October 7, 2008 by WW.

Variety says 2010 movie production is starting despite the lack of a new TV-Theatrical contract. One way to look at it is that the studios have decided that SAG isn’t going to strike. Another way to look at it is that actors get hosed, because they’re working under three year old rates. A third way to look at it is that it’s an opportunity for SAG to strike, if it can convince its members to agree on anything - something that hasn’t happened in several years.

The most interesting quote from Doug Allen came when he spoke of the upcoming SAG National Board meeting Oct. 18, at which one issue will before the new board will be whether to hold a strike referendum.

“I don’t recall anybody running on a platform of accepting management’s June 30 proposal,” Allen said, regarding the suggestion that the Unite for Strength wins amounted to a rebuke of SAG’s current regime by the membership.

Posted in Exhibit A - TV Theatrical | Print | 6 Comments »

October 7, 2008 by WW.

With incumbent Kent McCord not running for reelection, the Hollywood Board’s Membership First majority elected its spokesperson, Anne-Marie Johnson, as First VP. Blogstage has a great quote from Johnson, comparing herself to McCord:”“I’m a little more impatient, I run a tight meeting, and I make sure we adhere to time limitations on speaking. I’m not liked for that, but people do get home to spend time with their families.”Johnson easily defeated Unite for Strength’s Pamela Reed for the gig. Though, in its first election cycle, Unite for Strength eliminated Membership First’s majority on the National Board, Membership First still has 36 seats out of 55 on the Hollywood Board.

Posted in SAG Politics | Print | 9 Comments »

October 7, 2008 by Editor.

We’re told the first joint SAG/AFTRA meeting to hear the results of the Booz Allen study on Talent Compensation in Commercials, at the Westin Hotel in New York this afternoon, drew fewer than 40 performers. Those who were there heard got a full briefing on the study, which was jointly funded by the unions and the JPC, the industry group representing producers.

As VoiceGuy has posted in detail, outlines possible compensation models in tradtional media, new media and radio. While much of the attention has been focused on compensation levels, we’re thinking that the sleeper issue here is going to be the editing recommendations.

The consultants recommend what will likely amount to substantial reductions in pay to those who perform in complicated campaigns. Right now, with minor exceptions, the commercials contract requires that talent get paid for separate commercials when edits are made to an existing commercial.

The study recommends that there be three new categories created for edits of an existing spot, and proposes that some of them be done for no additional compensation.

1. Informational changes, relating to “factual accuracy or legality” - no additional compensation would be paid.

2. Edits: changes which do not change the storyline or product - under some compensation modesls, you’d get paid for the edit, but use and holding fees would not be recalculated, meaning you’d effectively have one commercial running, not multiple spots.

3. Versions: changes whihc modify the storyline or product - under only one compensation model there would be extra pay based on gross ratings points for the commercial.

This stuff will definitely make your head spin - and your agent’s head spin, too! You have to hear it explained over and over again before you get a firm grasp on it. A second session on the Booz Allen study is to begin in about an hour in New York. Similar sessions are scheduled around the country in the next few weeks.

One announcement at the session - W&WC sessions are expected to start the first week in November, and the process will run for about a month.

Of course, it’s still an open question as to whether the contract will be jointly negotiated. The JPC has said it only wants to do the negotiation once, and the Allens have made it plain they want to do this one jointly.A proposal negotiated between the Allens and AFTRA with the AFL-CIO “facilitating,” under which the Commercials Contract would be jointly negotiated under the rules used in Phase 1 passed AFTRA’s board this past weekend, although all the Membership First/Hollywood faction voted against it.Membership First still hasn’t said anything official as to whether it will support the Allens when the proposal is brought before the SAG National Board at the Oct. 18 meeting.

Posted in Commercials Contract | Print | 1 Comment »

October 7, 2008 by Voiceguy.

For purposes of the Booz-Allen study, commercial actors were viewed as receiving two main forms of payment:

• Session fees, based on their work (type of role, number of production days) in the initial production of the commercial; and
• Residuals, which depend on the “media plan” (exhibition of the commercial) used by the sponsor.

About 75% of the aggregate compensation outlay comes from residuals.  (There are also holding fees, but those were not given significant attention in the study.)

Booz-Allen’s assignment was to develop a data sample that would represent the diversity of talent profiles (sessions, type of performer) and media plans (where the commercial is played) used for the roughly 30,000 commercials that were produced under the contract during the measurement period.

No single source offers all the information needed.  SAG receives information that offers part of the puzzle, covering performer roles, session/holding fees, wild spot units, cable units, and Class A play information.  However, this information does not track the networks on which ads are played, and certain information is lumped together where the same rates apply.

Thus, Booz-Allen combined the information received by SAG for a large group of commercials with information from a major independent ratings service that tracks per-network usage, industry segmentation, and syndication information for most of the major networks, cable channels, major syndicators, and major spot markets.  What Booz-Allen sought to do was marry the records for commercials as received by SAG with the records for commercials tracked by the ratings service, in order to create complete “base case” records that matched performer compensation with actual usage in Class A (by network), Cable (by network), syndication, and wild spot.  About 3,900 commercials were matched, representing 13% of the total.  This may seem like a significant sample, but it’s not a random sample, so caution is needed.

Booz-Allen has smart people, but it should be understood that this process is not perfect.  Some estimates and assumptions were made to cover gaps in information.  It’s the traditional problem in any kind of econometric analysis:  Bean counters can only work with the beans that happen to be available to be counted.   I did not see any attempt by Booz-Allen to try to estimate a confidence level or margin for error in this sample, and it may be pointless to try to do so in these circumstances.

From this sample data, Booz-Allen constructed an elaborate model that replicates the commercial “base case” for the measurement period on an aggregate basis.  This model exists as a massive set of Excel spreadsheets.  Booz-Allen then used this platform to test alternate compensation methods that were designed to tie talent residual payments more closely to the audience sizes in the various “channels” used.  (As far as I can see, session fees for principal performers were left alone.)  Residual money was taken out of channels where audiences have gotten smaller, and moved into channels where audiences are larger.  The aggregate model was then run based on these new assumed payments to see what the total outlay would be.  Adjustments were made until the total outlay under the new payment schemes was the same as under the current contract.  This is the “revenue neutral” objective.

Now, it is “revenue neutral” in the aggregate, but not at all in individual cases.  Some performers (and some advertisers) will stay about the same in the new compensation scenarios, but others will differ significantly, moving higher or lower.  The underlying assumption of this approach, however, is that if it is “revenue neutral” then it is fair on an overall basis to the talent:  The same overall money is being paid; it’s just being moved around.

Next, having established new proposed compensation parameters under the different approaches being studied, Booz-Allen created a second tool — also an Excel spreadsheeet — that allows an individual commercial to be tested under the various scenarios.  A user inputs the number of principal and other performers, the number of sessions per performer, and then lays out a media plan showing the number of plays on the major networks (ABC, CBS, Fox, NBC, CW, and MNTV), the major cable channels, syndication, wild spot, dealer, various internet uses, and various New Media uses.  Next, the user specifies which broadcast uses are in Prime Time and which are in other time, which develops the rating information for the GRP approach.  The model then spits out a set of charts and tables showing the comparative costs under the current contract (”baseline”), three versions of the Adjusted Tiers approach, and the GRP approach.

Both of these tools — the Aggregate Model, and the Individual Model — have been made available to advertisers to experiment with.  The JPC has sought feedback from them as to which of the talent compensation approaches is most favored by the advertisers.

We have no way of knowing what kind of feedback is coming in, but predictably it will be quite mixed.  The new approaches create winners and losers.  Advertisers that spend most heavily on traditional network TV supposedly do better under the Adjusted Tiers approach (although my own experimentation did not confirm this), while advertisers who rely more heavily on cable are said to do worse.  This reflects the fact that the adjustments appear to move money out of Class A and into cable.

Of course, the problem with any static economic model (such as the ones here) is that behavior is affected by the new rates.  It’s the same problem that causes Congressional modeling of the effects of tax changes to be so ridiculously far off — when rates change, people alter their behavior to minimize their tax liability under the new rates, which is why, for example, cuts in tax rates can lead to increased tax revenues.  Similarly, it may be that advertisers will re-allocate their spending in response to new residual rates and therefore mess up the “revenue neutrality” that is supposed to be produced.  I’m sure Booz-Allen would be the first to concede this problem — but trying to model actual, dynamic behavior in response to new rates would be a vastly greater undertaking than what was attempted here.  And we don’t know whether the changes in rates would lead to more or less overall performer compensation.

Here’s one important takeaway point, however:  If you find yourself at all puzzled by what’s going on, consider that the advertisers must feel the same way.  Everyone is stepping off of familiar ground and into the realm of the unknown (and, to some extent, the unknowable) with these new proposed approaches.  And we don’t really know how these approaches would be translated into actual contractual language, nor which of them the JPC will even want to discuss.  So nothing about this represents a “done deal” on either side.

Don’t forget the joint SAG/AFTRA informational meetings presenting information on the Booz-Allen study.  The first ones are today in New York.  With luck, the presentation will make more sense than what I have said here!

Next:  New Approaches to Compensation

Posted in Commercials Contract, SAG-AFTRA | Print | 8 Comments »

October 7, 2008 by Editor.

This morning’s Hollywood Reporter carries an interesting line in the story by Leslie Simmons on the stalemate between SAG and the AMPTP.  There’s been some question as to whether the “last, best and final” offer might get worse as the economy nosedives.

“Sources with the Alliance of Motion Picture & Television Producers said Monday that the offer will remain intact — at least until Oct. 18, when the newly realigned SAG national board meets and votes on whether to bring a strike authorization vote to its membership.”

Here’s the whole THR story.We were all particularly amused by the omni-vocal Anne-Marie Johnson’s quotes on the economy.

“”The industry will remain very solvent and exceedingly healthy during any economic downturn,” Johnson said recently. “That is what this industry is about.” Johnson pointed to the Depression and recessions as examples of the entertainment industry doing well despite Wall Street suffering.”

The article goes on to trash Johnson’s Palin-like approach to economics and reality, as does a quote from the AMPTP: “it’s unrealistic for SAG negotiators now to expect even better terms during this grim financial climate. This is the harsh economic reality, and no strike will change that reality.”

Sorry for the grim tone, but - we can’t think of anything cheerful to say to end this one.

Posted in Exhibit A - TV Theatrical | Print | 6 Comments »