SAG-AFTRA Commercials Contract Modified To Provide 'Free Bargaining' As To Compensation For Low-Budget Digital Productions

Responding to the increased concerns voiced by advertising agencies bound by the 2016 SAG-AFTRA Commercials Contract (Commercials Contract) that they cannot compete on the digital front with their non-union counterparts, on October 19, 2017, SAG-AFTRA and the Joint Policy Committee on Broadcast Talent Union Relations (JPC) issued a joint statement announcing that, effective immediately, the Commercials Contract has been modified to include a waiver for commercial digital low-budget productions.

The Waiver

The chief concern leading to the creation of the waiver was the comparatively high cost of talent associated with an increased demand by clients for low-budget digital commercial production. The new waiver seeks to address those concerns by allowing for "free bargaining" with talent for economic terms (i.e., there is no required minimum rate of pay), with union or non-union talent, in connection with digital commercial productions with budgets of $50,000 and under. Digital commercial productions with budgets over $50,000 are still required to be paid at rates not less than the minimums set under the Internet and/or New Media provisions of the Commercials Contract. As stated in the SAG-AFTRA/JPC joint statement: "The waiver . . [is intended] to offer relief to ad agencies that are losing clients to non-signatory ad agencies on digital work. Our hope is that they will now be able to retain this work and maintain those highly creative and productive relationships with advertisers."

The specific provisions of the waiver are as follows:

It applies to commercials made for the Internet and/or new media with production budgets of $50,000 or less. It applies to both principal performers and extra performers. The parties can bargain freely as to session and usage fees and the number of commercial edits (in a manner similar to a non-union agency negotiating with non-union talent). The maximum period of use is one year, after which the signatory producer must re-negotiate with the talent. No exclusivity may be required of the talent (i.e., the talent may work competitively while under contract with the signatory producer)...