Ad Industry Reaches Tentative Agreement With SAG-AFTRA Over New Contract

Two Key Negotiators Passed Away During Weeks-Long Negotiations

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Credit: Nathan Skid

The advertising industry and the Screen Actors Guild–American Federation of Television and Radio Artists (SAG-AFTRA) have reached a tentative agreement after about seven weeks of negotiations.

The ad industry, represented by the 4As and the ANA's Joint Policy Committee on Broadcast Talent Union Relations (JPC), began negotiating with SAG-AFTRA February 17 as the industry's contract with the union expired on March 31. On that day, the contract was extended until the end of the day on Saturday, April 2, and an agreement was reached just after 3 a.m. on Sunday.

A joint statement did not reveal the terms of the agreement, or what, if anything, has changed. Tensions had been building between the union and the industry in the last year as the demand for digital content skyrocketed. But the issue is complicated, in part, because the contract's definition of what is considered an online commercial is unclear, industry people have said.

Paid 30-second pre-roll spots that run on places like YouTube or other forms of branded content such as longform videos, Vine or Instagram videos could be considered online commercials, meaning SAG-AFTRA would want union actors to be used. Despite marketers' voracious appetite for digital content, however, budgets are generally low enough that agencies say they feel the need to cut corners and bypass union talent.

When Ad Age first reported on this issue in August, executives said they often try to make digital video that falls outside the SAG-AFTRA definition of commercials, which looks for elements such as "program openings and closings which mention the advertiser's name, product or service."

The other point of contention between the union and the industry is the agencies that have come of age in the last 10 to 15 years, many of whom are not signatories. Anomaly, 72andSunny and Droga5 are just some of the hot shops who are not beholden to the SAG-AFTRA contract. Last fall, the union started specifically targeting Droga, which in 2013, became 49% owned by William Morris Endeavor.

SAG-AFTRA charged that Droga was paying non-union wages to union actors and that Droga5 paid actors substantially below the market rate. Droga5 denied those charges.

During the contract negotiations, two key players passed away. Ken Howard, president of SAG-AFTRA died on March 23. Kathleen Quinn, VP and director of production services for the 4As, also died.

"Kathleen was a pillar on our team for more than 20 years. She will be missed by everyone," said JPC lead Douglas J. Wood, in the joint statement. "The success of this negotiation reflects the sense of partnership the JPC and SAG-AFTRA have built over the past fifteen years. Despite very complex issues that initially had significant differences for both sides of the table, through open and honest collaboration we reached a balanced and fair agreement for all parties."

"This negotiation dealt with where we are now and where we will be in the future," said SAG-AFTRA Acting President and Negotiating Committee Co-chair Gabrielle Carteris in the statement. "The tentative agreement delivers essential gains while properly positioning us for future growth in digital and social media. As content evolves, we are poised to grow work opportunities that support members and their families."

The tentative agreements will be submitted to the SAG-AFTRA National Board of Directors for approval at its April 9-10 meeting, said the statement. "No details of the package will be released in advance of the board's review. Upon approval by the board, the package will be sent to the membership for ratification.

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