Unions Spotlight Merger Overview

The Screen Actors Guild and the American Federation of Television and Radio Artists have created an extensive slide presentation reviewing their proposed consolidation—including citing both unions' deficits, a legal merger of their struggling health plans, and the possibility of union jurisdictional war if a merger doesn't occur.

Financial figures listed in the slide-presentation report have already received rebuttal from Kent McCord, SAG's national treasurer, who said he couldn't support consolidation in its present form. The two unions' presidents and national boards back consolidation. Both unions' boards will meet Sat., April 12 and Sun., April 13, in New York and Los Angeles via videoconference. At that time, they'll consider a proposed constitution and business plan for the new union.

In the extensive slide presentation published on their consolidation website—www.consolidateaffiliate.org—late last week, SAG and AFTRA show an aggressive effort to inform members of the two unions' relationship over the last two decades. It includes their decision to begin co-negotiating their major contracts in the 1980s, a solid push toward cooperation with the idea of an eventual merger.

The PowerPoint report, involving 78 slides, also stresses that both unions are currently looking at budgets in the red, with SAG carrying a debt of $6.02 million, and AFTRA a deficit of $2.01 million, both based on their Fiscal Year 2003 budgets. While consolidation could eventually cut duplication and reduce expenses, the new union could possibly be looking at a dues increase should a deficit carry over, although the slide presentation doesn't mention that point.

Last weekend, McCord charged that the slide presentation was overstating SAG's negative bankbook. He complained that SAG's stated $6 million deficit projection was inflated nearly three times higher than an actual deficit of $2.3 million. Pamm Fair, SAG's deputy national executive director, told The Hollywood Reporter in a Monday story, "The $6 million figure was the projection in the budget approved by the board for the fiscal year ending April 30, 2003. We have implemented many cost-saving efficiency measures as part of restructuring, and we are hopeful that the projected deficit will be reduced. The last quarter has not been calculated, but the actual number will be reported at the April meeting along with next year's budget. Once those numbers are reported, the website will be amended to reflect the actual numbers."

But McCord complained to Back Stage on Monday afternoon that the $2.3 million figure was more accurate, and that SAG should remove the inaccurate $6.02 million figure immediately from its website and replace it. He said he felt the $6 million figure was misleading the membership and the public.

"It exemplifies the lack of correct information being put out there," McCord said. "I'm the treasurer of this union, and I'm questioning that information. To put it up for our members and the rest of the world, and stick with the $6 million number that's absolutely incorrect, that's wrong. It's only an estimate. It's based on a whole lot of factors."

McCord is an opponent of Melissa Gilbert, SAG's national president, who ran and won on a separate slate from McCord. Gilbert and the national board, made up mostly of her supporters, are pushing for the consolidation.

While McCord didn't mention the Gilbert forces by name, he apparently was referring to them as he stated, "They want me to play stupid. They want to put a number up that's incorrect and for me to stay quiet. I'm sorry; I was elected to keep members informed to the true nature of the financial condition of this union."

California law allows members to look at their organization's books "for any reasonable cause," McCord said. He added he was encouraging members to review SAG's financial records.

"If we're going to make the most important decision in the history of this union since its founding, we need true and factual figures, not an estimate to create an impression."

McCord, on Monday at least, didn't discuss any other points of concern with the extensive slide presentation, which included the two unions' earnings by contract in 2001. SAG's six agreements brought in $1.5 billion; AFTRA's nine pacts garnered $996.08 million.

The slide report also acknowledges the depth of dual membership, i.e. the number of performers who belong to both unions. It shows SAG with a total membership of 117,227 and AFTRA's total of 77,673. Of those, 44,671 belong to both unions.

Pension and Health Plans

When SAG and AFTRA attempted to merge in the late '90s, they found problems with pension and health, because the trustees of each union's pension-and-health funds couldn't find a way to merge the two trusts, which are independent from the unions themselves.

Aware of the vital importance members place on the health and pension trusts, the consolidation report includes a slide listing five "challenges" to both unions' pension and health plans:

• Both plans currently have "sufficient assets" to meet "earned obligations," but the poor economy and "the stock market crash puts in question both plans' ability to provide similar benefits in the future."

• The country's health-care crisis has forced both unions' plans to raise qualifications and co-pays as well as impose premiums.

• Double-digit inflation in health-care costs is rapidly outpacing cost-of-living increases.

• Members find it harder to qualify for health-care coverage or pension credits due to growth of nonunion productions in developing media, as well as members' earnings being split between the two unions' jurisdictions.

• The plans' trustees need to find "proactive solutions" or both unions' plans will "continue to suffer."

While the slide states that the plans have "sufficient assets," SAG's health plan last September announced it was suffering a multimillion-dollar deficit. Bruce Dow, SAG's health and pension plans' administrative director, told Back Stage at the time that the health plan was running a deficit approaching $36 million, with a projection of it reaching $46 million. But he said the changes made last fall, which would affect the health plan's 31,500 eligible participants—including tightening eligibility and starting to charge monthly premiums—should remove the deficit by the end of 2003.

But nearly 10,000 of those participants apparently opted out of the plan this year when the new $50-$65 premiums took effect in January, according to Variety.

AFTRA's health fund has also announced it will begin charging its first premium in July, and will also tighten eligibility requirements.

Jurisdictional Conflicts

The slide presentation explains to members the two unions' efforts over more than two decades to "resolve or minimize jurisdictional conflicts." The efforts range from the Phase One compact of 1981—in which SAG and AFTRA agreed to co-negotiate their major agreements, such as the feature-film-and-TV pact and the commercials contract—to multiple merger plans over the 61-year period from 1938 to 1999.

Now, as the two unions consider consolidation, the slide presentation lists their options as (1) continue the status quo; (2) divide jurisdiction; (3) war; (4) resubmit the 1998 merger plan, which SAG members defeated; or (5) restructure and realign.

SAG and AFTRA of late have had jurisdictional struggles over digital production. SAG has jurisdiction over film productions, and AFTRA rules taped shows. They've yet to reach a settlement on digital, so they've agreed to negotiate the productions between themselves on a case-by-case basis. Realizing that producers of both film and tape are turning to digital, the two unions are seeking a way to resolve their jurisdictional differences.