Archive for April, 2008

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Former SAG General Counsel David White Discusses the Potentially Devastating Actors Strike!!!!

April 14, 2008

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DAVID WHITE, ESQ.

Mychal: Hello Counselor, I hope you are well! I appreciate you coming aboard. So, it has been over one year since we participated as panelists/speakers at the American Bar Association (“ABA”) sponsored “Digitalization and Dollars” seminar concerning the entertainment industry collective bargaining agreements. But before we focus on the potential Screen Actors Guild (“SAG”) strike, how did you, a “Rhodes Scholar”, end up in Hollywood?????

David: Hello Mychal. Great to be here! Your question is a good one and one that I frequently ask myself. My career has taken a number of surprising turns: I started by managing a non-profit in my early 20s, then law school at Stanford where my wife, a social worker by training, started writing television scripts. We came to Los Angeles so that she could have a shot as a writer and I ended up, to the surprise of my former colleagues, at a big firm, O’Melveny & Myers (“O’MM”), in what was then known as their labor & employment department (which I think has now been folded into their general “Adversarial” department). SAG was a client that was assigned to me. About eight months after working with SAG’s staff and legal department, Bob Pisano, SAG’s CEO [now COO at MPAA] and a former O’MM partner called and asked if I would come on as SAG’s general counsel. The offer was totally unexpected and it was a fairly anxiety-producing experience at first but, as with almost anything, you spend 6 months learning the ropes from 6 a.m. until late at night, and you start to figure things out. I got that phone call from Pisano about 6 years ago and, here I am.

Mychal: Impressive to say the least. Now, what intrigued you about the job as General Counsel (“GC”) of SAG?

David: Well, there were a few factors involved. First, I really like executive leadership. As I said, I started my career off as the executive director of a neighborhood-based, non-profit called “Youth Opportunities Unlimited, Inc.” But, also the GC position at SAG involves a range of skills in areas as diverse as policy analysis, risk management, strategic planning, operational and budget management, politics and, as you might expect, the law. There is never a dull moment and it requires you to be alert and forward thinking at all times. Really, aside from the internal politics which can be shockingly fierce, it’s truly a fun gig, at least for awhile.

Mychal: Cool. And, what is the business model for your company “Entertainment Strategies Group, LLC?”

David: It is a simple business model. Entertainment Strategies Group is a consulting firm that assists in simplifying the complicated set of rules and provisions that govern guilds, unions and their collective bargaining agreements. ESG provides three basic services: consulting, training, and “signatory services,” which is where we manage the discrete process connected to signing up with all the unions associated with any film production. Essentially, we help producers, attorneys, and other industry professionals navigate union regulations and union agreements, so that they can avoid problems or resolve them quickly, and be cost-effective while being compliant with the rules. Our consultants have experience and relationships with the staff and members of various unions, which often allows us to help resolve problems when others can’t.

Mychal: Exciting! Ok, so let’s tackle the matter involving the potential Actors strike. So, the collective bargaining agreement between SAG and the Alliance of Motion Picture and Television Producers (“AMPTP”) expires on June 30, 2008. Essentially, what will SAG union members be fighting for?

David: SAG will be fighting for what it believes to be the future, not unlike the DGA and WGA. One way of describing their strategy is to divide it into two simple categories. First, there are forward looking issues. SAG wants a good deal in New Media where it can assert its jurisdiction in New Media productions and establish a residual rate that is higher than current residual rates. Second, SAG will be focused on improving its position regarding wages and working conditions under current business models. These issues include improving DVD residual rates, adding notice and consultation rights regarding product integration, and attempting to assert its jurisdiction in reality television.

Mychal: Last week, SAG’s former alliance with American Federation of Television and Radio Artists (“AFTRA”) broke off. Why did this occur?

David: Well, although SAG and AFTRA are sister organizations, they have shared but distinct interests which are, in some ways, inherently competitive. They face a particular problem that will only continue to grow as digital production becomes the dominant medium for movie-making. Traditionally, SAG has asserted its jurisdiction in “film” production and AFTRA has asserted its jurisdiction in “tape” production such as was used in daytime television. However, as digital production increases, there are few guidelines for each union to follow – the jurisdictional lines are becoming blurred. This gray area lies at the heart of their conflict so they may continue to encounter friction as each group seeks to expand its jurisdiction. There are also issues that you’ll read about in the trades, involving personality differences and the allegations of mutual raiding of programs.

Mychal: So, if AFTRA resolves its issues with the producers, then where does that leave SAG?

David: There are two basic theories on this. First, one can argue that AFTRA’s separation will weaken SAG’s bargaining position. Assuming that AFTRA agrees to the basic template agreed upon by the Director’s Guild of America (“DGA”) and the Writer’s Guild of America (“WGA”), then these three unions agreements, along with IATSE’s anticipated agreement, make it harder for SAG to realistically chart a separate course in negotiations. So, SAG will likely have a reduced bargaining position. However, it’s not impossible for the other theory to apply, which is that, by detaching itself from AFTRA, SAG’s current leadership is unencumbered by AFTRA’s more moderate leadership. This would leave less internal friction in SAG’s negotiation room, leaving SAG more emboldened to go their own, more aggressive way. While almost everyone disagrees with this, you can never forget that SAG can still shut down film production and much of television. It’s not impossible that they decide to do this.

Mychal: Although a settlement was reached, I have heard a lot of enormous disappointment arise from the one hundred (100) day WGA strike. Writers complained that they lost jobs, some their careers, and striking just before the Holiday season was poorly planned. You know, people do have to buy gifts for the Holiday season! And, not to mention various staffers, agents and managers, etc. became unemployed. In the end, what did the WGA really gain?

David: Internally, and from the WGA’s leadership perspective, the strike was a success. Look, they took the entertainment industry by surprise. They had a significant impact on the industry because it had not fully stockpiled itself with quality product. Their leadership – and many of their members – believe that they are singularly responsible for the smooth and beneficial DGA negotiations, because of pressure applied through the strike. So, while the networks and studios may think that’s “total crap” (and they do), the WGA is still celebrating and still getting positive press in the labor movement. Now, the flip side is that the employer-side negotiators that I’ve talked to confirm that the producers gave the WGA exactly what they intended to give them, and not a penny more. Meaning the WGA got no gain from the strike, and achieved no benefits. Where the truth lies will probably always be a matter of one’s perspective.

Mychal: Statistics show that the 100 day WGA strike had a $2.5 billion dollar impact on the Los Angeles economy. We are not just speaking about actors, but both above the line, below the line, agents, managers, vendors, retailers, etc. Do you know what the cumulative multiplier effect of a potential 100 day SAG strike would be?

David: (sighs) No question about it, such a strike would be devastating, particularly on the heels of the 100 day WGA strike. People are only getting back on their feet now by paying off credit card and home equity debt they used to get through the first work stoppage. Even if some film has been stockpiled by then, SAG can basically shut down new production, which means no work for many people. Film and television involve images and if people are not present to provide those images, then you have no film and no TV product, at least not quality product using professional performers. No question about it, a SAG strike, if it lasts, would wreak more havoc on the industry, especially on below-the-line workers. I hope it doesn’t happen.

Mychal: Wow! Now, let me ask you a hypo. It is July 1st, and SAG goes on strike. I am a producer with my production slated for July 15. So, I attempt to circumvent SAG jurisdiction and shoot my film in Bulgaria with SAG talent. Is this a feasible option, and if not, then what are the consequences to both the producer and actor?

David: It certainly happens on occasion, but as a general rule, it is a violation of SAG rules and regulations. SAG’s “Global Rule One” would apply here, meaning that SAG members must work under SAG contracts anywhere in the world. So, working on a non-signatory or struck production, even in Bulgaria, would place a member’s status with the guild in serious jeopardy. Remember, you are dealing with a performance on camera so the evidence against you is pretty irrefutable once you’re caught. As has been done in the past, I would expect SAG to investigate both union and non-union members who crossed the picket lines to work on struck productions. For union members who are caught, severe penalties can be assessed against you. All of the unions take this principle seriously, that members cannot work on non-signatory projects, especially during a strike. Even non-union members can face penalties for crossing a picket line, including delayed eligibility for SAG membership for a certain period of time or even ineligibility.

Mychal: In your opinion, what is the likelihood of a SAG strike?

David: I think while the potential exists, the likelihood has been reduced by recent activities.

Mychal: OK, since we are both Black-Americans, and in the midst of this exciting but draining Democratic primary, I have to ask this pressure question. What has SAG done to present opportunities for minorities and women?

David: Another good question. First, remember that SAG is not an employer and therefore has a limited set of tools at its disposal to directly increase employment opportunities. Having said that, SAG can and does provide some tools to open doors for actors of color, women and other underrepresented groups. There are traditional ‘Networking Events’ where SAG members can meet other members, agents, independent producers, etc., and where such relationship building can lead to casting opportunities and actual jobs. There are also what we called ‘Exposure Events,’ where actors have the opportunity to perform in front of industry insiders, often working alongside WGA members who write the material being performed. SAG’s educational events range from sponsorship or participation in panel discussions to improve industry awareness about the need to have movies and television reflect today’s diverse society, and, on an annual basis, distributing Data Reports on the state of employment for underrepresented groups throughout the industry (which other Guilds do as well). Perhaps most useful is SAG’s casting database, which makes it easy – at least in theory – for producers to find performers with distinct skills and physical characteristics for certain roles. Some of these tools yield great results while others yield less, but together they form a fairly robust attempt to help performers have a fair shot at breaking into the acting business.

Mychal: Yeah, I have read a lot of these Data Reports. But truthfully, a lot of these reports are influenced by corporate objectives. Personally, it is like a pharmaceutical company sponsoring a randomized double-blind placebo study with one of its own drugs involved and then finding it to be the most efficacious. So, how pure and accurate are these reports?

David: It’s a good point. The guilds use the information they receive from producers so the reports are about as accurate as the producer’s production reports. It’s true that the full universe of employment activities may not be captured, for better or worse (usually for worse).

Mychal: OK. Fair enough. So, let’s switch gears. What is your best advice to those in the business for both the new and established?

David: One of the most important rules of this industry is one you’ve heard before: relationships, relationships, and relationships! Knowing the right people can carry you a long way around here. For example, I was just at lunch with a friend who is a talent agent. She thought our waitress would do great in commercials. Although the waitress was already represented for commercials, she picked up on my friend’s vibe, and walked away with a new print agent. She saw an opportunity, stopped for a moment to make contact and established what will likely be a very important relationship to her future. Not a perfect example of the “relationship” point I’m trying to make but you get the picture: you have to take opportunities very seriously and build relationships as you go – you never know which one will be vital to your career.

The other point that I would make is for professionals: your value will improve significantly as you learn the whole business. Avoid “silo expertise,” where you are satisfied to learn only pieces of the business. A career in this industry is more of a marathon than a sprint. Take the time to develop a sustainable practice, built on an ever-increasing foundation of knowledge and relationships, instead of going for the get rich quick path. Read and educate yourself with the trades but also read explanatory books on film and television finance, production and distribution, on the basic law important to the industry and on a range of other issues. Get real experience whenever and wherever you can.

Mychal: Great advice! Can you tell us an anonymous production or studio

exec nightmare?

David: Sure, but I would have to dispose of you afterwards (LOL). Honestly, I can not safely tell. But, I will say that ego and insecurity drives a lot of the behavior in this industry. And, you are way better off if you do not let these things drive your own conduct.

Mychal: (LOL) OK….last question and thank you for your time! Why should entertainment and labor industry utilize the services of Entertainment Strategies Group, LLC?

David: Almost every transaction in this industry imputes or relates to the provisions of one or more of the collective bargaining agreements. It is important for professionals to understand the agreements and the way in which each union enforces the agreements, in order to understand the rights and obligations they have vis-à-vis Talent, in order to fully understand the contracts they draft or must enforce, or to litigate or arbitrate issues effectively.

We find that lawyers, producers and other professionals get really excited that our service provides quick answers to complex issues. Our expertise allows us to effectively service our clients who ask about specific issues, as well as help them work through complex projects. We help our clients (especially lawyers) look like geniuses to their own clients. For example, we recently retained a client engaged in a writers “separated rights” issue. The client could either take two weeks to research and learn the ins and outs of “separated rights” or call us to get a quick primer. This client was a lawyer and, by helping her with this discrete issue, she could remain focused on the main issues of her legal battle while we helped her with this minor but important point. We have helped clients understand basic residual structures, the relationship between provisions in SAG and ACTRA (the Canadian performers’ union) agreements and a host of other issues. We do not act as lawyers but rather as consultants, so we do not compete with other professionals.

The End

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BEVERLY HILLS FILM FESTIVAL SEMINAR SPONSORED BY MINDFUSION LAW

April 14, 2008

MindFusion Law Sponsors a Film Seminar at The Beverly Hills Film Festival

These panelists will mentor and answer your questions regarding financing, producing and distributing independent feature films. Topics will include: Genres (what’s hot and what’s not!); optioning and purchasing properties; corporations and limited liability companies; raising financing and packaging feature films, above and below the line, working with the unions (SAG, WGA, DGA, IATSE); selling an indie film to distributors; distribution contracts; lawsuits concerning indie films, etc.
www.mindfusionlaw.com

Moderator: Mychal Wilson, Esq. (Partner, MindFusion Law Corporation)

Panelists:

Tifanie Joudeh, Esq. (Attorney-At-Law, Entertainment, Corporate & Business Affairs) Henry Boger (President, Freefall Films, Inc. c/o Yari Film Group, LLC) James Fagen, Esq. (Counsel, Business Affairs, Genius Products) Stu Pollard (Founder, Pollard Film Consultants) Paul Battista, Esq. (Partner, MindFusion Law Corporation)

FRIDAY, APRIL 11

CLARITY THEATER
100 N. Crescent Drive
Beverly Hills, CA 90210