How SAG-AFTRA and AMPTP Talks Broke Down After Calls to CEOs, a Strike Delay Demand and Rebuffed Offers

There was a large crowd in the room when SAG-AFTRA and Hollywoods major studios and streamers formally began contract bargaining negotiations on June 7.

About 80 participants from both the labor and management sides gathered at the Sherman Oaks headquarters of the Alliance of Motion Picture and Television Producers for the first day of what everyone knew would be a difficult negotiation for the performers union, which has been on strike since July 13.

One big presence in the negotiations process who was not there in person on Day One was Fran Drescher, president of SAG-AFTRA. But Drescher had no trouble making herself heard that day. She addressed the gathering via video conference call from Paris, where she was attending a family wedding. But she had no trouble getting managements attention.

Drescher gave something of a 10 to 15 minute opening statement to the room that set off alarm bells on the management side. The veteran actor and entrepreneur spoke with passion and her trademark pointed humor as she detailed the struggles of SAG-AFTRA members to make a living amid the industrys historic transition from linear TV to streaming.

Drescher was adamant that streaming had changed the business model so much that the contract would have to be rewritten top-to-bottom. For negotiators who are used to making minor adjustments to language that has accreted over decades, it was a shock. There were snickers about being scolded by the actor who became famous as the star of the 1990s CBS sitcom The Nanny.

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From June 7 on, the negotiations with SAG-AFTRA and AMPTP moved ahead in fits and starts until the heated moment when everything broke down around midnight on July 12.

From the management side, there was grumbling that SAG-AFTRA spent too much time in the early days offering presentatations and testimonials from union members about the various job categories covered by SAG-AFTRA, from extras and background actors to dancers. Justine Bateman, a multihyphenate who is vocal on labor issues, made a presentation to the room about AI. Tom Cruise addressed the group via video conference to lobby the room on behalf of stunt performers.

There was also frustration that SAG-AFTRA presented the studio negotiators a long list of demands without much prioritization in the early going. The brewing battle over streaming residuals was self-evident, but other issues came as a surprise, such as the demand for a 14% hike in most minimums in year one in the contract. That number was whittled to 11% by the time talks broke down.

After several days of presentations, AMPTP president Carol Lombardini asked SAG-AFTRA to move on to address the heart of the thorny financial and technological issues on the table. Lombardini is known for taking a stern tone in the room at times Thats not going to happen, she would say when certain demands were raised, such as the unions push for a cut of streaming subscription revenues to offset lower residual rates. At the same time, Lombardini is known for maintaining a lawyerly demeanor and for adhering to the rituals of contract bargaining.

The AMPTPs first written response to SAG-AFTRAs long list of demands was presented on June 17. SAG-AFTRAs counterproposal came six days later. Over the next three days, the sides exchanged several proposals and counterproposals focused on AI. On June 30, SAG-AFTRA leaders agreed, after considerable internal debate, to grant a 12-day contract extension to allow talks to continue. The AMPTP and the union exchanged two more counters, on AI and other issues, on July 1 and July 3. On July 6, a smaller group of representatives from both camps met in sidebar to talk AI. Between July 9 and 12, the sides swapped counterproposals two more times.

On the final marathon Wednesday of the talks, the sides met with two federal mediators who parachuted into the talks at the request of the AMPTP, with some prodding of SAG-AFTRA by industry insiders including CAAs Bryan Lourd and Endeavor CEO Ari Emanuel. After several hours of shuttling between the two camps private rooms, it became clear to the mediators that the sides were too far apart to reach a deal that night.

As the clock ticked down to midnight, SAG-AFTRA and AMPTP negotiators were together in the large conference room. Present at that late hour were Drescher, SAG-AFTRA national executive director Duncan Crabtree-Ireland and most of the negotiating committee, including Frances Fisher, Joely Fisher, Sean Astin, Samantha Mathis and Sheryl Lee Ralph. About 11:45 p.m., SAG-AFTRA told the AMPTP side that the unions national board would hold the final vote on a strike early the following moring. At this point, it was obvious that SAG-AFTRA was about to initiate its first industry-wide strike in more than 40 years.

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But Lombardini took a final shot. She told the group that management had more to offer SAG-AFTRA if both sides would commit to continue negotiations without the union going on strike. According to multiple sources who witnessed the exchange, Lombardini asked the union negotiators to hold the strike action to allow the talks to proceed without the added pressure of a strike and the anger and emotion that it would unleash. Lombardini at one point, with some exasperation, asked the union representatives to be civilized about the disruption across the industry that would be caused by a work stoppage.

Crabtree-Ireland and others were incensed, interpreting Lombardinis remark as her calling the SAG-AFTRA negotiators uncivilized. He and others were outraged at the suggestion that going on strike was somehow a low blow rather than federally protected legal right for organized labor. Time pressure and frayed nerves led some to raise their voices in the groups final moments together in Sherman Oaks. Lombardini, according to multiple witnesses, recognized her verbal gaffe seconds later and sought to clarify that she meant to express her hope that negotiations would continue in a civilized manner. But by then, the SAG-AFTRA team was heading for the exit.

In addition to the civilized vs. uncivilized debate, there are also conflicting views of which side made the first move to break off talks at a moment. Crabtree-Ireland told reporters on July 14 that SAG-AFTRA refused to delay its strike but was more than willing to continue negotiating with AMPTP. But that offer was rebuffed.

When you do something as a union like say Even though were going to have to go on strike, were ready and willing to remain at the bargaining table and see if we can reach a deal and all you hear back is Youre acting uncivilized by going on strike, that does tend to raise frustrations on both sides, Crabtree-Ireland said. Thats not how bargaining partners should deal with each other. He also said the remark betrayed the AMPTPs colonial attitude toward labor.

Union negotiators say they were told in no uncertain terms that the AMPTP would not continue talks if SAG-AFTRA went on strike. They told us they dont expect to come back to the table for quite a while, Crabtree-Ireland said.

This surge of tension came after the SAG-AFTRA team had already been upset by the AMPTPs move to surprise them with the federal mediators. That frustrated Drescher and Crabtree-Ireland so much that the two spent time earlier in the day reaching out to at least four top Hollywood executives by phone to deliver an unequivocal message about the unions resolve to fight for what it feels is a fair deal. Hastily arranged calls were held with Warner Bros. Discovery CEO David Zaslav, Netflix co-CEO Ted Sarandos, and Disney Entertainment co-chairs Dana Walden and Alan Bergman. Zaslav, Sarandos and Walden were reached while visiting the Sawtooth Mountains for Allen Co.s annual high-powered business moguls retreat in Sun Valley, Idaho.

The conversations have been described as brief and terse. The CEOs were no more receptive to the revenue-sharing proposal than Lombardini had been. If the goal was to achieve a breakthrough by going over Lombardinis head, it didnt work.

They were told no, and they heard it directly from the CEOs, said one insider.

Dreschers language at times felt disrespectful and accusatory, in the words of one participant. She raised some of the assertions that she voiced the following day at the epic news conference held at SAG-AFTRA headquarters.

Dreschers recent exhortations of shame on you and youre on the wrong side of history have raised hackles in the C-suites. Drescher told Variety last week that highly paid chief executives are like land barons of a medieval time. In the view of management, the heat of the unions rhetoric about the evils of corporate greed are creating another high hurdle to clear with rank-and-file members when there are already plenty of issues on the table.

Earlier this week, Drescher discussed the calls made to executives in her virtual conversation with Sen. Bernie Sanders (I-Vermont), which was livestreamed on July 18.

We said [to AMPTP negotiators], Well go over your head and call some of these CEOs and explain to them we are your partners, Drescher said. We are foundationally your business. And we need to get into that pocket because were being squeezed out economically of the other one. It was like talking to a wall.

Crabtree-Ireland also addressed the CEO calls in his remarks to reporters on July 14 as SAG-AFTRA began its first day of picketing.

It was us talking to them directly about what our key priorities were and the few issues that were holding us up from being able to make a deal, Crabtree-Ireland said.

The SAG-AFTRA leaders told executives that to reach a deal with the union, the AMPTP had to address the demand for a bigger share of streaming revenue, protections for actors on AI and a big hike in minimum salary levels to help the most vulnerable union members deal with the effects of inflation.

All they had to do was address those issues in some meaningful way for us to reach a deal, Crabtree-Ireland said. The message that came back to us was that they werent prepared to do that at that time.

On the night of July 12, after the dust-up with Lombardini, AMPTP negotiators heard cheers and applause coming from SAG-AFTRAs meeting room. As the union members started to leave the building, Drescher observed to her AMPTP counterparts, Now youve got two unions on strike.

Ralph, the veteran actor who has enjoyed a career resurgence with her Emmy-winning role on the ABC comedy Abbott Elementary, made a strong impression as she calmly left the studio side with a polite but determined statement.

I hope we can meet again under more pleasant circumstances, Ralph said.

Gene Maddaus contributed to this story.

(Pictured top: AMPTPs Carol Lombardini, SAG-AFTRAs Fran Drescher and Duncan Crabtree-Ireland)