How Audacious Is SAG-AFTRA’s Subscriber Payment Ask, Actually?

When SAG-AFTRA talks ended abruptly on Wednesday, Oct. 11, swiftly taking the trade’s excessive hopes for an imminent finish to the actors’ strike with it, probably the most important sticking level left on the desk was the union’s proposal to cost a price per streaming platform subscriber.

The ask, a revised model of a earlier revenue-sharing proposal that the Alliance of Movement Image and Tv Producers had rejected, prompted hyperbolic remarks on each side. “A bridge too far” stated Netflix co-CEO Ted Sarandos, whereas SAG-AFTRA’s chief negotiator conversely deemed the adjusted proposal a “enormous, enormous concession.” The studios claimed the proposal would price greater than $800 million per 12 months, whereas the union fired again that the aforementioned estimate was “deliberately misrepresented” by the businesses and overstated by 60 p.c.

Not in dispute is the framework of what the actors guild is asking for. The present SAG-AFTRA proposal would multiply the variety of world subscribers on a platform every quarter by the share of content material considered on that platform coated beneath a SAG-AFTRA settlement and by a value issue of 27.6 cents per quarter. That finally ends up amounting to lower than 57 cents per subscriber per 12 months, the union maintains, because it doesn’t cowl all content material on the platform (the studios declare the union proposed $1 per subscriber per 12 months within the negotiating room and later reduce the determine). The cash generated by this association would then go right into a fund managed by representatives from each SAG-AFTRA and administration, whose trustees would decide the way to distribute the funds. It’s nonetheless to be decided whether or not viewership metrics would play a task in that distribution and which performers could be eligible to obtain fee from the fund (for instance, would stunt performers or background actors get a share?), which might be topic to negotiation.

Given the allegations of unreasonableness from each side, how novel and audacious is the actors’ ask, actually?

In monetary phrases, it’s a definitely daring. If 57 cents per subscriber per 12 months finally ends up being the ultimate determine, that may price studios round $500 million per 12 months. That’s practically 4 instances the $126 million in residuals paid out to SAG-AFTRA members in 2022 (studios worth their present proposals package deal, with out this provision included, at over $1 billion). In an interview with The Hollywood Reporter, Crabtree-Eire says that 57 cent determine was by no means a “bottom-line quantity” and that he inspired studio CEOs and AMPTP president Carol Lombardini to counter on this determine on Wednesday, earlier than administration walked. Based on USC Marshall College of Enterprise adjunct professor Sanjay Sharma, who teaches finance and enterprise economics and administration and group, at 57 cents, this sum wouldn’t be the “untenable financial burden” that the AMPTP represented it as. “Should you take a look at Netflix’s manufacturing prices proper now, we’re at about $16 billion. So from that perspective, $400 million is an Avatar[-type] manufacturing price, or one blockbuster film that didn’t work,” he says.

Nonetheless, the bigger enterprise context that leisure corporations are going through stays a serious roadblock. “You’re placing a toll, a tax, on one thing which is already shedding cash,” Sharma provides, explaining that the majority streaming platforms usually are not but worthwhile and that leisure companies’ shares are within the doldrums due to their constructions. Furthermore, studios are possible cautious of making a precedent with SAG-AFTRA’s contract that separate leisure unions will ask for in future negotiations — like IATSE and the Teamsters, which have main negotiations with the AMPTP in 2024.

Maintains Crabtree-Eire, “From our standpoint, there should be a type of base degree compensation for the contribution that our members are making to the existence of those platforms, to constructing these platforms. And admittedly, in mild of their total revenues, we expect that this quantity is sensible within the context of the trade. And we expect what’s being paid now by way of streaming residuals is completely far too low.”

Within the bigger context of the labor motion, income share is definitely not unprecedented and exists in skilled sports activities leagues: If groups don’t pay a minimal quantity on salaries and advantages for energetic gamers, the league will step in and shut the hole. Nonetheless, “It’s true that there isn’t one thing precisely like this,” admits College of Illinois College of Labor and Employment Relations professor Michael LeRoy. The proposal, he says, suggests a type of piece-rate pay that rewards quantity of labor productiveness, very like a system that unionized spinners and loom weavers labored beneath within the nineteenth century. LeRoy additionally factors to Identify, Picture and Likeness (NIL) pay for school athletes, the place “collectives” supported by booster teams increase cash for particular applications after which allocate funds to particular person athletes by way of numerous NIL alternatives, forming a third-party payer mannequin. SAG-AFTRA “is basically saying, we wish some type of metered charge of pay that displays the intrinsic worth of our work,” LeRoy says. “They’re attempting to wrap their arms across the streaming enterprise and the way exhausting it’s to trace this pay.”

The union didn’t check with any specific previous labor precedents to craft the streaming income share proposition as a result of the leisure trade and the place of SAG-AFTRA’s performer members is “so completely different” from different companies, says Crabtree-Eire. The preliminary proposal originated with SAG-AFTRA president Drescher, the feisty The Nanny star who ascended to the management function on the union in 2021 on the premise that she may unite the union’s warring factions and would “struggle like hell” for members. (Drescher was re-elected in September, mid-strike, by over 80 p.c of voting members.)

“We felt like if we may connect even to a tiny p.c of the income, then this may not be a battle we’d must maintain combating each three years,” Crabtree-Eire explains. “We may provide you with one thing that the trade may comply with, that we may comply with, that may mechanically develop because the streaming a part of the enterprise grew and would set us up for labor peace for a decade or extra.” However as soon as the studio facet had clearly rejected the income share proposal, SAG-AFTRA negotiators pivoted to a formulation connected to the subscriber rely of the platform.

Labor historian and College of California Santa Barbara analysis professor Nelson Lichtenstein likens the proposal to a contract provision negotiated by former United Mine Staff of America president John L. Lewis again within the Forties, because the coal-mining trade was going through a protracted interval of decline: A royalty positioned on each ton of coal mined would go to help the union’s first welfare and retirement fund, which was a serious breakthrough on the time.

Even in its adjusted kind, Lichtenstein argues that the union’s daring proposal may work, based mostly on previous precedent. “In American historical past, unions have been most profitable and standard and supported [when] they’ve projected not simply ‘we wish extra money’ or ‘we wish this’ however had a brand new imaginative and prescient of how manufacturing and, then actually, how life will happen in a given trade,” he says. “And I feel that SAG-AFTRA is doing that. They’re correctly placing forth daring proposals so that folks can have predictable middle-class lives with know-how and the group of movie manufacturing.”

It stays unclear whether or not, as soon as each events get again into the room after a interval of cooling down, studios will settle for the essential premise of the union’s newest proposal. Sharma suggests a possible answer to the impasse: Present SAG-AFTRA with “a token quantity” inside the proposed formulation — say 10 or 20 cents per subscriber, versus the 57 cents SAG-AFTRA says it requested for — “to be paid to the SAG for now to be reviewed like an inflation adjustment over the following few years,” he says. “Till the trade finds its footing within the new period.” However, thus far, studios have signaled that any kind of subscriber price is a non-starter.

Tags: Audacious Fee SAGAFTRAs Subscriber

Continue Reading

Previous: Tyler Perry Says Bidding Course of for Paramount’s BET Enterprise Was “Disrespectful”
Next: Hollywood Reporter’s Energy Enterprise Managers Breakfast to Characteristic CAA’s Ted Chervin, Honor Mark Landesman