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October 4, 2005
Patrick Goldstein's conversation with new SAG President Alan Rosenberg (which was in his office the other day - for some reason the L.A. Times has started qualifying every interview, it seems, by location or by a "first" or "rare" tag which makes me laugh every time) inspired me to revisit SAG power issues today.
Let me start succinctly…
SAG has by far the most powerful position of any union in Hollywood other than IATSE.
Unless Clint Eastwood and Kevin Costner are prepared to pick up loaded weapons against the studios sometime soon, actors will not ever negotiate "the Chicago way." But while quality directors are very hard to replace, the DGA is a quieter union that gets what it needs most of the time. Not so SAG. Their rank and film is endlessly under attack from an industry that is comfortable with the idea that 90% of them can replaced by non-union actors without anyone in the "general public" noticing.
And, unfortunately for the other 90%, the 10% tend to be the ones that force settlements that are not so great for the larger group. That 10% (which, in reality, is probably much smaller than 10%) has the power and the agents to negotiate all the things that their brethren have to put up with.
I am not 100% sure - but about 98% sure - that Al Pacino's likeness ad/or voice cannot be used in a videogame without his consent, which means that those rights are negotiated in whatever way his agents find satisfactory. (This is in regard to a point made in Patrick's piece.) It may be the case that Universal could make a Scarface videogame without his participation, taking advantage of the value he brought to the film to sell videogames. But then again, I don't think he got paid for the Carlito's Way prequel. The point being… actors with thick contracts are not the ones in danger at SAG.
But the working actor is in danger from the needs of that already very protected 10%. These are the people who live on residuals and pension and health benefits years and years after they stop working or who don't work very much anymore.
When a union fight is brewing, it is the 90% that have to worry about making their rent or car payments. The 10% is, however, sincerely worried about how much they will have to take out of the market to cover their seven and eight-figure annual expenses if they miss one movie or half a TV season as a result of a strike. The wealthy lose a lot more money in a work stoppage than the others do, it's true. But there but for the grace of God (or Brad Gray) go they.
I have long held that the only union that could stop runaway production is SAG. It's real simple. Production in Canada is driven by the ability to attract the marquee names that the productions - film or television - need, and to force productions to hire Canadians to film many of the other jobs in front of or behind the camera, as a requirement of getting tax benefits that can be from roughly 6% - 13% of a project's budget. I respect Canada's skill with this shell game. It is their way of building a production community and a core of working actors. And there are plenty of writers and directors are willing to play games with what is really happening on those sets to get along. Productions seeking tax credits tend to be allowed to fill one role with an American and the other with a Canadian, though you will often find American screenwriters giving away their credits for a cash benefit in order to get deals done.
But it is the star the makes the movies go. And the rules are more insidious for actors than anyone else. If SAG says that the Canadian rules that force a percentage of Canadian (or UK Commonwealth) actors to be hired on every production - with specific slotting, such as a forced 3rd and 4th lead if there are two American stars - will preclude their stars from appearing in productions shooting in Canada, the system, as it now stands, will fall.
The reason this hasn't happened already is that two thirds of the power in SAG negotiations - the 10% and the producers - don't really want it to happen.
Without meaning to pick on anyone in particular, since I don't know his personal politics on this - if a Sylvester Stallone didn't have "the Canadian option" on a movie like Driven, there is a real chance that either that film would not have been made or Stallone would have had to take millions less for his work on the movie in order for the economics of that film to work. Canadian financing has been a cash cow for the big stars (the 2%)… and for their agents and for producers.
So in this arena, SAG is the most powerful of the unions, since IATSE can't force anything to change on the Canadian side.
On the other issue, DVD residuals are really a matter of pure will. The industry got a brand new pie to eat there. And the ownership class just plain doesn't like sharing. Sadly, SAG missed their strongest power window in the last negotiations since the DVD biz is starting to settle into its maturity and much of the heavy cream is gone. Also, with the majority of DVD cash now coming from old TV shows, the question of whether those shows still to be exploited will retroactively be added to a new residual deal is a tough one to answer. In that case, all but a few of the 10% and even the 2% have been screwed already. They rely on their agents to set great deals and most of those deals did not include DVD until a few years ago.
In fact, SAG really needs to start crystal-balling if they are going to take this fight to the wall and create a baseline for VOD and other home-delivery systems that are likely to start generating major revenues before the negotiation after this one.
But keep in mind, though a .5%-2.5% of the DVD net doesn't seem like much, the margins of the film business are still pretty thin. And it is unfair to just look at the big successes and to forget the many losses that are eaten to get to them. It's also a misnomer to look at DVD profits as pure profits. That is more the case in television, where deficit spending may be as much as $1.5 million an episode, but on a hit that is chump change. On films, the majority that do reach profit reach it on DVD sales. So a significant portion of DVD revenues go to red ink. And if you want to argue that studio overhead and other costs are unfair…well, that is a different fight.
The DVD deal for CSI that Patrick brings up does seem onerous. But remember, you are still looking at millions of dollars going into that actors' pool and the issue in a case like that is more that Bill Peterson and Marg Helgenberg were not in a strong enough negotiating position to make individual DVD deals up front, not so much the general percentage of the actor's shared DVD pot. How would lead actors on those shows feel about a negotiated higher pool for DVD on big hit shows that is shared in some part with the pools for other shows that are not as successful? That is the rub. It is a hard challenge to balance raw greed with union unity. And that is what Alan Rosenberg needs to find a way to lead SAG to achieve.
There is definitely room on the balance sheet for a better deal for SAG actors in DVD. But the cash flow is a lot more complicated than it used to be. And all of the actors are going to have to be willing to give up a little to make the future a lot better for all.
