O. Burtch Drake, President
American Association of Advertising Agencies
The New York Times, May 12, 2000
In recent days, the trade press has widely reported double-digit, record-breaking upfront sales of ads in the broadcast, cable and syndication TV marketplaces. Sources, including Advertising Age, have said upfront network sales will rise 10% to 15% above the $7 billion level achieved last year, with cable TV sales rising 31%, to $5 billion. Ad and cash-barter sales from syndication may reach $6 billion, ". . . a figure many veteran syndicators said was unrealistic only a few years back," according to Broadcasting & Cable.
As O. Burtch Drake admits, and these recent statistics prove, these are the best of times. For reasons we simply can't fathom, the advertising industry doesn't wish to share this wealth with the very people who have helped make record profits possible -- the actors performing in radio and TV commercials.
RESIZING THE PIE
Industry negotiators say the pay-per-play system of compensation is flawed because networks are capturing only 50% of the viewership pie as compared with 90% in 1970. What they conveniently fail to mention is that the pie itself has grown by 66% in those same 30 years. When the Four A's/ANA spout statistics about "exorbitant" 350% monetary demands, keep in mind that the SAG/AFTRA proposal for cable asks for only 37% of what is paid for network TV.
Under the current "flat" cable payment structure, on-camera performers receive a maximum of just $11 a day for the unlimited use of their commercial across all cable TV systems. Under this system, commercials have run as many as 5,000 times in a 13-week cycle. In this industry, this type of exposure has the potential to kill a performer's career. More importantly, could you begin to provide for your family on $11 a day?
And even if the Four A's/ANA claim of a 350% increase were true, it would boost cable compensation to an average of $38 per day -- less than minimum wage. That word average is important. Some advertisers under our proposal would pay more than they do now, but many, many others would pay less depending on advertiser use.
Pay-per-play means fair pay for everyone. Under any buyout, small advertisers pay more than they should while large advertisers get huge breaks.
Pay-per-play is a system nearly identical to the one used by broadcasters when they charge advertisers for airtime. Advertisers only pay for airtime they actually use.
Four A's/ANA indicate that you could be held to terms of our interim agreements even after the strike is over -- terms they'd like you to believe will be less favorable than those they'll end up with. Item No. 1 of the interim states otherwise. "The multi-employer contract [when signed] shall supersede this memorandum of interim agreement."
While you think this over, the quality of your ads suffer without professional talent. Eventually your clients will migrate to other agencies that have signed our interim agreement.
Establishing a system for monitoring usage is essential to everyone in our industry. Ad agencies offer no accounting system and no accountability to actors or to their clients. A SAG study last year monitored 20 advertisers/ad agencies and uncovered $154,752 in unpaid use fees and late payment damages. What sort of surprises might await the clients if SAG and AFTRA institute monitoring? When faced with the study at the bargaining table, Four A's/ANA negotiators -- with whom we've discussed this topic for 20 years -- finally admitted there's a problem with underpayment because of lack of monitoring, but then said we wouldn't have to worry about it if we just accepted a flat rate payment system. How convenient for them. How unfair of them.
Our offer dealing with commercials made for the Internet was to simply codify our jurisdiction over the Internet and then let the free market over a period of one year define the economics. What could be fairer? Yet we were denied even the opportunity to discuss our proposal.
KEEP ON SHOOTING
At recent Association of Independent Commercial Producers solidarity meetings, the position was that no one should let on that there are any problems -- just keep shooting. But Saatchi & Saatchi's director of broadcast production, David Perry, had advised his clients not to produce spots for the first week of the current strike, recalling that spots filmed during the last commercials strike in 1988 later had to be reshot. Past AICP national chairman Frank Scherma advised ". . . to look seriously at visual concepts that are much less dialogue-intense."
When creatives start talking like suits, you know it's not business as usual.
So send your negotiators back to the table and tell them to abandon their destructive, costly, intransigent position so that the best of times can continue and we can all get back to real business as usual.
Otherwise, stay tuned. We are committed. We're in this to preserve our livelihoods, not just to make more money.
Mr. Daniels is president, Screen Actors Guild; Mr. Scott is president, American Federation of Television & Radio Artists.