SAG and The Independent

A few months ago I wrote a column about the effect IATSE’s wage increase in Michigan would have on future production in Michigan. Just recently, the company I have my first look deal with decided to produce another picture in Michigan and was informed my column made it impossible for IATSE to negotiate or help us in any way. They basically said this is the deal, take it or leave it if you want to shoot here; your employee ruined it for you.

My company then proceeded to disavow any knowledge of my column and said that what I write is of my own doing and not the policy of the company. This is true. It is my own doing. No one tells me what to write or censors my editorial content.

I still believe IATSE is harming the burgeoning film industry in Michigan. I believe that if IATSE was doing the right thing in Michigan, the state of Michigan would be putting all of the other tax incentive states out of business. Producers would be running there in droves.

Unions are supposed to be the mechanism to level the playing field for the working man. Their job is to protect the working man from “the man,” and to keep their members employed fairly. Isn’t employment what unions are really all about: Especially now when unemployment is so rampant all over the United States particularly in Michigan and California. You would think the unions would be bending over backwards to work with “the man” in a mutually beneficial situation. Let us all do whatever is necessary to keep employment in the United States; not Eastern Europe or Asia.

Unfortunately, this is not the case with IATSE in Michigan and with the Screen Actors Guild (SAG) anywhere. SAG does their best to stop movies from being made instead of helping the independent producer hire their mass of unemployed.

I will now give some examples of how SAG harms the independent. My first look deal is with Nu Image, Inc., one of, if not largest independent production companies in the business. In the last 10 years, this company has produced more than 150 films ranging in size from one million dollars to sixty million dollars. It has employed more than 1,000 actors; the majority of which are members of SAG.

Does SAG do anything to make life easier for this company? No. SAG does everything in their power to stop this company from making movies. In fact, over the past ten years, there have been many incidents where this company has had to threaten to shut a movie down and sue SAG in order to get any cooperation whatsoever.

This is a company that employs, pay actors millions of dollars and pays residuals to actors on a regular basis. Can you tell me one true independent that has been doing this since 1992? Probably not!

Just last week, Nu Image was about to shoot a thirty million dollar film and was held hostage the day before principal photography was to start over a dispute regarding the SAG Bond which is a “guarantee” that actors will be paid. SAG insisted on a bond in the approximate amount of $400,000 which was based upon erroneous SAG employment figures provided by the production staff on location. SAG did not care. They were going to call actors’ agents and shut the movie down the day before it was scheduled to start. The matter was resolved at the twenty-fourth hour, but not before threats were made from both sides that almost put the picture in jeopardy. At one point, a SAG employee told us, well if a production employee provided erroneous figures, you should fire him/her. Is this the way a union represents workers?

Another nightmare for the independent producer is the SAG security interest which is a lien on the film’s copyright for the life of the copyright. The theory behind this is to protect the actors against unscrupulous producers failing to pay residuals. Fine. It makes sense for one-off producers or producers with a bad reputation. But, is it necessary for a major independent production company with a history of paying residuals? Why must SAG demand cash - which is desperately needed to fund the production – be removed from the budget to pay SAG deposits? Why must the threats go back and forth every time any request is made?

Then after all of the stress with SAG during production, the independent must beg for the return of the SAG Bond after it has paid the actors in full. As you already know, this amount of cash can be substantial and for smaller companies is actually needed to complete the movie. Thank God, Nu Image has the capability to complete movies without this money. I have heard horror stories from other companies where the SAG bond has caused foreclosure on loans and investor liens because sometimes they will just not return it. Sometimes they unilaterally convert it to a residuals bond to guarantee the payment of residuals. Doesn’t that amount to conversion?

Sometimes the reason given for its non-return is absolutely asinine. For example, SAG has a document that must be completed on every film to show minority hiring. You must show the number of females and people of color hired by the production. This form is a survey and nothing more. There are no quotas in the SAG system and a producer may hire whoever they choose. However, if this form is not filed by the producer, the bond is not returned. The same is true of every piece of paper that SAG employees have on their checklist. No one will think out of the box. No one will pull the trigger and give the money back until this checklist is complete.

And, no one will give the money back with any interest that matters. Back in the day when CD’s were paying 4-5%, SAG was paying 1.5% or less on the bond. I’m sure now they are holding money in some cases for more than a year and paying 0% interest. I wonder what they do with the money they earn?

Lastly, the SAG arbitration system must be discussed. Talk about an uneven playing field! Prior to producing films, I was an entertainment attorney. In all, I have been in the business for 25 years give or take. During that time, I have not seen one SAG arbitration ruled in favor of the producer. In fact, some arbitrators on the SAG list have never ruled in favor of management. I can think of a few names that are on my strike list just because of personal experiences.

In one circumstance, a former SAG Board member, Seymour Cassel was hired by a company that I was involved with. Mr. Cassel, being on the SAG Board forced the union to pursue a grievance on his behalf. That matter was fairly simple. He believed he had a two week guarantee of employment and the employer felt there was no guarantee and paid him for the one week he actually worked.

The matter went to arbitration and Mr. Cassel won. He was given the second week. It seems like it should have been a swearing contest and the arbitrator just chose to believe the representatives of Mr. Cassel. Sorry, nope.

It was much more complicated than that. Mr. Cassel had actually signed both a SAG deal memo and a long form agreement, neither of which mentioned anything about a guarantee. In fact, they specifically stated there was no guarantee. But, there was an interoffice memo from Mr. Cassel’s agent that said the deal was for a two week guarantee. This document was not signed by anybody. In legal parlance, it not only was pure hearsay, but it violated the merger rule. It should not even have been entered into evidence.

This did not matter to the arbitrator, he ruled for Mr. Cassel based upon the interoffice memo.

By the way, Mr. Cassel was just thrown off the SAG Board last week for “conduct unbecoming a member,” and his membership was suspended. (Daily Variety – October 20, 2009). In the Daily Variety article, it stated that Mr. Cassel was considering filing for “financial core” status which would permit him to work on union and non-union films during the course of his suspension.

“Financial Core” is a really interesting animal. It is based upon a Supreme Court decision (Communications Workers of America v. Beck, 487 U.S. 735 (1988)) in which a union member sued the union because he did not want to be associated with the Union’s political lobbying activities. The Supreme Court found for the union member and stated that no one could be obligated to pay for the political positions of the union. They only had to be obligated to pay union dues for the “financial core” of the union.

Based on this Supreme Court ruling, any member of any union in the country can go “Financial Core.” All it requires is that they write a one sentence letter to their union stating that they have elected Financial Core membership. A “Financial Core” member of any union is still covered by all union benefits such as pension, health and welfare. They can then work on all union and non-union movies without being subject to any penalty from the union at all. The only things a “Financial Core” member of a union cannot do is vote in union elections or hold elected positions within the union.

Personally I am amazed that droves of actors, directors, writers and crew members have not chosen Financial Core membership. Maybe it’s because the unions all try to keep it a total secret and will do almost anything to avoid their members becoming aware of its benefits. Imagine – union members being able to decide for themselves who they will work for and under what conditions. It would mean they have to be treated as adults - not obedient children by their unions! It would certainly make life easier for independent producers and allow them to spend their hard won cash on making movies not paying for union bureaucracies. Maybe Seymour Cassel will start a trend – who knows! It may even help the employment situation for actors and all member of the entertainment industry. After all, isn’t that what we need to end this recession; more employment!

©2009 by Frank T. DeMartini. Permission to copy will be freely granted upon request.