SAG and The Independent

Frank DeMartini

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.

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11 Responses to SAG and The Independent

  1. Jfestra on October 27, 2009 at 3:13 pm

    Great article! A refreshing perspective that effectively lays out a viewpoint and provides some real examples. I hope SAG doesn't try to put you on some kind of "most wanted list"!

    And does this mean that SHARK IN VENICE 2 wont' be filmed in Michigan?

  2. Anonymous on October 27, 2009 at 6:23 pm

    Well Franky,

    I must say for me…this is one of your best pieces. As you know I have been a member of SAG for 30 years now. And in that 30 years I have watched it go from a good working union that appreciated it’s members and worked with producers to make it happen to…a basically useless organization that is extravagant in its spending and answerable to no one! ( I stole that line from Mel Brookes).
    As I may have told you I have had several grievances with SAG through the years and they offered not one ounce of help in any way to the problems.
    One of which was the fact that when I was a young stuntman I went out hustling shows and even though I had a great reputation as an upcoming stuntman I could not get hired because the shows were being run by “Stuntmen’s Association”. So I went into SAG and asked them why they were allowing a sub union to dictate the business. Their rep laughed and asked what I was talking about. He told me that they were just a group…not a union of any type. So I told them “when a group of stuntmen all work under the same banner, are required to pay dues to the group and have a list of bylaws that members must sign to join and are penalized by the group for not following those laws that it sounds like a union a lot more than a group of good ol’ boys to me. And by the way…one of those laws was that they have to work only the guys in their group first before they hire anyone else from the outside or there will be penalties! In other words…the fact that I had a current and good standing SAG card meant nothing to them!
    When I said this I got an appointment to talk to Richard Masur the sitting President of SAG. When we spoke by phone he told me he had talked this over with his staff and that they had told him that he can’t get involved because some of the current members of the board at SAG were in Stuntmen’s Association. He finished by saying “Besides, I don’t like what a subject like that would do to my popularity”. I ended the conversation by saying “thanks for nothing and does the word collusion mean anything to you?”
    I also said “Oh, one more thing…if a group of actors tried that they would be run out of Hollywood and you know it!”
    Anyway back to the chase…I totally agree that SAG has been more of an obstacle than a help to filmmakers for many years. I have tried to put together investment groups for years to make films but the ever growing SAG package scares them completely out of the business. I think SAG needs to wake up and go back to basics. I just recently worked on a pilot under AFTRA because SAG was threatening still another strike and they did not want to prep the show only to have SAG throw a wrench in the gear box. By the way AFTRA was a dream to work with!
    And as for financial Core. I know a ton of Stuntmen and women that work under financial core. A lot of SAG members like myself that could not get any help from them unless it put money in their pockets but would be tracked down like a dog if they worked one day non-union to feed their family have moved over to financial core and I feel a huge amount more would if they knew how it works.
    I am tired of talking now but I could go on and on. I will end by saying you are absolutely right Franky and SAG should listen a bit more and try to work with companies that spent a huge amount of money in this business like Nu Image Films and others rather than trying to bite the hand that feeds them…and often!

  3. Anonymous on October 28, 2009 at 12:05 am

    Agreed! A great article for those in the biz. I too investigated going financial core with my IATSE union.

    Question: Why do I pay substantial union dues (dues are reduced very slightly by going F.C.) but am barred from having a vote in the union that controls everything in my chosen field of endeavor?

    I did not consider F.C. because of the political doings within my union, but rather I object to being treated like a schoolboy or comrade in local and national elections. I am capable of those elective decisions on my own. Thank you.

  4. George on October 28, 2009 at 3:52 am

    Frank,

    You act like the use of performance guarantees between two parties isn't a well know part of doing business. As a lawyer, you should know this isn't true. In fact, the use of "Letters of Credit" and "Performance Bonds" are a wide spread part of doing business across industries. This is nothing new.

    Arbitration is the same thing Frank. When you agree to binding arbitration, you have to agree to abide by the terms of the Arbitor. Take it or leave it….

    Now, you can argue that you don't like these circumstances….okay….but don't act like they caused because a union is involved. They are all part of doing business.

  5. Frank T. DeMartini on October 28, 2009 at 7:16 am

    And, George this is why people do not do business in the United States any more. The more regulations, the less business. I and other people in the movie business leave because it is easier to do business elsewhere. We are not voluntarily leaving, we are being pushed away.

  6. Anonymous on October 28, 2009 at 8:45 pm

    If this keeps up it will cost $100 for a movie ticket and the producers will be lucky to still break even. I am in two unions and I can't stand unions. And by the way…SAG is one of the only unions out here that does not and will not get you a job of any type. I was in the carpenter's union for years and they have a list of out of work people to employ and most other unions do too but SAG has nothing to do with that. I know it's a specialty business but still. And the insurance they offer is a joke! They will let about anyone in the union now days but don't want anything to do with covering them!

  7. Anonymous on October 31, 2009 at 6:17 am

    This article seems to be about unions… I have no idea since you don't explain all your acronyms… Wish I could have read it! All your other blogs seem so succinct and relevant…

  8. Billy Dean on November 1, 2009 at 7:18 am

    Great job Frank!!! To anonymous, how about UAW for a acromym. United Auto Workers, they have destroyed an industry. It's true, my father worked for General Motors for 30 years and retired in 1989. He got what the unions promised, or did he? He has so far. The demands the UAW made on the auto makers were not sustainable. All the liberals want is sustainability. My father talked about the UAW and their political ties and how politics became more important than the workers. How they where out to destroy the companies, they did it!!! Now the us Auto makers are done!!!

    Frank your piece can be applied to a broader view of the country. Now all we need is for the Unions and the Government to get together and we are all finished, oh wait, that's already happen!!!

  9. Phantom of Pulp on March 30, 2010 at 10:39 am

    This is a brilliantly worded and argued piece, Frank. I've been reading your blog for a while, but this is the first time I've felt compelled to put pen to paper.

    It is sad to read how counterproductive SAG has become; their sense of entitlement is mind-boggling. Without companies like Nu Image, SAG's members would not even have jobs. It's disheartening to see how far the pendulum has swung in the union's favor; there is no middle ground.

    A producer friend of mine spends too much of his life trying to wrestle bonds back from SAG after a production has been completed and has moved into post-.

    Thanks so much for highlighting the folly of SAG's current practices — practices that will, ultimately, harm their members.

  10. SEIU and CTA Targeting Entertainment Unions on February 16, 2011 at 10:39 am

    [...] written about the Michigan tax incentives in the past.  One such article about Michigan is “SAG and the Independent.”   These tax incentives are keeping billions of dollars and hundreds of jobs in the United States [...]

  11. Russell Armstrong on February 28, 2011 at 7:50 am

    Russell Armstrong Reckons This Is Cool…

    [...] Wonderful news thought I would like to track-back to it..BTW :) [...]…

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