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Part I: SAG/AFTRA/AMPTP Overview: Calm Down. There Will Be No Strike Sequel.

PART II: The Details That The Moguls Don’t Want You To Know

Every time I think of the way that Hollywood handles its guild negotiations, I’m reminded of that Jurassic Park 2 scene where Jeff Goldblum warns everybody: “Oooh, ahhh — that’s how it always starts. Then later there’s running and screaming.” That happened even before the writers went out on strike for 100 days. And it’s happening now to the actors.

As soon as the striking Writers Guild went back to work, the Hollywood moguls and Screen Actors Guild secretly held their first confabs. In late February, SAG national president Alan Rosenberg and national executive director Doug Allen had a meet-and-greet with Disney CEO Bob Iger. Then, the guild duo agreed to confer again with Iger plus News Corp No. 2 Peter Chernin (the pair credited with back-channelling their way to a WGA strike settlement). This was exactly what SAG leadership had told members they would do: hold informal get-togethers with the moguls to lay groundwork for formal bargaining. 

But the March 3rd sitdown didn’t go well. As a source told me, “When the SAG guys said they’re not going to accept the DGA or WGA deal and want to renegotiate DVDs and New Media, Peter said, ‘Then I guess we have nothing to talk about.’” Rumors immediately spread that the “two Allens” had blown it by being hotheads. SAG tried to set the record straight. ”The tone and tenor is completely false. There was no hyperbolic rhetoric. Conversations were cordial and constructive.”

It was then that the Hollywood CEOs came to a collective decision about how to proceed with the SAG negotiations. Had the Big Media managers been interested in a quick settlement, they would have agreed that Chernin and Iger go back to backchannel bargaining. Instead, the moguls decided to change up the way they would conduct the contract talks for Hollywood’s biggest union: they decided to hand the negotiations back over to their AMPTP. In other words, back to Nick Counter for his last hurrah as the cartel’s negotiator, and back to the studios’ and networks’ labor lawyers who had grown increasingly restless for more control over the process. In fact, several moguls have admitted to me that, since then, they haven’t even bothered to read the memos that their labor lawyers file each week. “I told my people, ‘Don’t bother me unless there’s a breakthrough,’ ” one studio bigwig informed me. 

The result is that Counter and this crew have been running every facet of the SAG-AMPTP negotiations right now. Little wonder that they’re stalemated. And the moguls have been content to view the status of the talks through their reps’ prism, no matter how skewed. In fact, one studio boss didn’t even give it a second thought when he received a late April memo from his labor negotiator that warned, ”We believe that if a deal can be made with SAG without a strike, the earliest we’ll conclude it will be July 15th.”

Frustrated, Doug Allen met four weeks ago with Bob Iger and CBS boss Les Moonves in the Disney honcho’s NYC office. There were some discussions of issues like New Media, product placement, clips consent for New Media, and DVD residuals. But the message conveyed by the moguls was a deliberate brush-off, according to both sides, along the lines of: ”Guys, let the process continue. The CEOs are not going to get involved unless its June 24th and everyone is close to a deal. Then they’d roll up their sleeves. But they need to hear that or else they don’t plan on getting involved.” A SAG source found the implication “disturbing”, and even more so when AFTRA breezed through its talks with the AMPTP and reached a deal in a scant 17 days. It was deja vu writers strike all over again, only this time AFTRA was playing the DGA’s role and SAG the WGA’s.

So the Two Allens went to visit the different moguls in their corporate enclaves. Once again, the SAG leaders’ request for the Hollywood CEOs to get involved in the talks fell on deaf ears. As a mogul explained to me, “We did AFTRA in the room. We did the DGA in the room. It’s the preferable way of doing it. That’s what their job is. This is not supposed to be done by us per se.” 

Word leaked out to the media about SAG’s June 2nd meeting at Sony Pictures Entertainment in particular, and a studio spokesman issued this statement, “There was a frank and cordial exchange of views, and we said how important it was to the industry that a deal be reached as soon as possible. And the best way to do that is by negotiating with the AMPTP, so we hope everyone’s energies can be focuse in that direction.”

At Sony, Rosenberg and Allen sat down with SPE chairman Michael Lynton, considered a moderate among the moguls, and Jean Bonini, seen as a militant among the labor lawyers. Among the points made by the Two Allens were their extreme disappointment that the moguls decided to negotiate first with smaller AFTRA and leave bigger SAG hanging. Lynton expressed disapproval at SAG’s intent to oppose the AFTRA contract. “Our view was that the best place to focus their energies would be in the AMPTP negotiations,” a Sony insider told me.

And when Rosenfeld and Allen this time asked the moguls to get individually involved because the AMPTP seemed to be engaged in delaying tactics, the SAG duo were turned down cold. “This was not in any way a separate negotiation,” a source explained. “It’s a one-time courtesy meeting and no others are expected.” When told that strategy would lead to a longer de facto strike, not a shorter one, the moguls exhibited no sense of urgency. Called on that by the SAG pair, Lynton turned angry and pounded the table with one hand, ‘Do you think I like having my production facilities idle?” 

All the more reason it came as a huge surprise to SAG leaders when, on June 18th, a story on the Variety website was posted under the headline, “Chernin, Iger May Resume SAG Roles.” Doug Allen immediately reached out to Iger and left the CEO a message asking whether it was an invitation. Iger called him back five days later and reiterated that the moguls were not getting involved this time around. (“That Variety story was just flat-out wrong,” another Big Media bigwig told me. Not surprising since its author Dave McNary kept writing untrue articles during the WGA strike.)

In fact, Iger and Allen had a prickly conversation. I’m told that Iger said, “Why don’t you just take what the writers and directors took.” To which Allen responded, ”Just because we’re the last ones at the table doesn’t mean we don’t get our turn at the table. Actors have particular issues that are not dealt with in the DGA or WGA deals or because we cover 100% of motion picture actors.”

There have been no mogul/Allens communication since, I’m told.

So right now the studios and networks claim to be counting on its AMPTP negotiators even though, during the starting day of the AMPTP-SAG official negotiations, ”the first thing that came out of Nick Counter’s mouth was, ‘These proposals are unreasonable. Well, I guess you’d better prepare for a strike.’ ”

Before talks began, the dilemma for the AMPTP all during the writers strike had been the incessant murmuring throughout Hollywood to “Wait for SAG”. Because as the biggest and most powerful Hollywood union, SAG earnings over the last three years of its 2005-2008 TV/theatrical contract is more than $4 billion in earnings to actors. Somehow the AMPTP had to undermine the union’s strength. The employers’ cartel found a willing and ambitious collaborator, AFTRA. whose total earnings over the last 3 years on the same contract totaled only $40 million. (FYI: no one officially from AFTRA has yet to email me disputing this figure or any of my reporting.)

Whatever AFTRA negotiated or didn’t negotiate should have been a mere afterthought. Instead, the AMPTP and AFTRA (both of whose statements to members and media at times have been nearly identical) claimed that the smaller union’s tentative deal should be the template for SAG in these negotiations. “On what planet? Well, one where AFTRA wants to undercut SAG rates and sell out actors to secure more jurisdiction,” one SAG insider bitches. “For all the cries that SAG is the membership first guild, AFTRA’s weak deal makes it the producers choice. SAG really is the only true union actors have. The AMPTP’s strategy is to make AFTRA a low-cost union alternative.”

Of course, the moguls tell me they won’t exploit AFTRA’s new contract to give it preference over SAG for jurisdiction over new TV shows. Oh, puh-leeze. “I suppose we could. It’s doubtful. But it could happen. I don’t see us trying to stick it to SAG. But it is in our rights to do that,” one network honcho mused to me. If that starts to happen, SAG pledges to switch into “super high-outreach mode’”. It doesn’t help that the AMPTP walked away from the table in May in order to make a deal with AFTRA. Few people know that, when talks were resumed between the two sides after the enforced hiatus, the AMPTP refused to even offer the big actors guild either the WGA deal or the AFTRA deal. Instead, the Big Media cartel forced SAG to negotiate up from ground zero for weeks on end so that only as of now is the lousy AFTRA deal even close to being on the table. How is that fair pattern bargaining?

“Since returning to bargaining with SAG, the employers have dragged everything out in order to slow the pace of negotiations while furiously dialing the media to background them on how the SAG team is not taking it seriously,” a SAG source tells me. ”Doug and Alan are really just disappointed in these people that they’re truly are so juvenile. They’re not willing to even make the deal they made in the past. Why does the union submit to this process when it’s such a colossal waste of time? These weeks have been just what anyone might expect: so completely predictable, so unoriginal, and so boring. And there’s no one in authority at AMPTP to make a deal.”

SAG insists it has made concessions on a number of terms and will tweak some more. The biggest surprise came three weeks into the process when SAG agreed to withdraw its demand to double residuals from DVD sales and instead ask for what would effectively be a 15% hike in DVD pay. But SAG complains that the AMPTP has not made counterproposals to SAG’s proposals. “Truly, they have not tried to negotiate at all,” a SAG board member gripes. “Obviously, their only job description is ‘Don’t make a deal.’ ”

While Nick Counter’s methodology is to craftily and contemptuously maneuver the unions into negotiating against themselves and taking issues off the table just for the promise of AMPTP bargaining, he and the other reps go on and on inside the talks about how there’s nothing they’d like more than to be partners with SAG. To which a SAG board member responded to him one day, “There’s nothing about what you’ve done over the last 3 years that suggest you want to be partners.”

The AMPTP also constantly makes comparisons during the talks between actors cira 1997 and 2007 in terms of earnings. But that sparks SAG to snark, “Are you now going to announce how much the corporations made in 1997 versus what they made in 2007?”

SAG leadership, rightly or wrongly, have refused to go public with their many complaints during much of the negotiations with the AMPTP. However, the moguls keep using the mainstream media and the trades as its mouthpieces. So both sides sit down together and try to bargain, but it’s the AMPTP’s news claiming SAG is stalling that gets play. The AMPTP also sends out stealth press releases bashing SAG. This tactic was used on the WGA as well. Most recently, SAG and the AMPTP sat in negotiations going over the guild’s new media proposals which SAG had just changed. “And no one even made mention of the press release brutally badmouthing SAG. To get around the media blackout, the AMPTP sent it to company members and didn’t put it on website,” the actors guild member recalled.

Still, overt acrimony is being kept to a minimum, so the mood is outwardly cordial. Much of that is due to the personality of Doug Allen, whose even temper and friendly demeanor is disarming to Nick Counter. Despite his encyclopedic command of contract minutiae and his physically imposing size dominating the proceedings, Allen ”knows when to stand down and let others handle areas that are their expertise” like John McGuire, SAG’s senior advsor based in New York whose specialty is product integration. “That confidence comes from Doug dealing with the NFL on multi- multi-million dollar contracts.”

However, the WGA’s Dave Young was a far better labor organizer. The actors have yet to use YouTube effectively for their side, which the WGA did so cunningly, or many of the other PR weaponry available to the communications-savvy . For instance, there’s only been one big SAG solidarity rally — and that was demeaned as little more than the debut of its anti-ratification Down With AFTRA drum-beating. Nor have the actors turned the New Media boasts of the Hollywood CEOs and their Big Media parents against them. 

SAG also has not adequately explained to members what the guild sees as its leverage opportunities now. SAG has long felt that pressure from within the shutdown movie industry would beat the AMPTP. Because if this is drawn out by employers, then some Oscar-worthy films may not be completed in time to screen them for the Academy Awards.

But probably no single planned event had more impact to end the WGA strike than when both SAG and the WGA planned to meet with CBS institutional investors and complain. Here’s what happened: CBS Inc boss Les Moonves had an off-the-record dinner during the strike he later described to pals as “extremely pleasant and productive” with WGA leaders Patric Verrone and David Young at the Four Seasons Hotel in Beverly Hills. A few days later, the mogul returned to NY only to discover that Young had helped organize a conference to talk to CBS institutional investors about how much the strike was costing and how much the corporation was losing as a result. “David, we just had a terrific dinner. This will not be helpful to bring in the investor community and tell them your side. I’m asking you to call it off,” Moonves said in an urgent phone call to Young. The guild executive director would only cancel the meeting if Moonves pledged to pressure the rest of the moguls for a quick end to the strike. Moonves did, and Chernin and Iger got the media credit. Blackmail is a sound strategy that SAG could use on the Big Media companies this time around. 

In addition, the big actors guild can try to leverage Big Media’s hefty force majeure liability payments ranging from $10M to $60M per company left over from the writers strike and still owed to SAG, which has offered to engage in reasonable settlement talks with the AMPTP only if progress on the contract is made. ”It’s a huge liability that the companies are worried about,” a SAG board member explained. “The employers reneged on the collective bargaining agreement and even changed the language in the contract. But our attorneys have been winning arbitrations on most of these issues.”

So the sooner the moguls take over their contract talks with SAG, the sooner all of Hollywood can get back to work.

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