deficit the MPTF says has motivated the decision to close down its hospital and long-term care nursing home.

So what are these fees? (You can see the exact audit figures for 2006 and 2007 here.) They have nothing to do with employee payroll, which accounts for close to $60 million annually according to the last available figures. One can only conclude, absent any other explanation, that they go to outside consultants.

 

Now, some of that money — about $5.5 million according to the Fund’s tax returns — goes to pay the hundreds of doctors within the MPTF network who are not direct employees. But what about the $1.1 million listed in the 2007 tax return as “consulting fees”? Or the stunning $13.7 million listed as “management fees”?

 

I’m told by an inside source that at least some of that money went to the Camden Group, the private medical consultancy whose reports paved the way for the decision to close the nursing home and hospital. (Jeffrey Katzenberg, the Fund’s chief fundraiser, told me the MPTF also calls on other consultants, though he did not name them.)

 

Camden has made many other cost-cutting recommendations down the years, but one has to wonder if the advice is really worth the high price tag. As my source, an MPTF employee privy to management decision-making, put it: “I’m sure they pay Camden a hell of a lot more than they save based on what Camden tells them.”

 

And another point. David Tillman, the MPTF’s chief executive, earns around $600,000 a year. If Camden and, perhaps, other consultants, are sucking up all this money and essentially laying out the key executive decisions, how can Dr. Tillman justify his already over-inflated salary? (Molly Forrest, his counterpart at the Jewish Home, earned 35 per cent less than he did in 2007, according to tax filings, and hired no outside management consultants at all.)

 

Ordinarily, I would ask the MPTF for an explanation of the figures and a response to my source’s points. But the MPTF has decided, in its wisdom, to suspend all contact with me. Any time they want to change their minds and explain these apparent peculiarities, I would of course be all ears.


Link to the Article: 
http://www.thewrap.com/ind-column/1607

DIGITAL MEDIA LAW: WHAT DOES THE INTERNET MEAN FOR MOVIE BUSINESS??? (FEB. 23, 2009)

What Does the Internet Mean for the Movie Business?

There’s been a lot of discussion lately about the relationship between the Internet and television. The talk focuses on such sites as Hulu and such issues as whether and/or when the Internet will overshadow television, or whether all television will be Internet based. The debates have been especially fierce in the context of the SAG stalemate, since compensation and residuals are much lower in new media, and union jurisdiction more limited, under the model proposed by the studios to SAG and adopted by the DGA, WGA, AFTRA and the IA.
 

But with all the focus on television and the Internet, there’s been little discussion of late on the relationship between movies and the Internet. Sharon Waxman’s recently launched site The Wrap remedied that somewhat with a panel (and party) Wednesday night. Entitled “Hollywood 2.0: Transformation as Opportunity,” the session was moderated by Waxman, and featured Universal Pictures chairman Marc Shmuger and Yahoo! SVP of U.S. audience Jeff Dossett.

It turns out, according to Shmuger, that the Internet doesn’t mean much at all to the movie business yet. He remarked that the Internet is a “broad marketing tool,” but went on to say that $3 million invested in a TV buy creates more awareness than the same amount invested online. He also remarked that the Internet “is not a key influencer” of audience choice in what movies to see. Rather, it’s number three behind trailers and TV spots.

Dossett, for his part, spoke more enthusiastically, asserting that the “efficiency and reach of the Internet is phenomenal,” and offering as evidence the metric that movie trailers on Yahoo! can receive from one to five million views. He also noted that it was “very unlikely that Yahoo! will create feature length movies.”

Asked what the movie industry can learn from the Internet industry, Shmuger cited that sector’s nimbleness, responsiveness, and “courage to act quickly.” He noted that Hollywood doesn’t have nearly enough two-way communication with the audience.

Discussion of the Internet as a distribution platform, rather than just a marketing tool, was striking for its absence at the panel. Shmuger stated that studios were “not making any real money in the digital world,” and asked “Where’s the beef?” in such transactions. Neither panelist discussed piracy in any depth—an example of the Internet as a highly successful distribution platform, albeit one where no revenue is generated for the content’s legitimate owners.

What I didn’t hear was any innovative ideas on how to use the Internet as a distribution medium that allows a uniquely personalized relationship with each audience member. So, as I left the session and grabbed a few remaining tasty desserts, it was hard to escape the notion that Hollywood might well be repeating the mistakes of the music industry. Let’s hope not.

SAG MAY LOSE IT’S LAST CHANCE (Feb. 20, 2009)

SAG MAY LOSE IT’S LAST CHANCE

Reaction to New Last, Best & Final Offer

February 20, 2009 by Editor.

 

The late move by the AMPTP appears to have taken many by surprise. There’s no statement yet from SAG.

You had to dig for the Los Angeles Times story, but eventually it showed up.

Richard Verrier writes the new Negotiating Task Force’s efforts to reach a deal, “appear to have been thwarted by a tougher-than-expected bargaining posture by studios, which are increasingly impatient as their own businesses are squeezed by a deep recession, said people close to the talks.”

The Wrap: “The (AMPTP) statement suggested that talks have not gone as well as might have been hoped, and dangled the prospect that the studios might begin taking some things on offer off the table if the guild did not take their offer quickly.”

Stephen Diamond’s latest was written before the announcement, but clearly anticipated continued difficulty. He notes that a strike authorization vote is still on the table – and presumably could be voted upon tomorrow.

The Hollywood Reporter: a brief post that misses the point that although the three year term of the contract would commence as of signing (thus eliminating retroactivity), there’s an escape clause if SAG and AFTRA return to joint negotiation on TV-Theatrical.

Jonathan Handel (Digital Media Law) offers an interesting post called “Is SAG Becoming Irrelevant.”

 On substance of the offer he analyzes: “The new Last, Best and Final Offer deletes or modifies several rollbacks contained in the previous AMPTP offer, which had been on the table since June 30, 2008—approximately eight months ago—when the 2005-2008 union agreement expired. Other than the removal or modification of rollbacks (which I had anticipated, see secs. 3(d), (e) & (F) of this post), the new offer contained no significant improvements over the previous offer (SAGWatch has a nice summary). Both the previous and new offer contain improvements over the 2005-2008 agreement, such as approximately 3.5% increases per year in union TV and theatrical minimums.”

Handel also casts his post in terms of SAG vs. AFTRA, pointing to a Hollywood Reporter story noting that this pilot season has seen producers of most pilots signing AFTRA contracts.

Editor’s thoughts: the AMPTP’s hardliners appear to be in control, and either their frustration level is apparently at a high level or it’s a coldly calculated move to exploit the divisions within the union. It’s important to remember that the AMPTP has factions just like we do – check out this on Bloomberg, which appeared at about the same time as the new AMPTP offer.

 And it’s also important to read the words the AMPTP used carefully. Although they characterized their latest (again) as a “last, best and final” offer, instead of threatening to impose the offer after 60 days, the AMPTP statement says it may be withdrawn or changed after 60 days. That gives some credence to those who pointed out that there were several “last, best and final” offers during the WGA negotiations and strike.

Tomorrow’s National Board meeting should yield some fireworks. However, though it seems against the odds, all this could help unify SAG, at least in the short term.

The Wrap: Part 2 – As Elderly Are Displaced, MPTF CEO MAKES $ 600,000 (FEB. 9, 2009)

By Andrew Gumbel

http://www.thewrap.com/article/1329?page=2
 
 The administrator of the Motion Picture & Television Fund’s troubled retirement home in Woodland Hills commands a salary well in excess of half a million dollars a year, including a 20 per cent pay raise he was awarded shortly before the home announced that in order to avert bankruptcy, it was kicking out more than 100 infirm residents.
 The salary figures for Dr. David Tillman, the MPTF’s chief executive, and other top officials are not widely known among the health-care workers and residents’ families now protesting the decision to shutter the MPTF’s long-term care facility and hospital before the end of the 2009.
 They are, however, publicly available via the MPTF’s tax filings, and reveal numbers several times higher than is normal in the world of non-profit retirement homes – not to mention higher than the cap President Obama placed last week on the salaries of corporate chief executives receiving federal bailout money.
Tillman earned $502,200 in 2006 – when, according to MPTF officials, if not according to their own audited accounts, the home was already aware of a looming financial crisis. That salary figure then ballooned to $596,957 in 2007, the last year for which figures are available.
 
The MPTF’s chief financial officer, Frank Guarrera, saw his pay jump from $359,162 in 2006 to $411,153 in 2007. Taken together, the two men earned well over $1 million.
 
“That’s absolutely exorbitant,” said nursing-home expert Betsy Hite of the California Association of Health Facilities. “The average nursing home administrator makes maybe $100,000. This is clearly out of the norm. People who typically care for the elderly do it because of a calling in their heart, not a calling to the bank.”
 
The MPTF’s own audited accounts show that total salaries and related expenses came to  a staggering $60.7 million in 2007, up from $58.9 million in 2006.  Although exact employee numbers are not available – the fund did not respond to requests for the figures – the United Healthcare Workers union represents 573 full- and part-time workers at the home. Assuming the fund employs another 100-200 people, that means the average annual income comes to somewhere in the $80-$90,000 range.
 
That kind of money is not going to licensed nurses, who earn about $25.50 an hour plus another $9 an hour in benefits, according to California HealthCare Foundation figures. Nursing assistants earn around $17.50 an hour.
 
One financial expert unconnected to the home, who did not wish to be named, commented: “How on earth can they justify $60 million per year in salaries? That’s insanely high. They’re not an investment bank, they’re a retirement home.”
 
The executive salary figures have provoked astonishment among residents’ families now campaigning to keep the long-term care facility open, and among United Healthcare Workers officials worried about the announced lay-off of an estimated 240 staff at the home.
 
The figures are also likely to raise eyebrows in the wider Hollywood community, since they represent a signficant portion of the charity funds raised, say, at Jeffrey Katzenberg’s annual pre-Oscar Night Before gala, which hauled in more than $6 million in each of the past two years, or at any of the other benefits held for the home and its residents.
 
“I think it’s obscene when highly paid administrators are crying the blues about lack of funding to keep infirm, elderly residents in place,” said Richard Stellar, an activist whose 91-year-old mother is one of the long-term care patient targeted for eviction. “I’m also disappointed that Dr. Tillman – a doctor — is doing the bidding of a board that has put a price on the heads of these people.”
 
The elevated salaries are just one piece of a growing puzzle about the MPTF and the financial crunch it says has motivated the closures. As TheWrap reported yesterday, the MPTF’s own accounting figures and tax returns show no sign of the $10 million losses mentioned in the fund’s press releases and public statements. While the MPTF says its reimbursements from Medicaid and MediCal have been going down, its tax returns show that receipts from the government in fact increased in both 2006 and 2007.
 
Even before TheWrap revealed those figures, the UHW and residents’ families complained they had not received the proper explanation they feel they were owed – particularly since the closure announcement came completely out of the blue.
 
“There’s no transparency,” Stellar said. “The residents are people who have given up pensions, social security payments and so on to get into the home. They all have a financial stake in the Motion Picture home, yet they got no report from the board that the fund was in trouble.”
 
News of the closures has created at least a temporary desire in many people to open their pocketbooks if it can still make a difference, but it is far from clear whether the MPTF is welcoming their initiatives.  Union officials said they had heard stories of people offering money in the past few weeks specifically to the long-term care facility, only to be told that they have to contribute to the general fund instead.
 Saratoga Ballantine, co-director of a forthcoming documentary about residents of the MPTF home entitled Troupers, said she felt sure Hollywood would rally to the cause if asked. “Someone should take a big ad out in Variety,” she said, “and appeal to those $20 million-a-movie people, people who have the money, to save their own. It’s always been about actors coming forward to save their own.”
 
 Certainly, plenty of prominent actors, writers and directors are expressing their displeasure. Elliott Gould, an actor who cares passionately about the health and retirement benefits offered by the Screen Actors Guild and other Hollywood unions, told TheWrap he found the news “sad, depressing, ominous and disappointing, to say the least”.
 “The home was a shining beacon of an accomplishment that is certainly being eliminated and taken away from us,” Gould said.
 Activists are planning a candlelight vigil outside the home Wednesday night, starting at 5 p.m.
 Residents themselves have been shy to speak out and highly reluctant to invite reporters to visit them on the campus. “What can we do?” retired actress and MPTF resident Connie Sawyer said by telephone. “It’s all over… It’s gone. There is no point in you coming out here.”
 According to Stellar, fear is now rampant, even among those in independent housing who are still fit and healthy. “People are scared shitless,” he said. “Some of them think people are going to come for them in the middle of the night. At that age, folks are very fearful about what small time they have left on the planet.
 “They had one comfort left – that they are in a place where they can live out their days. That’s now been taken away from them.”

The Wrap: Part 1 – MPTF Residents Despondent ~ Six Have Died Since Closure Announced!!! (Feb. 8, 2009)

PART 1: MPTF residents despondent: six have died since closure announced!!!

Part I: MPTF residents despondent; six have died since closure announced
Tax returns, audits contradict stated reasons for hospital shuttering

Mary Stellar, pictured here with her son Richard, is a resident of the MPTF long-term care facility; in earlier years, she worked as an assistant to Cubby Broccoli, the James Bond producer. (Inset: Mary at a special screening of “A View to a Kill” on the MGM lot in 1985.) Photo: Andrew Gumbel

By Andrew Gumbel
PART ONE OF TWO PARTS

http://www.thewrap.com/article/1316?page=1

When the Motion Picture & Television Fund announced last month that it was shuttering the long-term care facility and hospital at its Woodland Hills retirement home – effectively ending the comprehensive care it once provided to aging actors, studio employees and film technicians — it painted a dire picture of itself as a charitable organization on the brink of financial ruin.

The foundation established by Mary Pickford and Charlie Chaplin 87 years ago said it was losing $10 million a year because of ever-diminishing Medicaid and Medi-Cal reimbursements to its elderly residents, and risked depleting its endowment completely within a few years if it did not act immediately to stanch the flow of red ink.

There is, however, a major problem with that explanation: it does not appear to be entirely true.

The numbers being bandied about by Jeffrey Katzenberg, the MPTF’s chief fundraiser, and other officials do not square with the organization’s own official accounting numbers and tax returns.

Those documents – the most recent filed with the Internal Revenue Service in November 2008 – show no $10 million losses, or any losses at all. The fund’s assets – described in one press release as “draining… at an alarming rate” – actually increased in 2006 and 2007, the last year for which figures are available.

And while it is true that Medi-Cal reimbursements have indeed declined since last summer for hospital care (though not for other medical and nursing-home services), the fund’s accounts show a net increase in government reimbursements for both 2006 and 2007.

One nursing care expert who has looked closely at the reimbursement numbers, Betsy Hite of the California Association of Health Facilities, characterized the MPTF’s explanation of the closures as “hogwash.”

Officials from the United Healthcare Workers union, which concluded a nine-month long contract negotiation with the MPTF last April, said they researched the fund’s finances extensively and found no cause for concern.

The MPTF opened a new state-of-the-art gym and fitness facility, the Saban Center for Health and Wellness, in July 2007. The multi-million dollar project seems inconsistent with an organization in financial trouble.

The MPTF itself offered no comment to TheWrap when challenged on the apparent discrepancies. Fund officials were given several opportunities – both over the phone and in writing – to explain their accounting figures and refute the allegation that they were not telling the truth about them. But they chose not to, saying only: “We are not doing any more interviews on the subject.”

The closures, announced without warning last month, have provoked widespread consternation inside the home itself, as well as in the entertainment community at large.Many in Hollywood have privately expressed outrage and embarrassment at the impression that the entertainment industry cannot take care of its own.

Jeffrey Katzenberg, the DreamWorks Animation Chairman who heads an annual fundraiser at this time of year for the MPTF Foundation, has felt it necessary to offer public explanations, though he has done so only on Nikki Finke’s Deadline Hollywood blog, where he refused to be quoted.

Some of the 100-plus frail residents threatened with removal to other facilities before the end of 2009, many of them in their 80s and 90s, feel “tormented” and are reluctant to eat, according to a letter sent by several MPTF families to the home’s chief executive, David Tillman.

A tour last week of the long-term care facility revealed an impeccably kept home, where even the most infirm residents — who spend the day in wheelchairs or loungers — have their hair done every morning and have make-up applied to their faces if they or their families request it.

The anxiety, however, was also immediately obvious. The closures were the number one topic of conversation among nursing staff and those residents lucid enough to understand what is happening. One woman took to her bed as soon as she heard she was being evicted and refused to get up again for a week, according to nursing staff. Another, who had been in apparently good health, died very soon after getting the news.

In all, at least half a dozen residents have died since the closures were announced – a far higher death rate than usual. “Some have stated that they do not want to live if they have to leave their home here; they prefer to die right now without going on to some other place,” the letter sent to David Tillman said. Tillman declined to be interviewed for this article.

Residents and their families say they are in touch with a heavy-hitting Los Angeles law firm and are looking into a lawsuit to force the MPTF to keep at least the long-term care facility, if not also the hospital, open. Richard Stellar, a web marketing designer whose 91-year-old mother Mary is one of the threatened residents, has been involved in the protest efforts and says his only wish is for the home to do the right thing.

“I think they do have genuine concerns about the future of the fund, and genuine concerns about how to operate in California because this state is in a lot of trouble,” Stellar said. “Medi-Cal payments may not be as robust as they once were. But the MPTF is not the only game in town. Other places are facing the same acute challenges but are not throwing anyone out.”

The MPTF’s explanations for the closures  at its long-term care facility and hospital at its Woodland Hills retirement home – and the lay-off of one-third of its total staff — have raised eyebrows, and questions about the true motivation, since the first news release on January 14.

 

The official release presented an apparent inconsistency by saying, on the one hand, that the MPTF was suffering $10 million deficits and had already been forced to dip into its investment reserves to make up the shortfall. But the release also quoted Katzenberg chairman who chairs the MPTF Foundation board as saying the problems were mounting fast but that the fund was still “in good shape today.”

The accuracy of the release was further called into question when Katzenberg summarily fired Allan Mayer, the crisis management consultant who wrote it. However, when Katzenberg spoke to Finke, he painted, if anything, an even gloomier picture.

Katzenberg reaffirmed the existence of $10 million deficits and said the MPTF board had known the closures were coming “for years.” He said the reason the fund had not raised the alarm earlier was “for all the right compassionate reasons.”

Since then, Tillman and other MPTF officials have pushed another line of argument. It was impossible to make the acute-care hospital cost-effective, they said, because it had no more than five or ten patients at any one time, but needed to maintain a full staff to comply with state licensing laws.

They thought about closing the hospital and keeping the long-term care facility open, but without the hospital the home would fall into a different funding category and Medi-Cal reimbursement rate for home residents would go down to an untenable level.

“I can assure you our board and our finance people know how this works with the state,” MPTF spokeswoman Jennifer Fagen said. “This is not something anyone wanted to do.”

The explanation has not passed muster  with many nursing-care experts and residents’ families. Hite, the California Association of Health Facilities expert, said it beggared belief that a home could lose $10 million a year when its Medi-Cal reimbursements were well over the state average — $320 per patient per day, compared with a state average of $223 per day, according to figures compiled by the California HealthCare Foundation. The MPTF receives about 80 per cent of its patient care funding from Medi-Cal.

Hite also explained that reimbursement rates for reputable homes have actually increased since 2006 under a new payment regime negotiated with Governor Arnold Schwarzenegger. The new policy  rewards institutions that invest in improved care and punish those that proverbially “water down the orange juice” in an attempt to keep more government money for themselves.

“Most nursing homes are doing quite well, if they are well run,” Hite said.

That analysis appears to be borne out by the MPTF’s own tax returns, which show an increase in “program service revenue including government fees” from $65.4 million in 2006  to $74 million in 2007.

Medi-Cal payments are now under threat because of California’s budget crisis, but most of the threatened cuts have yet to be enacted. A successful lawsuit filed against the state last summer prevented a 10 per cent cut in Medi-Cal payments from going into effect in all areas of care except for hospitals. Although there is now talk of new cuts for 2009, a budget deal is still pending in Sacramento.

The accounts and tax returns suggest the MPTF wasn’t in fact in trouble at all – at least not until very recently. Accounts prepared by PriceWaterhouseCoopers last May and posted on the MPTF’s own website show that in 2007, revenues exceeded expenditures by $16.7 million. The fund’s net assets, meanwhile, grew over the year from $154 million to $168.8 million.

Figures filed with the IRS in November are slightly different but follow the same basic pattern. The MPTF’s Form 990 return – a publicly available document — shows an excess of $10.6 million in revenue over expenditure for 2007. The fund’s assets are shown to have grown from $158.6 million at the beginning of the year to $171.7 million at the end.

These figures do not, of course, tell us what happened to the MPTF during the Wall Street meltdown in the last four months of 2008. The Mayer-authored press release said the fund was now worth less than $130 million. Katzenberg told Finke much the same – that the fund had lost 30 per cent of its value.

 Many people have asked the MPTF if it did not make some catastrophic investment now threatening its existence. Katzenberg personally lost millions to the fraudulent investment advisor Bernard Madoff, but the fund itself has denied any involvement with Madoff. It has given nothing else away about its investments.

Quite what is behind the abrupt closure announcement remains a mystery. In the absence of a widely accepted explanation, rumors are naturally abounding — everything from involvement in a Madoff-type Ponzi scheme to a Chinatown-style secret land deal. All of this is, however, pure guesswork. MPTF executives have told residents that they are planning to replace the hospital and long-term care facility with an assisted living condo complex, although they have made no public announcement. The financial details of such a building project also remain unknown.

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