George Clooney, Ben Affleck, Scarlett Johansson and a group of other A-listers presented a proposal to SAG-AFTRA leadership on Tuesday that they hoped would help end the 98-day actors’ strike.
But the proposal was rejected on Wednesday by the union’s negotiating committee, which is sticking to its demands formulated in negotiations lasting several weeks.
To understand why, it might be helpful to delve deeper into the proposal.
There are two main elements: an increase in contributions for high-income actors and a change in the balances to ensure that low-income actors are paid first.
Contribution increase
Under current rules, SAG-AFTRA members pay a base contribution of $231.96 each year plus 1.575% of covered income up to $1 million. The A-Listers’ proposal would eliminate this cap and subject all covered acting income to the 1.575% tax limit.
Clooney estimates this would bring in $50 million a year. (That sounds high because it would mean actors making about $3.2 billion a year over the cap, which equates to about 160 actors making an average of $21 million a year, which is a reach.)
More specifically, the main problem is that the SAG-AFTRA strike is not about contributions. SAG-AFTRA strikes to increase actors’ income, not to increase union funding. The two things are not interchangeable. An increase in union dues could not offset studio payments to actors or to actors’ pensions and health funds.
The dues are also irrelevant to the collective bargaining process because they are not subject to negotiations between the union and the Alliance of Motion Picture and Television Producers. They are set by the SAG-AFTRA national board, which would have to conduct a separate process that would involve selling off high-earning actors based on the idea of paying more to the union.
And while SAG-AFTRA would likely find a use for extra money, the union isn’t suffering from a decline in dues. The union said it received $127 million last fiscal year, a significant increase from the previous year as production returned to pre-pandemic levels.
Fran Drescher, the president of SAG-AFTRA, said in an Instagram video posted Thursday evening that contributions cannot be used to fund pension and health insurance plans.
“It’s kind of apples and oranges,” she explained. And the increase in contributions, she said, “has no impact whatsoever on the contract we enter into.”
“Bottom-up” residual structure
The group also proposes a residual structure in which the lowest-earning actors would be paid first and the highest earners would receive residual payments last.
This seems to confuse residuals with profit sharing. Prominent actors can negotiate a percentage of profits to be paid out on the backend in a “waterfall” system. As more profits are made, money flows further down, so where an actor is positioned in the waterfall makes a big difference.
That’s not how residuals work. Remaining amounts will be paid out simultaneously to everyone who is entitled to them. Every time a project is sold to a new media outlet or rebroadcast on television, union contracts spell out exactly who gets what. Remaining amounts have nothing to do with winnings. There is no “waterfall” and it doesn’t matter where an actor is positioned.
Drescher also addressed the remaining suggestion in her Instagram video.
“This was reviewed by our very experienced union contract staff, negotiators and attorneys and they said unfortunately it was not substantive,” she said. “Honestly, it’s a very nuanced house of cards.”
In other words, none of these proposals address the issues that have kept actors on strike for 98 days. Those issues are: a union proposal to pay actors a share of streaming revenue, an increase in minimums to keep up with inflation, and regulations on artificial intelligence.
The proposals appear to be motivated by a sincere desire to end the strike, coupled with a sense of noblesse, suggesting that high-earning actors should make sacrifices to reach this resolution.
However, from the perspective of the SAG-AFTRA Negotiating Committee, the proposal appears to weaken the sense of unity and commitment to the committee’s proposals – which is critical to reaching the best possible agreement. It also suggests that high-earning actors should somehow step in to pay for things that studios have refused to pay for — thus easing pressure on studios to step up.
Asked what high-profile actors could do to reach a solution, one person involved in the talks suggested joining a picket line.