SAG-AFTRA’s union members recently ratified a new 2016 commercials contract (the “Contract”) that applies retroactively as of April 1, 2016, and is effective through March 31, 2019. The union released the proposed Contract last month after concluding negotiations with the Joint Policy Committee of the Association of National Advertisers (JPC) and the American Association of Advertising Agencies (AAAA).

The 2016 Contract includes several new provisions of note:

  • New waiver for “Non Professional Testimonial Commercials”: An advertiser may film or record individuals who are providing testimonial endorsements for a product, service, or advertiser without covering such persons under the Contract if a number of requirements are met. In particular, the individual’s testimonial must describe his/her experiences and/or opinions of the product, service or advertiser (not just “testing” of the product); those experiences must be typical and independently verifiable; and the commercial must generally comply with the FTC’s Guides Concerning Use of Endorsements and Testimonials in Advertising. Featured individuals cannot deliver the advertiser’s slogans or taglines. When casting for such individuals, advertisers must make clear that they are seeking “non-professionals” (i.e., not “real people”) and cannot use people “widely known to the public at large” or “celebrities” (e.g., online influencers). Participants also cannot have appeared in a commercial, TV, or movie previously. Family members and others with a relationship to the selected endorser (e.g., a husband, wife, child, or treating physician) may be included in this waiver. However, anyone hired by an advertiser to play a role or participate would not be considered “non-professionals” and would be covered by the advertiser’s other SAG obligations. Advertisers that apply the waiver must notify SAG and provide (a) a signed standard declaration from each person, and (b) an electronic or physical copy of the commercial(s) within 60 days of first exhibition. This waiver will sunset when the Contract terminates in 2019.

    Other waivers, including those for “Live Events,” “Man on the Street,” and “Hidden Camera” commercials remain in effect as part of the Contract and may be applied to commercials made for use in New Media.
  • New “Experimental Social Media Waiver”: For New Media commercials produced for use on social media platforms (including, but not limited to Facebook, Instagram, Vine, SnapChat, Tumblr, Twitter, and LinkedIn) (but which does not include YouTube), advertisers may film and record multiple commercials for the same product, service, or advertiser in a single session for a single session fee that may not be credited. Usage fees are also reduced (only 15% of a session fee for each 30-day cycle), but limited to a one-year maximum period of use. Each edit is also a new spot, and no exclusivity may be obtained from principal performers. This waiver will also sunset when the Contract terminates in 2019.
  • Simultaneous Streaming: During any cycle where broadcast use has been paid, a commercial may also be streamed online or in New Media simultaneously for no additional payment. This term also sunsets in 2019.
  • Retail Offers and Promotions: A spot may be edited to reflect special offers and promotions, sales, or giveaways, sweepstakes, or sales events, and all versions will be treated as one spot for use purposes. On- and off-camera performers providing services to make each change must be paid additional separate session fees per change. By implication, though, other talent not involved in such changes do not have to be paid for new versions. Each version may only include one reference to the special offer or promotion (as a “tag”) and may air for no more than two weeks.Multiple variations may also air in the same market.
  • Pension and Health Payment Increase: P&H payments have increasedby 1.2% and are now calculated as 18% of gross compensation paid to principal performers. The new Contract includes additional increases to wages and usage fees and new session rates.

TIP: Now that the Contract has been ratified, its terms apply to all commercials produced after April 1, 2016, and all new or additional versions produced under the Contract after that date due to revisions or editing. Signatories that have elected until now to pay at 2013 rates have 30 days to make retroactive payment to adjust to 2016 rates. The new Contract includes several new waivers and other provisions of note that signatories should review carefully for their applicability to any planned union-covered content.