Dear Alan and Doug:

This is in response to your letter dated September 29, 2008 to Peter Chernin, Robert Iger and me. Your letter indicates that the Screen Actors Guild is not prepared to change its position on any of the threshold issues in our negotiations. The Guild’s position remains unchanged since we last met on July 16, 2008. Further, in addition to new media, there are a number of significant issues which, in and of themselves, prevent the parties from reaching agreement.

Our Final Offer to the Screen Actors Guild is comparable to our agreements with the Directors Guild of America, the Writers Guild of America and AFTRA. Our Final Offer memorializes a set of compromises, including in the area of new media, worked out with other Guilds and Unions and particularly addresses actor specific issues raised during the Screen Actors Guild negotiations.

We do not believe that it would be productive to resume negotiations at this time given SAG’s continued insistence on terms which the Companies have repeatedly rejected.

In light of the unprecedented economic difficulties facing our industry and the nation, the Companies continue to hope that the Guild’s leadership will recognize the five major labor agreements that have already been concluded this year and will accept our Final Offer while it remains on the table.

We want to reemphasize that we value greatly our industry’s talent – the directors, writers, actors, and below-the-line people who create entertainment products for audiences around the world – and hope that our Final Offer can serve as the basis of an agreement.

Sincerely,
J. Nicholas Counter III

September 29, 2008

Dear Gentlemen:

We believe it is clear that our members would fail to ratify your proposal of June 30, 2008. It would serve no productive purpose, therefore, to send our membership a proposal that SAG’s National Negotiating Committee and National Board have rejected and that our membership would not ratify.

It is our fervent hope that this news will encourage you and your colleagues to reengage in formal bargaining, with the exchange of proposals and compromise by both sides necessary to reach an agreement.

Our discussions with you and many of your colleagues since formal talks ended have educated both of our teams about our respective priorities and flexibilities. As we have said to SAG members, if we can reach agreement on three threshold issues, we believe we can finish these negotiations. One issue you brought to the table: force majeure protection for actors held by contract to a suspended production. Two issues we have identified as core principles: coverage for all new media productions (including those below $15,000/minute) and residuals for made-for new media productions re-used on new media. Other issues divide us, certainly, but we believe those other issues can be successfully addressed once we have resolved these three threshold issues. We have approached these contract negotiations reasonably and with a realistic and informed view of the state of the industry.

We are prepared to meet formally and continuously until we reach agreement. We owe it to our constituencies and the thousands of others in this industry that depend on a productive, stable and uninterrupted relationship between Screen Actors Guild and the networks and studios.

The alternative to reaching an agreement as soon as possible is unnecessary and destructive uncertainty. If your intransigence continues, however, our choices become harder and fewer. We would prefer the more complicated and productive choices that compromise will make necessary. But we can’t make those choices that lead to agreement working alone.

What do you say; when can our committees meet face-to-face?

Sincerely,

Alan Rosenberg
National President

Doug Allen
National Executive Director and Chief Negotiator

August 15, 2008

CONTRACT 2008 UPDATE

Discussions Continue
SAG negotiators and industry representatives continue to have informal discussions regarding a successor TV/Theatrical agreement. It is not at all unusual for both parties in large negotiations like ours to meet in smaller more manageable groups to talk about remaining outstanding issues in an effort to reach accord. SAG and AMPTP full committees (which combined number over 100 people) will meet face-to-face again when we have reached a deal and shake hands across the table. We are all hopeful that will happen soon.

Your negotiating team remains committed to opposing the AMPTP’s proposals to produce original made for new media productions non-union, with no residuals.

The SAG national board of directors unanimously endorsed these core principles in its motion on July 26:

“It is a core principle of Screen Actors Guild—

That no non-union work shall be authorized to be done under any SAG agreement and;

That all work done under a Screen Actors Guild contract, regardless of budget level, shall receive fair compensation when reused.”

We believe that the majority of the other issues have been resolved. Screen Actors Guild has made significant compromises to reach tentative agreement on the resolved issues. We also believe that what we are asking for, to close the gap and make this deal, is extremely reasonable and addresses the actual needs of actors and their families in these times of technological advances and economic challenges.

Your national negotiating committee met on Wednesday, August 13 for an update from the president and national executive director regarding informal meetings and discussions with the industry, and to discuss SAG’s options and next steps.

Expired Contract Still in Effect
Despite what you may read on some blogs, the expired TV/Theatrical contract remains in effect. You should continue auditioning and accepting employment under the expired agreement. If you or your agent have any questions, or believe the terms and conditions of the contract are being violated, please call the national contract department at (323) 549-6818. We will take action to protect your rights.

Signed SAG Guaranteed Completion Contracts (GCC) Soar to over 600
To date, 658 projects have been signed by non-AMPTP producers (AMPTP producers are not eligible to sign GCCs). The GCC agreements incorporate the terms of the current SAG theatrical agreement, and terms of any agreement reached by SAG and the AMPTP retroactively, thus allowing companies not affiliated with the AMPTP to begin motion pictures without the fear of interruption by a work stoppage. The total number of SAG covered feature films in 2007, not including ultra low budget and student films, was 1,296. Using that number as a baseline, over half the potential number of films this year have the green light to continue shooting to completion under SAG GCC agreements, no matter what happens in contract negotiations. Remember, these are NOT WAIVERS, but actual contracts.

August 15 AMPTP “Deadline”
The AMPTP has stated that SAG must ratify the AMPTP’s June 30 proposal by August 15 for the deal to be retroactive, threatening not to agree to apply economic improvements in the new TV/Theatrical contract when the deal is done, retroactively to July 1, 2008. This is a standard response by management in labor negotiations. They hope this threat will stampede our membership to take a bad deal.
The risk that actors may not receive increases retroactively is more than offset by the long-term damage that would result from a premature deal that eliminates residuals for work done for new media and reused on new media, or from allowing signatory producers to produce non-union.

Daily Variety reporter and AMPTP fanboy, Dave McNary lays it all out in his article in Daily Variety dated July 29, 2008:

“SAG’s national board — which often finds itself amid pitched internal battles — has received backing from the fledgling Unite for Strength faction over its stance that the majors’ final offer to the guild is unacceptable.

SAG’s board voted unanimously over the weekend that it could not endorse the new-media provisions in the AMPTP’s offer — singling out provisions allowing non-union work in low-budget productions along with a lack of a guarantee of residuals for new-media programs replayed on digital platforms.

Unite for Strength announced last week a slate of 31 Hollywood division candidates with the aim of wresting control of SAG’s board from the ruling Membership First faction. Despite its assertions that SAG’s leaders have mishandled the negotiations, Unite for Strength said it’s in step on the policy stance.

“United for Strength fully supports the recent SAG board motion reasserting SAG’s commitment to the core principle that it does not authorize our employers to make nonunion product under our contracts, regardless of the medium or budget level,” the group said Tuesday. “We believe SAG needs new leadership, but we also agree with SAG’s negotiators that actors need real gains from a new contract.”

Unite for Strength also said in the statement that it agrees that the original goals of SAG’s negotiating committee — including pay and mileage increases, increased pension and health contributions, residuals on new media, protection from product integration abuses, increased DVD residuals and preservation of force majeure protections.

“Unite for Strength believes actors should have all those protections and more,” the group said. “We support our families with SAG earnings, so getting the strongest deal for actors is our top priority. And we know our current negotiating team feels the same way.”

Read McNary’s whole article in Daily Variety.

It is a core principle of Screen Actors Guild –That no non-union work shall be authorized to be done under any Screen Actors Guild agreement and;

That all work under a Screen Actors Guild contract, regardless of budget level, shall receive fair compensation when reused.

Passed unanimously 68-0.This resolution represents guidance from the National Board of Directors to the National Negotiating Committee. It reaffirmed the importance of these issues in these negotiations.“For some time, we have been telling the industry how important it is for all new media productions under our contract to be done union and how important residuals for made-for new media programming are when programs are re-run on new media,” said SAG National Executive Director and Chief Negotiator Doug Allen.

“I am very pleased that our National Board today unanimously confirmed these essential principles in support of our National Negotiating Committee,” Allen added.

AMPTP RESPONSE:

“The continued refusal of SAG’s negotiators to accept AMPTP’s final offer means that actors will continue to work indefinitely under the expired contract – an old contract that contains none of the $250 million in additional compensation provided by AMPTP’s final offer, and an old contract that provides none of the new media rights and residuals that other Hollywood Guild members have now been enjoying for months. SAG has permitted non-union Internet production under its contract since 2001. AMPTP has offered to extend SAG jurisdiction to original new media production, including low-budget programs that employ a single “covered actor.” The AMPTP’s final offer also guarantees residuals when original new media productions are reused and terms to increase pay and residuals if the program is eventually exhibited in traditional media. None of these rights and residuals exists under the contract that expired on June 30th.”

Both trades reported that SAG membership expressed strong support for the leadership and for their handling of this contract negotiation. SAG leaders are still taking the stance that negotiations are ongoing and that the AMPTP needs to respond to the latest SAG proposals. Meanwhile the AMPTP continues to stick to its position that negotiations have ended and that it is up to SAG to accept or reject the contract terms as announced, that is : accept the AFTRA deal.

At this point SAG has still not requested a strike authorization vote nor has the AMPTP declared an official ‘IMPASSE’ that would allow producers to move forward with either a lockout of actors or begin productions under the terms they have offered and force SAG actors to report or no-show.

Thus we continue with the de facto strike, de facto lockout situation that has AMPTP member film production in a holding pattern.

Stay tuned…

In sum, what was once termed “new media” has become a standard as media companies invest heavily in the massive convergence of media and technology, making anything available, anytime, and anywhere.”

Below is SAG’s list of recent ‘New Media’ deals chronicled in the white paper which is located HERE.

Developments

• February 4, 2008—Cablevision offers Universal and Warner Bros. movies on
demand the same day they debut on DVD, as long as viewers purchase the
movies on disc.
• February 20-21, 2008—CBS and NBC begin streaming classic shows from their
libraries online in their entirety.
• February 25, 2008—ABC and Cox Communications begin work on a video on
demand (VOD) system that disables fast-forwarding of commercials.
• March 11, 2008—Apple and Lionsgate agree to allow iTunes users to make
digital copies of selected movies to watch on computer, iPod, iPhone or Apple
TV.
• March 12, 2008—Fox and NBC launch Hulu.com, a website that allows users to
watch movies and TV shows for free with “limited commercial interruptions.”
• April 2, 2008—NBC announces it will produce short, original episodes of The
Office, Chuck and Heroes specifically for the Web, beginning in Summer 2008,
along with an original online-only show called Fears, Secrets & Desires.
• April 13, 2008—Yahoo expands its online video presence and ties to big media
and entertainment by acquiring for $160 million the online video platform Maven
Networks, which has deals with CBS Sports, Sony BMG, News Corp.’s Fox
News and other content providers to help manage, distribute and monetize their
video platforms.
• April 16, 2008—Over ten billion online video views in the U.S. in February
2008, a 66 percent gain versus February 2007.
• April 17, 2008—Networks are acquiring the rights to new content to make the
leap from Internet to television as NBC has signed up the series Gemini Division,
and Channel Five has picked web drama Sofia’s Diary.
• April 28, 2008— Warner Bros. TV Group says it is resurrecting its WB Network
TV brand as an ad-supported video network that will offer a mix of new
programming and old series aimed at women viewers.
• April 30, 2008—Sezmi opens up a new set-top box with one terabyte of storage,
a broadband Internet connection, and an antenna.
Confidential Page 3 of 4
• April 30, 2008—Time Warner says it will release all of its DVD titles on VOD
on a day-and-date basis this year.
• May 1, 2008—Hulu launches a YouTube channel of its own, bringing NBC back
to YouTube.
• May 1, 2008—iTunes goes “day and date” with DVDs with new releases and
catalog titles available from 20th Century Fox, The Walt Disney Studios, Warner
Bros., Paramount Pictures, Universal Studios Home Entertainment, Sony Pictures
Entertainment, Lionsgate, Image Entertainment and First Look Studio.
• May 2, 2008—Disney-ABC Television Group begins research in collaboration
with Nielsen Co. regarding inserting multiple commercials into ad breaks for
primetime series on its broadband player.
• May 7, 2008—NBC streams free, full episodes of The Office & 30 Rock to
iPhones in unprotected Quicktime format.
• March 13, 2008 – Bob Iger states at a New York media conference that he
expects the Disney to pull in $1 billion in digital revenue this year.
• May 15, 2008—CBS purchases CNET Networks making it one of the 10 most
popular Internet companies in the United States, with a combined 54 million
unique users per month, and approximately 200 million users worldwide.
• May 19, 2008—NetFlix Web-to-TV set-top box debuts with a price tag of $99.
• May 28, 2008—Blockbuster Inc. announces its intended launch of in-store kiosks
that will allow consumers to download movies onto portable devices in two
minutes.
• June 1, 2008—CBS says it will unveil a new video player that has new ad
targeting (using a content and advertising engine CBS picked up in its acquisition
of Last.fm), content sharing and HD.
• June 2, 2008—A study suggests marketers should adopt VOD sales as VOD ads
are more effective than broadcast ads. The reason is viewers are more likely to
recall a spot seen in an on-demand context than they would an ad on linear TV.
• June 3, 2008—Sony PlayStation launches an original, unscripted monthly series.
• June 4, 2008—CBS will stream its shows online at Yahoo TV, running pre-roll
advertisements.
• June 5, 2008—All BBC TV channels are being prepared to be made available
online.
• June 10, 2008—Disney to stream movies online, offering them for free based on
an ad-supported revenue model.
• June 10, 2008—HBO buys stake in Funny or Die, signing an additional
development deal as well.
• June 10, 2008—NetFlix set-top boxes sell out in less than three weeks.
Confidential Page 4 of 4
• June 11, 2008— GoTV Networks, which produces and syndicates original and
partner programming via mobile and broadband technologies, enters into a
strategic partnership with talent agency CESD to combine GoTV’s production
studio with CESD’s talent roster.
• June 12, 2008—Warner Bros. Television Group announces that its content will
be distributed through branded channels on Dailymotion, Joost, Sling Media,
TiVo and Veoh Networks.
• June 16, 2008—Weeds delivers 2.5 million Apple downloads.
• June 18, 2008—YouTube experiments with full-length video, enabling YouTube
to offer more ads per view and other ad opportunities.
• June 19, 2008—Fox airs Rescue Me five-minute minisodes on FX and the Web
in order to rekindle audience interest in the show due to the hiatus during the
WGA strike. The minisodes don’t connect to the new season.
• June 23, 2008—British commercial broadcast giant ITV reports a surge in its
Internet activities with a four-fold rise since its launch in video catch-up, which
allows viewers to watch shows they’ve missed that week since its launch.
• June 24, 2008—ABC syndicates content to Veoh and moves its prime time to the
Web.
• June 27, 2008—Sony to create new movie download service directly to TV that
utilizes the Bravia Internet Link.
• June 30, 2008—Google tests new ad-based content monetization model with Seth
MacFarlane’s Cavalcade of Cartoon Comedy and uses its AdSense advertising
system to syndicate the program to thousands of Web sites that are predetermined
to be visited by the target audience.
• July 15, 2008—Netflix and Microsoft announce a deal that will allow Netflix
subscribers to stream 10,000 movies and TV shows to Microsoft’s Xbox consoles
for viewing on television sets, beginning in Fall 2008. The deal doubles the
number of movies and shows available on Xbox for download.

If only SAG President Alan Rosenberg and AFTRA President Roberta Reardon were married… they could get a divorce. As it stands, it looks like a long, chilly separation is in the works for the two actor’s unions they represent.

If anyone is still confused about why SAG and AFTRA conducted the TV/Theatrical contract negotiations separately for the first time in almost thirty years, listen up. KCRW, the NPR affiliate out of Santa Monica, CA has a regular show called The Business, described thusly on the KCRW site:

Hosted by Claude Brodesser-Akner, The Business looks deep inside the business of entertainment. A half-hour of thoughtful and irreverent dialogue with Hollywood’s top deal-makers, filmmakers, moguls, artists and agents, The Business will clue you in on who’s making pop culture pop and what’s keeping Hollywood’s Blackberries juicy.

It’s a good thing this is a duel between a male and a female because if this were a same sex confrontation, these two would be throwing punches and pulling hair. Hummm….maybe there’s a reality series here.

SAG has until Thursday to determine its next move – call for a strike authorization vote, accept AMPTPs final offer that is now on the table or ???

For everyone holding their breath over the threat of a strike, start breathing. It’s NOT going to happen. First, could SAG get a 75% strike authorization vote? Not likely before the AFTRA ratification, seemingly impossible now. There would seem to be zero chance that Rosenberg would now opt to officially poll SAG members for strike authorization. SAG has taken enough body blows for one negotiation. Time to move on and regroup.

While SAG looks like the big loser in this fight, it is really the SAG actors who have lost if this deal turns out to be a replay of the ‘don’t kill an infant technology’ argument that swayed SAG over twenty years ago when we were negotiating cable rates and residuals. Time will tell.

Below are statements by AFTRA and SAG president’s Roberta Reardon and Alan Rosenberg, respectively:

FROM AFTRA:

LOS ANGELES (July 8, 2008) “Today’s vote reflects the ability of AFTRA members to recognize a solid contract when they see it. Despite an unprecedented disinformation campaign aimed at interfering with our ratification process, a majority of members ultimately focused on what mattered—the obvious merits of a labor agreement that contains substantial gains for every category of performer in both traditional and new media.

“Clearly, this was not a typical ratification process, and it would be disingenuous to pretend otherwise. To those of us for whom labor solidarity is more than just a slogan, the idea that politically-motivated leaders of one union would use their members’ dues to attack another union is unconscionable. Working people do not benefit when their union is under attack.

“For the sake of our members, organized labor must be united, especially in a world of ever-increasing corporate consolidation. Given this, AFTRA leadership is eager to focus on several important initiatives in the months to come: Building on the suggestion of our valued supporters, we will seek to organize a summit of top actors, performers, and union leaders to engage in a thoughtful, constructive discussion of how we can achieve unity among performers—and ultimately, if feasible, merger of the performers’ unions.

“Given that working men and women accomplish more when we work together with trust and mutual respect, we will ask the leadership of the AFL-CIO AEMI ICC unions, the DGA, WGA and others in the labor community to come together well in advance of the next round of contract negotiations to explore ways of maximizing the leverage of entertainment industry workers.

“Finally, I intend to promptly review with our National elected leadership and the Presidents of all AFTRA Locals the conditions needed to restore trust to re-establish joint bargaining on our respective commercials contracts.

“I sincerely appreciate the committed work of the negotiating committee, elected leaders, the labor community, and individual activist members of AFTRA who worked tirelessly and publicly to secure this solid contract for television industry performers. I am especially grateful for the support of many joint members of SAG and AFTRA—such as those in Chicago, Florida, Houston, Nashville, New York, Portland, San Francisco and Seattle—who displayed courage in the face of potential retribution, by taking a stand against disunity with the power of truth and solidarity.”

Negotiations with the AMPTP over the AFTRA Primetime TV contract began on May 7. They concluded on May 28 with a tentative agreement that was unanimously recommended for approval by AFTRA’s 31-member negotiating committee. The AFTRA National Board of Directors overwhelmingly approved the primetime television contract on June 7 and recommended the deal to members, which was ratified today. The new contract is effective from July 1, 2008, through June 30, 2011.

From SAG’s Alan Rosenberg:

Los Angeles, July 8, 2008 — “Clearly many Screen Actors Guild members responded to our education and outreach campaign and voted against the inadequate AFTRA agreement. We knew AFTRA would appeal to its many AFTRA-only members, who are news people, sportscasters and DJs, to pass the tentative agreement covering acting jobs. In its materials, AFTRA focused that appeal on the importance of actor members’ increased contributions to help fund its broadcast members’ pension and health benefits.

Screen Actors Guild is the actors union with more than 95% of the work under this contract, jurisdiction over all motion pictures, and over 4 billion dollars in member earnings under the SAG agreement over just the last three years.

We thank the over 4,500 proud SAG members from all over this country who have signed the “SAG Solidarity Statement,” in support of their negotiators. The Screen Actors Guild national negotiating committee remains committed to our core institutional mission to improve the lives of actors and their families.

We will continue to address the issues of importance to actors that AFTRA left on the table and we remain committed to achieving a fair contract for SAG actors.”

Daily Variety, which seems to have taken a pro-AMPTP slant in much of their coverage has this to say:

The SAG-AFTRA hatefest has shifted into high gear, with fighting on multiple fronts over the upcoming membership vote on AFTRA’s primetime deal.

The battles between the two unions came into sharp focus Monday as the guild hosted a boisterous anti-AFTRA rally at its Hollywood headquarters — an event with echoes of the 100-day writers strike as dozens of WGA members donned their familiar red-and-black shirts and hoisted picket signs. Defenders of AFTRA blasted SAG’s effort as misguided and full of lies.

SAG is aiming to persuade the 44,000 thesps belonging to both unions to vote against ratification of the pact AFTRA reached with the majors last month. The tenor of the comments during the morning rally raised the specter of SAG leadership moving into strike-prep mode.

“It is essential that we vote down that AFTRA deal now,” said SAG prexy Alan Rosenberg, who blamed AFTRA’s deal for SAG’s lack of progress at the negotiating table. “AFTRA has now abandoned us to make their own deal to the potential detriment of actors. … AFTRA’s capitulations on these major issues has created a problem for our negotiating team and for all of us who are joint cardholders.”

Read the full article in DAILY VARIETY.