Ad Industry Reaches Tentative Accords with SAG-AFTRA on Commercials

Early on the morning of April 1, 2009, the Joint Policy Committee of the major advertising industry groups reached a tentative agreement on new contracts that will govern the compensation provided to actors represented by the Screen Actors Guild and the American Federation of Television and Radio Artists, through March 31, 2012. The agreements still need to be approved by the union boards and members, with voting expected by the middle of May. Leading the team representing the Joint Policy Committee was Rimon Partner Douglas J. Wood.

The basic terms call for an increase of about 5.1 percent in actors’ compensation over the next three years, and higher advertiser contributions to the unions’ health and retirement funds. However, over time, a limit on the contributions advertisers need to make to the unions’ pension and health benefits—up to the first $1 million of salary—will also go into effect.

The tentative accords include a slight increase in fees for commercials that run in new-media formats, but specifically set aside funds for a two-year study focused on examining and restructuring the compensation formulation for actors in commercials to a model whereby they would be paid based on number of viewers (i.e., ratings), and not merely on how many times the commercial airs.

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