Monday, February 13, 2012

Actors Unions Engage in Pointless Merger?

The SAG (Screen Actor’s Guild), and AFTRA (the American Federation of Radio and Television Artists) recently approved a merger agreement that will now be submitted to both union memberships for approval. But based on the problems the groups needed to resolve, any benefits from the merger are likely to be illusory, at least in the short term (you can read an online discussion of various parts of the merger and the positions for and against it, here).

The merger was apparently undertaken to eliminate the turf wars that have broken up between the two groups, since they have overlapping jurisdictions. The overlapping jurisdictions situation means that actors basically have to pay dues to two unions, and more importantly, split their benefit contributions between the two. The split benefit issue is a real problem because it means that actors dividing their time between SAG and AFTRA jobs may not contribute enough under either contract to meet the earning thresholds for the benefit plans, even though the job is essentially the same between both union contracts.

Moreover, there doesn’t appear to be an agreement on the key dues provisions.  Both SAG and AFTRA charge a set dues amount for each member, as well as a second payment based on the total earnings of the actor. The problem is that SAG cuts its sliding scale amount off at $500,000 of earnings, while AFTRA uses a much lower $250,000 cap. The end result is that for some actors, SAG dues are significantly higher than for AFTRA.

There are other differences as well. SAG enforces what the union calls Global Rule 1, a workplace restriction that precludes SAG members from working in nonunion shops like CNBC and CNN. AFTRA has a similar rule (Rule 1 No Contract/No Work) designed to keep union members from working for employers wherever AFTRA has“jurisdiction”, but no contract, but AFTRA does not enforce this provision. The union contract does not require that SAG’s Global Rule 1 extend to the literally hundreds of AFTRA members (mainly broadcasters) working in nonunion shops. This is a boon to AFTRA employees, who presumably can continue to move between union and nonunion jobs with no consequences.

So what is the point of the merger? Perhaps this is the first step in a gradual consolidation of union membership for entertainers. My bet is that the consolidation is going to progress very, very, slowly. In the short run, however, the failure to address the merger of the benefit plans leaves each of the SAG and AFTRA pension plans with hundreds of millions of dollars of deficits, which can only be resolved by increased member contributions – the motion picture and entertainment industry is certainly not going to voluntarily cough up additional money to help solve the union’s problems. In other words, both sets of union leadership are going to have to go to the members with their hands out right away. That should generate plenty of discussion among the members about whether this merger solves anything, or really makes the situation worse.

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