SAG-AFTRA’s Strike-Ending Deal Wasn’t Finalized Until Hours Before Its Approval

Late last Tuesday, 27 members of the actor’s negotiating committee — with another 18 on Zoom — huddled for a third straight day at the SAG-AFTRA headquarters in Los Angeles to meticulously review the “best, last and final offer” from the Hollywood studios.

As the committee prepared to vote on whether to approve the deal and declare the 117-day actors strike over, David Jolliffe, a 25-year veteran of SAG-AFTRA contract negotiations, urged president Fran Drescher to wait just one more day. The key compromise on streaming compensation made with studio executives, he implored, needed to be locked in before any vote could be made.

“I told Fran and the committee that we should take a step back, spend the night and wait for a response from the AMPTP, because there were key points that we needed to ensure were going to be in this contract for us to approve it,” Jolliffe told TheWrap.

In the end, SAG-AFTRA did not finalize its agreement with the Alliance of Motion Picture and Television Producers until just hours before announcing its approval on Wednesday evening. The $1 billion agreement ended six months of strikes that had paralyzed the entertainment world.

The turbulent five weeks of on-and-off talks to end the actors’ strike were in some ways similar and in other ways very different to the talks that led to a deal between the AMPTP and the Writers Guild of America.

While there were as many counterproposals exchanged between SAG-AFTRA and AMPTP — as well as a studios-imposed pause in the talks as they did with the WGA — there was no “finally, they f—ing get it” breakthrough.

The talks that went from Oct. 2 to Nov. 8 were the first between the two sides since the strike began. The impasses that had prevented a deal from being reached back during the summer still remained, and it took weeks of talks between AMPTP President Carol Lombardini, the studio CEOs, SAG-AFTRA chief negotiator Duncan Crabtree-Ireland and Drescher to come to a compromise.

Impeding the road to agreement, Crabtree-Ireland told TheWrap, were discussions on artificial intelligence, which were an active part of negotiations from start to finish. They required input from a wide range of studio representatives because of the impact the technology has on IP rights, the production process, labor compensation and many other issues.

“It was a complex issue that was made more difficult by the fact that we had gone more than two months without talking,” Crabtree-Ireland said.

Beyond those principal figures, there were dozens of others ironing out the finer details. Negotiating committee members like Jolliffe, Frances Fisher, Shari Belafonte and chief contracts officer Ray Rodriguez spent many days in side rooms with AMPTP representatives, joined by attorneys for both sides.

It was in these talks that key contract gains such as an increased relocation allowance for series performers, protections against burdensome requirements for auditions, and the inclusion of performance capture work under union coverage, were locked into the contract.

Throughout the process, Drescher was insistent that the CEOs be present to discuss all the issues in the contract. With the guild aiming to build a deal that reflected the dramatic shifts Hollywood has undergone in the era of streaming, the president felt it was necessary to have the top executives’ input every step of the way.

“We said [to the AMPTP], ‘We’re going to go over your heads. We want to talk to your bosses,’” Drescher told TheWrap.

It was an approach that chafed the studio execs, according to two insiders with knowledge of the AMPTP side of talks. The CEOs, while keeping abreast of how talks were progressing, were expecting to only negotiate directly with Drescher and Crabtree-Ireland on the biggest issues on the contract.

“All the execs wanted a deal to get done, but there’s a reason why [Lombardini] and all the AMPTP lawyers do much of that contract work,” one insider said. “The CEOs have companies to run and wildly different schedules, and while they know the key issues, they aren’t as deeply involved in the contract language as the labor reps who are hired to represent them.”

Streaming fund lines in the sand

But the CEOs did need to be on hand to construct the key compromise that ended the strike: the new fund that will be established through streaming performance bonuses to help working class performers get a new source of income that had been lost from years of eroding linear TV residuals.

The issue led the AMPTP to break off talks on Oct. 11, just hours after receiving a SAG-AFTRA counterproposal including the revenue-sharing proposal. The stalemate ended on Oct. 23 after Disney CEO Bob Iger reached out to Drescher and Crabtree-Ireland, saying there was an urgent need to finish the deal and get the industry back to work.

Even after talks resumed, any contract involving SAG-AFTRA’s proposed system of sharing a percentage of a streaming service’s revenue would prove a dealbreaker for the studios. The executives felt it was unfair for the union to ask the studios to share in the riches of a show or film’s streaming success while leaving them to take the hit on any failures.

Studio insiders say that while all the CEOs present at the meetings made that argument, it was Netflix CEO Ted Sarandos who particularly drove home to SAG-AFTRA that the AMPTP would not agree to revenue sharing in any way, and whatever streaming compensation model was created needed to be based around the performance bonus model agreed to by the WGA.

“Every studio is still trying to get these streaming services to turn a profit,” one insider said. “There was no way that revenue sharing was ever going to fly.”

Drescher and Crabtree-Ireland eventually accepted that hard line, and presented a hard line of their own: They would not yield on the fund intended to create a new stream of income for actors.

As Drescher put it, the number of shows that would have qualified for performance bonuses under the WGA’s model were a “thimbleful” of the thousands of titles added to streaming services each year. Agreeing to the same terms on streaming bonuses that the WGA agreed to would have left thousands of actors who don’t perform on those top-performing titles in the same precarious position: With their acting income at a fraction of what they once got in the era of linear TV, pay TV, and physical home video residuals.

“I told myself that money is money, no matter where it comes from, but we explained to them that we needed another source of revenue because the people that were working in the streaming platforms didn’t have the tail of earnings that they did in linear television,” Drescher said.

As the talks dragged into November, further talks between Crabtree-Ireland and the AMPTP led to the breakthrough: SAG-AFTRA would agree to a performance bonus structure with more money than what was offered to the WGA. While 75% of that bonus money would go to the actors on shows and movies watched by a certain percentage of a streamer’s subscribers, the remaining 25% would go to a new fund run by trustees from the guild and the studios to be sent to all actors who work on streaming services.

But when SAG-AFTRA presented its final offer on Nov. 4, the guild found that the studios had not yet included the fund in the contract. The AMPTP assured SAG-AFTRA that it would be there. But Jolliffe insisted that was not enough.

AMPTP insiders told TheWrap that the fund was not in the contract when the studios presented the final offer because their lawyers were still reviewing the proposed fund to ensure it was legally sound. The concern was that such a fund could face a legal challenge for violating anti-bribery statutes in the Labor Management Relations Act forbidding employers from paying union officials.

AI ‘synthetic performers’ protections a final sticking point

Those lawyers were also reviewing the contract’s AI provisions, as they had been for much of the final week of talks, particularly clauses sought by the guild regarding the potential use of actors’ performances to create “synthetic performers,” or AI-generated characters that are not strictly replicas of real-life actors.

“The guild was arguing that if an actor’s performance was used to train AI to create a whole new character, that actor was still entitled to money,“ a studio insider said. “That’s something no court has ever ruled on.”

On Wednesday morning, the AMPTP reached out to Crabtree-Ireland and confirmed that the fund and the synthetic performer protections would be included in the contract. The studio lawyers determined that the streaming fund would not violate anti-bribery labor laws as the funds were specifically earmarked for rank-and-file SAG-AFTRA members, not officials. And the two sides agreed that an actor could be entitled to consent and compensation over a synthetic performer if that AI character used a distinct facial characteristic of the actor.

With that guarantee locked in, SAG-AFTRA’s negotiating committee unanimously approved the deal, and at 5 p.m. on Nov. 8, the guild sent out an announcement that the strike was over.

One day later, in a phone conversation with TheWrap, Drescher said she felt “grateful, exhausted, relieved and triumphant all at once.” While she and her negotiating committee never wavered in their insistence that the strike wouldn’t end without a fair deal, she acknowledged the immense anxiety that had gripped countless Hollywood workers who had spent months dealing with the financial and emotional stress of the strike. She said she didn’t take any of that sacrifice for granted.

“We could feel the pressure mounting in those last few days. I don’t think any of us were getting much sleep,” Drescher said. “It was so great that it was almost unbearable, but I am so proud of the work that every member of our committee, all of them taking this on as volunteers, did to get us to the end of this long fight.”

For David Jolliffe, whom has now finished his ninth SAG-AFTRA contract cycle, this one is by far his proudest.

“Every time we’ve finished negotiations, I’ve felt disappointed that we lost out on something important,” he said. “Definitely not this time.”

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