FIGHT FOR RESIDUALS

Ask yourself: How are your residuals looking lately...?

ISSUE:
Residuals are what keep us solvent when we are not working in production. They pay our bills and can help us qualify for pension and healthcare. The outrageous fact is that as new technologies evolve, our residuals are consistently being traded away in each contract negotiation.

WHY IS THIS AN ISSUE?
People watch our performances over and over and over again. While we get paid once, production companies and platforms continue to profit from reuse. Our union fought many battles to establish residuals that help supplement performers’ income in the downtimes. However, over the last 20 years, through negligence, bad negotiating and outright lack of fiduciary responsibility, residual formulas have eroded and failed to keep pace with evolving technologies.

Since VHS gave way to DVD 20 years ago, our contracts have consistently failed to maintain our deserved financial share. From DVDs to Cable and now Streaming, the recent contracts have been increasingly inadequate and unacceptable.

“The Great Netflix Deal of 2019”:

  • Against all established practice, the 2019 Netflix Deal was improperly negotiated by staff without any SAG-AFTRA member or negotiating committee input. Contrary to the SAG-AFTRA constitution and bylaws, the Netflix contract was passed without a membership vote.

  • In order to justify hijacking the contract negotiating process, the current national leaders outrageously claimed that Netflix, the industry’s largest employer, did not have a “widespread or industry-wide application affecting a substantial portion of the membership”. thus, etc....

  • In 2020 alone, Netflix spent over $17 BILLION on content.

  • Members were told after the fact that the contract reflected great gains – but does it? What do your residual checks say?

“Residual-Killers”:

  • Countless amounts have been lost in made-for-cable residuals, Home- Video/DVD, and “New” Streaming Media (Amazon, Netflix, Hulu, HBOMAX, etc.).

  • Broadcast syndication residuals were all but given away in our last negotiation. 35,000 members will see a 90% reduction in their syndication residual resulting in a $70,000,000 loss over the next three years.

  • Most basic contract agreements – and even negotiated salaries – allow companies to pre-pay residuals (which is effectively a buy-out) as part of initial compensation. The performer may not even know that their deal includes NO future compensation. They may also be paying commissions to their representatives based on that additional amount.

  • Changes in viewing patterns demanded that we increase the residual formulas for all New Media.

  • But, in 2020, negotiated increases in Streaming Video On Demand (SVOD) residuals only counted towards newly licensed, brand new shows - NOT new episodes of existing shows. Your residuals on these shows will be forever calculated and based on exceptionally low and poorly bargained rates.

  • The concept that only new shows, not new episodes of existing shows, get newly bargained increases has never happened before in our union’s history and must never happen again in future contracts.

  • Untold monies have been lost due to this erosion and the loss of income makes it harder to qualify for our SAG-AFTRA health insurance or to earn pension credits. It is imperative that ALL residuals for future exhibition of our work compensates us fairly; wherever, or however, that work is viewed.

WHAT IS OUR SOLUTION?
MembershipFirst believes in strong, forward-looking negotiations that protect residuals. Our union has dramatically underestimated the growth of streaming platforms and the true value of our work within them. We have under-negotiated our rightful share and fair participation in our contract negotiations. We MUST look at Streaming as the new standard and negotiate contracts accordingly:

  • MembershipFirst is determined to end “pre-paid residual” (Buy-Out) contracts that hide future potential earnings in the members’ original fee. Many members are unaware of this practice and may even be incorrectly paying commissions to their representatives.

  • Streaming residual calculations are outdated and insufficient. It’s time for our union to demand that residuals calculations reflect the extraordinary value of our work and ensures that we participate in the financial life of our projects, in perpetuity.

  • MembershipFirst guarantees all major contracts will be negotiated with direct member negotiating committee involvement and with a confirmation vote.

  • MembershipFirst will not allow the continued degradation of our residuals which starves your wallet as well as our pension and health plans.