Reed Smith Client Alerts

On April 2, 2019, The Joint Policy Committee, LLC (JPC), led by Reed Smith partner and Chief Negotiator, Stacy Marcus, and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) reached an agreement on the 2019 Commercials Contract and Audio Commercials Contract. The National Board of SAG-AFTRA unanimously approved the deal that will now be voted on by SAG-AFTRA members. The JPC has released the memoranda of understanding on its website.

Authors: Stacy K. Marcus Michael S. Isselin

The 2019 negotiations focused on three key goals: 1) innovation; 2) leveling the playing field between signatories and non-signatories; and 3) simplification. Below is a summary of the key changes made to the commercials contract (the contract) to accomplish these goals during the new three-year term, April 1, 2019 through March 31, 2022.

Innovation

  • The contract includes a new, simplified “Alternate Compensation Structure” (ACS) available to signatory advertisers and signatory advertising agencies on June 1, 2019.

a. “Full Bundle” (Upfront Plus) option:

  • Session fee plus flat use fee for one year of use.
  • Includes up to 10 Class A uses and unlimited use in all other media.

b. “Made For Digital and OTT Bundle” (Digital Upfront) option:

  • Session fee plus flat use fee for one year of use.
  • Unlimited use on Internet, new media, and over-the-top (OTT) platforms.

c. “A la Carte” (Upfront Flex) option:

  • Session fee plus guarantee.
  • As with celebrity agreements, use is credited against the guarantee.
  • Flat rates for each 13-week cycle of use based on five consolidated media silos.
  • Class A uses may be credited or purchased for $100 per use.

d. Signatory advertisers and signatory agencies who elect the ACS, will also have extended and more flexible editing rights. There are three categories of edits: 1) permitted edits (free); 2) paid edits (flat fee payment based on session fee with no additional residuals beyond the base spot); and 3) addressable edits.

e. These new ACS benefits will be significantly more flexible and cost effective than the prior contract.

  • SAG-AFTRA recognized Association of National Advertisers’ (“ANA”) #SeeHer initiative and agreed to work together with the JPC on joint events and other opportunities.