While the controversy over the merger of two of Hollywood’s most powerful talent unions has mostly focused on benefits, another underlying drama centers on getting union actors in new media.

Internet production continues increasing, but many online-only video projects don’t have budgets big enough to trigger the unions’ terms, while others simply make side deals with union workers.

But a combination of the Screen Actors Guild and the American Federation of Radio and Television Artists may give actors and other broadcast workers more clout in bargaining with new-media companies for pay and benefits on the digital frontier, especially for lower-budget productions.

“It’s in the middle tier and lower tiers of this work where the real battle is going to be fought,” said Ned Vaughn, first national vice president at SAG. “They would love to do it nonunion and save money.”

The proposed union merger will be decided Friday after a monthlong membership voting period that has been rife with heated debate. The deal, which requires 60 percent approval from each side, would combine SAG’s 120,000 members with AFTRA’s 70,000, grouping film actors with TV and radio broadcast talent.

Under current SAG agreements, no set minimum pay is in place for acting jobs in online videos; rather, the union advises members on their negotiations with web producers.

SAG claims jurisdiction for timely pay and other workplace terms for videos that cost at least $15,000 per minute, $300,000 per episode or $500,000 per series to produce – all relatively high amounts for web productions. If a SAG member with previous credits is hired for a smaller-budget production, it also falls within the union’s jurisdiction. Vaughn said he hopes the merged union can establish minimum payment for all new-media productions regardless of budget.

The unions’ boards, which first proposed the merger, are mostly touting greater bargaining power against the seven major media conglomerates, which include Burbank-based Walt Disney Co. and New York’s News Corp., the parent company of Fox Broadcasting Co. Those companies, which are members of the Alliance of Motion Picture and Television Producers and have agreements with the actors unions for base pay, hire actors for much of the filmed entertainment seen on TV and in movie theaters.

But Vaughn said getting the deal done now is crucial as more Internet companies that aren’t AMPTP members enter Hollywood to finance and distribute content, notably Mountain View-based Google Inc., which has invested in original programming for YouTube and Netflix Inc. Those companies aren’t obliged to use union talent and can pay whatever wages the market bears.

Vaughn’s hoping a merged union will be able to negotiate deals with new-media companies for professional actors’ wages. The idea is that a single union representing a larger portion of performers will have greater leverage to make sure producers sign union contracts to access the talent.

But getting web video startups to pay union scale may be challenging, as the new companies are struggling to turn a profit.

No producers would go on the record, but some said privately that it’s easy to make side deals with union actors and hire aspiring actors who will work for minimum wage.

“Those channels will have to make decisions as to whether they are union compliant,” said Jason Nadler, co-founder of digital production and management company Serious Business in Santa Monica. “So many of these channels have been created by people who have emerged outside of the traditional business.”

Internet organizing

AFTRA Los Angeles President Gabrielle Carteris said the other reason for the merger stems from a problem faced by actors working under both SAG and AFTRA contracts. About 45,000 people are members of both unions, but some don’t qualify for health and retirement benefits from either due to split earnings.

Carteris said digital acting gigs, which often pay far less than traditional media, are only further fragmenting actors’ incomes, making the need to merge more urgent. The idea is that if actors can report their total earnings to one union, they can qualify for benefits more easily.

“Our industry is so different than what it was; it was radio and film and there was a real delineation,” she said. “With the onset of technology, we have digital performers. With all the work out there, they’re dividing it between two unions and aren’t making enough for health and retirement.”

AFTRA began negotiating new-media deals for its members in 2008 and SAG joined in 2009. The deals include residual payments for online reruns, though Vaughn said the terms were admittedly modest and intended mainly to gain a foothold for future leverage.

Meanwhile, SAG has been trying to convince new-media producers to sign union contracts by holding informational meetings.

There has been some progress for the unions. At the 2010 online video awards show, the “Streamys,” 30 of the 94 nominated shows had hired actors with either SAG or AFTRA contracts, according to Tubefilter, an L.A. company that co-produced the event.

Among the examples of YouTube shows covered by unions are “Bite Me,” the latest offering by Machinima, a gamer focued production company in Hollywood.

Still, much of the online video that could be described as professional quality costs only $5,000 per minute to produce, leaving union coverage at the whim of the producer.

But as production values rise and startups scale up their ambitions on YouTube and elsewhere, Drew Baldwin, co-founder of Tubefilter, thinks the trend is moving in the unions’ favor.

“Many of these producers are trying to establish legitimacy,” he said. “Being associated with a (union) justifies access to a whole pool of talent.”

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