SAG-AFTRA Commercials Contract Details Revealed (Exclusive)

The deal includes an array of changes that will increase actors’ compensation and provide advertisers with more flexibility on the Internet.

The Hollywood Reporter has obtained the terms of the SAG-AFTRA commercials contract that was reached last week, despite the fact that the details will not be officially released until the union’s board of directors reviews the terms at its April 20-21 meeting. According to a source close to the negotiations, the key details of the three year deal include the following:

* Wages: One-time 6 percent increase. The increase is effective over the term of the contract (April 1, 2013 – March 31, 2016) and is mathematically equivalent to 2.9% annual increases. That compares with the 2 percent annual increases that have become customary in Hollywood labor deals.

* Spanish Language Commercials: Program fees increase by 10 percent and wild spot rates by 5 percent, in addition to the general wage increase.

* Pension and Health: The new P&H rate is 16.8 percent, up from 15.5 percent.

* Meals: Meal allowances increase by about 1/3 to 1/2, and the travel per diem by about 15 percent.

* Internet and New Media: Usage cycles for commercials made for the Internet or new media, or for commercials moved over from traditional media, may be either eight weeks or one year. Cycles must be consecutive unless holding fees are paid, and the maximum period that commercials may be used is 21 months from the date the commercial was shot. Compensation rates are unchanged for commercials made for the Internet or new media (133 percent of the applicable session fee for eight-week cycles and 350 percent for one-year cycles), but are increased for move-over commercials (now 150 percent and 400 percent).

* User-Generated or Crowd-Sourced Commercials: The new commercials contract permits user-generated or crowd-sourced commercials as entries to an Internet-based contest. No contract provisions (such as required fees) will apply to such commercials when they are exhibited on the Internet during the contest, but if exhibited thereafter, the provisions of the contract will apply. Non-winning contest entries must be removed from the Internet.

* Commercials with Non-Actors: The new commercials contract permits Internet commercials that record people in public, including at live events or interviewed at public venues or on the street, or via a hidden camera. So long as the dialogue is not scripted and the people are not cast for the commercial, the contract provisions will not apply.

* Cable: The cable cap increases from 2,000 units to 3,000. This increases the actor’s potential compensation for commercials that air on cable.

* Extras: Extras will now only be entitled to receive the agent’s commission as part of their fee if the extra has an agent and the agent procured the job for the extra.

* Data Processing: By March 31, 2014, all commercials must be use Ad-ID as the commercial identifier, and all talent payroll reports must be filed electronically.

* Waivers: Various waivers are now considered to be part of the contract, and one or two waivers have been added.

* Gross Rating Points: The so-called GRP compensation model, a goal of the industry, will continue to be studied.

* Other Provisions: According to the source, there are roughly two dozen additional changes that were negotiated.

Formal negotiations between the 34-member (26 seated members and 8 alternates) SAG-AFTRA Negotiating Committee and the Industry began February 14 and concluded April 6, at 1:49 a.m. EDT, in New York.

The advertising industry was represented by Douglas J. Wood, Stacy Marcus, and David Weissman with Reed Smith LLP, Linda Bennett with Saatchi & Saatchi, Kim Stevens with Arnold Worldwide, and Kathleen Quinn with the American Association of Advertising Agencies (known as the 4A’s).

SAG-AFTRA was represented by co-president and negotiating committee national chair Roberta Reardon, national executive director and chief negotiator David White, Negotiating Committee Vice Chairs Sue-Anne Morrow, Allen Lulu, Ilyssa Fradin, and David Hartley Margolin, co-lead negotiators Ray Rodriguez and Mathis Dunn, and Senior Advisor John McGuire.

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