Illustration by Lamere
In the final days of SAG-AFTRA contract negotiations, as pressure was closing in on the union to end what had amounted to a nearly six-month work stoppage, union president Fran Drescher was holding out for an unusual request, one that most union members knew nothing about.
Drescher wanted to create a fund in which SAG would have broad discretion to redistribute funds among its members. “She wanted her own Robin Hood box,” says a studio source.
SAG’s tentative agreement with AMPTP includes a new, unconventional streaming fund, which is designed to share the wealth among more actors — even those who don’t work on the shows and movies it produces.
The fund’s unusual structure has raised questions for guild members and studios about fairness, legality and the principle that Hollywood is a business that rewards success.
“What if I’m on a show on Netflix and I don’t get what I should because of it [SAG] Is wealth being redistributed? asks the side source in the studio. “It’s a problem for SAG, for the agents, for the actors.”
In an effort to complete the deal amid a 118-day strike that was exhausting for both sides, SAG and the studios agreed to create the fund with a primary focus on figuring out the finer details. The broad outlines are as follows: High-budget streaming shows that attract 20 percent of the platform’s subscriber base in the first 90 days will generate a bonus, which SAG estimates will amount to about $120 million over the 3 years of the contract. Of that bonus, 75% will go to the actors on those shows and 25% will go to a fund jointly managed by SAG and AMPTP. According to SAG’s chief negotiator, Duncan Crabtree-Ireland, recipients of the funding, “will be limited to people who work in live streaming. It is not intended to expand beyond that.” None of the money will go to union officials, Crabtree-Ireland says.
Drescher pushed for the funding as a way to help mitigate the impact of the streaming business model on actors whose shows aren’t big enough hits to reach the bonus standard. “They deserve to make more money without a doubt because those shows in linear TV would have been syndicated, and there’s no syndication on streaming,” Drescher said. Hollywood Reporter. When the studios refused, demanding that funding be limited to actors whose performances and films led to the bonus, Drescher insisted that would not be a “wide enough tent” to help SAG members, according to a source familiar with the negotiations.
Of those members, only a small fraction make a living as actors — just 14 percent, or 22,400 SAG members, earn at least the $26,470 a year required to qualify for the union’s health care coverage. There is some frustration among those who make their living as actors, because so many non-professionals have a say in their livelihood. “The key question is: Why is it appropriate to have 130,000 non-working members vote to support the union in reallocating funds generated by the 30,000 who are working?” asked one of the guild members.
During the negotiations, Drescher fought hard for the fund, especially as it became clear that SAG’s revenue-sharing proposal was not working with the studios. Part of the role that the A-list stars — especially Ben Affleck — had behind the scenes during the strike was to try to find a model for a compensation stream that both SAG and the studios would agree to. “Ben brought a different point of view and a different formula that we didn’t use, but it opened up conversations with SAG,” says a studio source. “Once he was involved and some other actors were involved, he was trying to come up with practical solutions.”
In exchange for giving up revenue sharing in favor of the streaming fund, Drescher wanted SAG to have complete discretion over how that fund was distributed. It’s a key difference from the WGA deal, where the broadcast bonus goes to the writers whose pitches triggered it, a model that several lawyers familiar with such contracts described as highly unusual. Crabtree-Ireland points out that there are some precedents in previous SAG contracts, including funds created to redistribute money among performers whose work is used in streaming music and in commercials.
The fund structure is new enough in the film and television business, however, that at one point during the SAG deal negotiations, studios were concerned that it might violate Section 302 of the Labor-Management Relations Act, an anti-kickback statute that prohibits employers from paying employees. Union members or officials. By the time the deal closed, AMPTP’s lawyers were comfortable enough that the deal was on firm legal footing, according to union and studio sources, because the money was intended for performers working on the live broadcast. “[The legality of the fund] “This is a topic they raised with us and we certainly discussed it,” says SAG’s chief negotiator, Duncan Crabtree-Ireland. “But I think those concerns have been largely resolved.”
But given the history of what some SAG members see as dysfunction in their union, some are wary of the new fund and the lack of information about exactly where the money will go. Live performers remain a broad category, one that gives SAG officials great latitude in doling out money. “The very laws they are almost violating were explicitly intended to protect union members from exploitation by their representatives in the union leadership,” says one union member. Crabtree-Ireland says SAG’s contract negotiating committee will draft a set of recommendations on how to distribute the money and give them to the fund’s trustees.
Some industry sources are also concerned that actors with successful shows might sue SAG for lost compensation, while studios fear that actors whose work brings money into the fund will feel underpaid and come back and demand more.
In the final days of talks, control of the fund, along with the protection of artificial intelligence, was a major point of contention in concluding the deal. The studios negotiated SAG’s discretionary portion up to 50 percent and then 25 percent, which is where it came down to.
While the financing approval enabled the studios to finally close the deal, it also angered some of them. Another source in the studio says: “We are against this socialism.” Why should people get bonuses in programs that never worked?
Crabtree-Ireland rejects this characterization. “It’s not socialism,” he says. “It’s a little less elitist. I think that’s good.”
Katie Kilkenny and Kim Masters contributed to this report.
November 13, 4:21 PM PT. This story has been updated to include additional comments from Crabtree-Ireland.
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