What's in It for Agents?

While the Screen Actors Guild and the Association of Talent Agents are still at the bargaining table after more than a year of suspended talks, the outlook remains dubious. One inside source on the negotiations described the chances of settling a new contract as being around 50-50 at the moment. Could this be the end of the franchise agreement that SAG has used to regulate agents for decades? The odds are discouraging, and one question that has arisen among many agents is: Who really needs a franchise, anyway?

Most agents have yet to begin making major changes in their contracts with clients. They're respecting the ATA's request that they continue to comply with the old contract, Rule 16G, so it's "business as usual" unless negotiations collapse. Yet a number of agents are feeling they'd be better off without the franchise.

Said one agent, "Everybody that I've spoken to just had no interest whatsoever in coming to an agreement with the Screen Actors Guild. I can't see agreeing to any of the proposals SAG put on the table. When I read them I thought it was a bad joke. I had hoped that we'd quit waiting 18 months ago."

"That's the general sense at the ATA meetings," said another agent. "Most of the agents are like, Why are we even bothering?"

The most publicized stumbling block at negotiations has been the issue of financial interest, in which agents are seeking the ability to own interests in production companies and vice versa. Agents also want the ability to take commissions on residuals for reruns in the cable and syndicated markets. Yet there are a handful of other less publicized issues on the table that smaller agencies find troubling.

One of SAG's current proposals is to require agents to post a $1 million surety bond in order to stay in business. "What are they thinking?" said agent and agency owner Bonnie Howard of Howard Talent West. "If they do that, they would put 99 percent of all agencies out of business.

"Another issue," continued Howard, "is that they don't want sole proprietors, like myself, to be able to sign contracts. That's crazy. I'm theatrical agent. There is no other theatrical agent here. I also happen to own the business. So what do I do? Get a secretary to sign it?"

SAG has also proposed that agents begin submitting periodic reports to their clients of all the submissions made on that actor's behalf. "I would need an entire additional staff member working full-time to do something like that," said one agent. "The only point that makes is to baby someone, hold their hand, and say we're doing what we're supposed to be doing. And that's ridiculous. If you don't think your agent is representing you, you should be with a different agent."

Continued the agent, "There is also a clause in SAG's proposal in which we as agents would be forbidden to have certain discussions with actors about their legal right not to be a member of SAG. I think that's particularly telling."

"Even renting out a spare room in the office to anyone in the industry is forbidden by SAG," said Howard, "and sometimes that could be the make or break for an agency--if they just had that little bit of help with the rent."

Lasting bitterness over the commercials contract strike of 2000 has made the climate of negotiations all the more tense. Agents had advised SAG against the strike, and when the walkout began to cause them severe financial difficulties, many found SAG unwilling to offer help.

"Look at that commercials strike. I look at it and I freak out," said Mitchell Gossett of Cunningham-Escott-Dipene, an agency that was forced to close its Chicago branch as a result of the strike. "I'm just stunned at the ineptitude of that strike. I mean, that strike crippled us, cost us millions of dollars. Most of us haven't fully recovered, and certainly not the actors. That strike set us back 5 to 10 years, and this is the same union that thinks they are protecting their members?"

Said another agent, "When we confronted them with the fact that many of us were going to go out of business because of the strike, the response we got from SAG was: 'This is a war and war has casualties.' As a group we told them that they were going down a really dangerous path blindfolded, and they just didn't listen."

So, if the franchise agreement were dissolved, what exactly would happen? Some agents are predicting dire consequences for SAG. "I think without a franchise agreement, SAG will go down," said Gossett. "It's not the agencies who are going to go down. Because if you ask an actor, if you say, 'OK, guess what? SAG says you can't work with your agency because they're not franchised.' What is the actor going to do to get work? Go hang out with SAG? SAG never got an actor a single job. They're going to hang out with their agents. They'll say, 'Fine, I'm quitting SAG.'

"The danger is that there will be some companies who will sign a franchise with SAG," added Gossett. "But those won't be the powerful companies or even the best of the companies. And the actors will be put in a bind and they'll have to choose. And they're not going to choose SAG, in my opinion. The big agencies won't sign. So it'll split. It will be divisive and it will split the SAG membership."

Theoretically agents would then sign clients to general service agreements, with guidelines set forth by the ATA. While SAG may make an attempt to turn former agency regulations into state law, this is unlikely, say agents, as it would open the door to regulating managers as well--something the state has so far been loathe to consider.

Would agent commissions rise? "No, no, no," said Gossett. "Emphatically no. Ten percent. The agencies have already put out this code of ethics and responsibility--and these are the larger agencies--which states that no agencies can cap more than 10 percent."

Said Howard, "My in-house agreement with my clients is the same. The rate of commission is not going to go up, unless all these big agencies decide to go for 15 percent in commissions, in which case I would jump on that bandwagon. But I can't be the only one who does it."

What is more likely is that agents would indeed begin to commission residuals in areas such as syndicated programming and reruns on cable and pay-per-view, something they are currently restricted from doing. While anything is possible with the new contract, most agents feel not much would really change in their day-to-day business.

"If this thing went away tomorrow, I'd be doing the exact same thing tomorrow that I did today," said Gossett. "Calling casting directors and producers and getting actors employment, setting up meetings."

However, with the new possibility for agents to own interest in production companies and vice versa, how can the actor protect himself from possible conflict-of-interest situations in which the agent may negotiate a lower pay rate for the actor in order to save the producer money?

"The same way he does now," said Gossett. "By being smart, educated, by knowing the questions to ask, by knowing his business. And if something comes up, and he has a question about it, he should say, 'But here's my quote. Why didn't I get my quote? Why didn't I get more?' The whole business is based on a quote system, on a protocol system, on a precedent system. There should be nothing different in the negotiating."

Indeed, conflict of interest may be less of an issue for the average actor, who typically receives payment at scale. In those cases, argue agents, having a close relationship with a production company would only benefit clients by bringing them more opportunities to work.

"The actor has a responsibility to be educated," said Gossett. "No matter what rules there are, the actor should always be asking, 'Was this the best deal we could get? And how did we get this?'"