On April 6, the Joint Policy Committee (ANA/4As) and SAG-AFTRA announced a tentative agreement for the 2013 TV & Radio Commercials Contracts.
The deal is scheduled to be reviewed by the SAG-AFTRA Board of Directors on April 20-21. Once approved, the agreement will then be sent to SAG-AFTRA membership for ratification, after which the new rate charts will be published.
So how will these new contracts impact advertisers and ad agencies?
All new commercial sessions that started on or after April 1, 2013 will be subject to the new rates, as will “new” commercials that are edited from existing footage. Payments made now for these commercials will need to be supplemented to new rates, once those are approved.
Here are some tips on what to consider while the final rates are undergoing approval:
• Rate changes could take effect in two ways. First, there will likely be an across-the-board increase in all scale wage rates, plus an increase in Pension & Health contributions. Second, there may also be changes to the formulae used to calculate a particular residual type. That will have a compounding effect on the increase, and will be important to consider when determining residual budgets.
• If you’re negotiating a new 21-month maximum use period for a commercial, it may be best to wait for the finalized rates before agreeing to new terms with agents. Typically, agents ask for the “new” wage scales, along with an additional percentage, so you’ll want to calculate just how much of an increase that amounts to.
• Any Term or Celebrity Contracts that have an effective start date of April 1, 2013 or later will likely be affected by an increase in the Pension & Health contribution rate.
The Extreme Reach Business Affairs team is here to help you navigate these changes. If you have any questions on the new deal between SAG-AFTRA and the JPC, feel free to contact us!
Jo Ann Kessler is the VP/Director of Business Affairs at Extreme Reach.