Why the New Union Contract Is Good for Everyone

The SAG-AFTRA pact

While the advertising industry’s new contract with SAG-AFTRA is still awaiting approval by rank and file members, agencies and talent alike should be closely considering how it is already remaking their respective livelihoods and the frontier of creativity.

Illustration: Shaw Nielsen

Both parties should be proud of how they (via collective bargaining) came to terms on many historically loggerhead issues, while also setting clear guidelines for the increasingly digital future of creativity. And while the final sign-off on this complex, multipart agreement is still in the offing, it’s already impacting the way the industry does business.

We all need to be mindful that final approval will make the new terms retroactive to April 1, 2013. Agencies and talent alike will be working in two worlds over the next six to nine months, as old commercials play out under the existing contract, and as we plan for new ads under the revised rules.

So what are the top lines that agencies need to keep in mind moving forward?

The new agreement has gained talent a big upside—an overall 6 percent increase in pensionable wages up front, along with increased payments for ads aired online, on cable and in other media, as well as more generous per diems for meals and travel. Much of the concern about rising talent costs heard from our clients comes with the provisions now governing talent in cable, where the new maximum cable fee increase could reach nearly 21.5 percent.

The pact offers technological improvements, too. For example, all ads featuring SAG-AFTRA talent must now be registered with Ad-ID, providing something similar to the UPC code for packaged goods, to ensure tracking and talent payment.

This new deal will also ensure that advertisers will get more for less money because it gives them more cross-platform usage, including the long-desired second allowable lift, across all media. And it creates more flexibility. Already, agencies can now buy much shorter runs for their spots for retail clients. The Dealer Cycles employed for car dealerships and retailers now can be eight weeks versus the former six-month standard. Also a new editing waiver, Special Offers and Promotions, allows multibrand retailers like Target and Kmart to edit a commercial to reference new products as long as only one variation runs in the same market/same time for a maximum of two weeks. These two provisions are especially beneficial to clients whose businesses live and die by making and refreshing short-term and seasonal offers.

Perhaps the most notable changes are the areas that will not be covered by the new actors’ contract. Video shot at the growing number of live events used to build brands, once a legal quagmire, are now talent cost-free on the Internet and new media. Also, video submitted as part of contests, with the exception of the chosen winners, can also be utilized free of talent costs on the Web until the contest term ends. People captured in man-on-the-street commercials can be used sans payment, with the exception of the interviewer, of course. Then there’s what I call the Folgers Clause, where persons captured in hidden-camera commercials can now be featured at no talent cost.

Moreover, a new statute of limitations will ease long-running legal hassles that have plagued agencies and advertisers for years. Talent had been able to make claims for production-related claims long after their two-inch video dub has dissolved in a landfill. Before the new agreement, which covers auditions, travel and production-related session claims, there was no limit.

Obviously there’s both a financial certainty about moving creative into burgeoning platforms of online and mobile, and the real value of getting more return on investment with traditional television, cable and radio.

By opening up the availability of live events, contests, man on the street and hidden camera, agencies can take the chains off when it comes to campaigns that put real people front and center as unscripted advocates for their brands.

Paul Muratore is president, CEO of Talent Partners, a talent and production support services firm.

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