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SAG vs. Fi-Core:
The War Over Independents
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The following is an editorial and is therefore, by definition, an opinion piece. Although it is the result of months of research and corroboration, it is still subject to my interpretation. While I believe my interpretations have merit (and I have provided links to information I can list without violating anyone's privacy), it will be up to you to decide for yourself if you agree or disagree with my thoughts. It is not my intent to slander any individual or impugn anyone's motives who may be associated with the organizations that I will discuss in this editorial.

Unlike most editorials at MFM, the following editorial is not only aimed at filmmakers, but it is also aimed at actors who would like the option of working in more films, by showing that there are more options than those that are regularly publicized. It's my hope that this editorial will be useful both to MFM's regular readers and actors like the one I sat down with at the beginning of all of this. (If you know someone who might find this beneficial, you can easily pass it along to them with our "Share" button.)

If you were to ask most filmmakers if Hollywood actors are interested in being in Independent films (truly independent ones, as opposed to the boutique studios known as Mini-Majors), you would likely find most who would say, "No." Why? Well, because none of us see Hollywood actors in truly Independent films. Okay. Why is that? Well, maybe it's because truly Independent films can't afford the salaries they want. That's certainly possible. But is it the truth? Or is there actually a reason that most Hollywood actors CAN'T be in most Independent films? Obviously, for the Nicholas Cage's and Angelina Jolie's and Johnny Depp's of the world, money couuld be a huge issue, as might the need for truly mind-blowing scripts that are harder to come by. However, what about the lesser known Hollywood actors? Well, the secrets to these questions and more might surprise and shock you. I know they did me. And, as so often happens with eye opening revelations, it all started out with a simple cup of coffee with a friend of mine!

A couple months ago, my friend June, a talented young actress planning to relocate to LA, told me that she was in the process of getting into AFTRA (the American Federation of Radio & Television Artists) so that she could join SAG, get an agent, and finally get her career "on the right career track." [Note: While AFTRA is currently a "sister" organization with SAG, it has different bylaws and its overall reputation is likewise different.] Since we were talking about June being in a film I'm working on after she'd been there awhile, she was interested to know if I'd be willing to make it a SAG film if she got in. I told her that shouldn't be a problem--since I'd heard in passing about SAGIndie, a division of SAG designed to deal with Indie films--but I'd have to check more into it.

I then spent the next few weeks really learning about what SAG's rules stated, how their contracts worked, and how actors under their purview fared. To say that I was startled by what I learned is perhaps the understatement of the year. However, to fully understand what I learned about how things work now, we need to go back to when and where SAG was started.

In 1933, Kenneth Thomson and Ralph Morgan helped form the Screen Actors Guild under subterfuge, hiding from the prying eyss of the studio heads in a small one room office in Hollywood with a rented typewriter and no desk. The reason for the Guild's necessity? Actors had few rights in a studio systems that ran like a Chinese sweat shop, rather than creative machines. Of the pre-SAG times, former SAG National Executive Director described it thus:

"Imagine working on a film with unrestricted hours, no enforced turn-around and no required meal breaks. Imagine working under a seven-year contract that you cannot break and more than likely will be forced to renew, for a producer who can tell you who you can marry, what your morals must be, even what political opinions to hold.

This was Hollywood for actors in 1933 under the studio system. Rebel against the studio and you were in for a hard time, better to quit while you're ahead. Fortunately, a group of actors risked their careers to start the Screen Actors Guild. Studio boss Irving Thalberg swore he would die before accepting the Guild. In 1936, Thalberg died and in 1937, the studios accepted defeat and signed a contract with the Guild that, for the first time in Hollywood, gave actors a sense of empowerment."

While he blithely overlooks some studios who were so communal as to be considered families by their employees (such as 1920's-1930's MGM, where studio owners would have once a week "town-square-type" meetings with EVERYONE in the company, from the top-billed actors and producers to the janitors), there is no doubt that the studio system was a very rough place for actors in pre-SAG Hollywood.

Unfortunately, despite the best intentions of the founders and the need for actors to have rights against big studios, SAG's defeat of the studios yielded a new Goliath that quickly became far more powerful than the old one. (Currently SAG is one of THE most powerful Unions.) Because of this, the plight of an actor in the SAG-controlled world of modern Hollywood could be described like this:

"Imagine being told that, in order to find an agent, to find work, or to have any opportunities in your field, you would be forced to join a Union that has a $2500 initiation fee (with minimum dues of $116 every year plus a percentage of whatever you make), which has a constitution that requiring you to dissolve any pre-existing contracts you might have signed for any other films and never to work for any truly Independent films in the future, despite the fact that the average annual wage this union's members commanded is reported to be less than $10,000.

Further, imagine being forced to compete against thousands and thousands of other starving artists on a constant basis, because there simply aren't enough approved roles to go around, and being told time and again that you don't have enough experience to get a better role, so you can finally get your "big break." And, should you ever look into any way around these rules,so that you can get more experience, you will either be fined (if you do it illegally, since you will be in violation of SAG's Global Rule #1) or intimidated (if you do it legally) by the union that claimed to support you."

Does this sound chilling to you? It should. Not just because it's shocking that this sort of behavior is accepted in this country (and even lauded by the media) and not just because it's perpetrated by a group that claims to have the welfare of its members at heart, but because it has major ramifications for Independent filmmakers everywhere.

You see, SAG has a special perspective when it comes to Independents. While it's never blatantly stated anywhere on their site (in fact, SAG even went to the trouble of creating the aforementioned SAGIndie site to show that they're "fans" of Independent filmmakers), the reality is etched in-between the lines of every contract SAG has, especially the ones that are "supposedly" for Independent filmmakers. Their perspective is this: "The world would be a better and simpler place if you Independent filmmakers would just go away."

Now, as we mentioned before, the Screen Actors Guild was started to help empower actors when dealing with major studio corporations, so they wouldn't be taken advantage of. Its monetary requirements and all the benefits its members are permitted when dealing with studios are pretty logical and understandable. However, they are not equipped in any way, shape, or form to deal with truly Independent filmmakers. (As I mentioned before, we're not talking the Mini-Majors or any of the boutique studios owned by bigger studios. We're talking about actual Independent filmmakers who have no connection to the studios.)

On a purely logical level, there's no need for SAG to be involved in any way with truly Independent filmmakers, because the actors are easily as powerful (if not more powerful) than the film production companies in question (especially on the microbudget level). Since Indies aren't able to pay the studio-based requirements SAG wants and since there aren't enough SAG jobs to go around, the most reasonable choice on SAG's part, in my opinion, would certainly have been to say: "We are a union that oversees studio films. If our actors choose to get involved with Independent films, they can do so at their own risk." (Just think of the number of hotel/motel pools you've been at that had no lifeguard and have a sign that essentially says the same thing for your choice to swim.)

However, this is not the path SAG elected to take.

Instead, they decided that none of their actors would be permitted to be in any films that were non-SAG films and, if they chose to do so, they would be fined and penalized. Ahhhh. So now we answer the question we broached originally: "Is there actually a reason that most Hollywood [ie SAG] actors CAN'T be in most Independent films?" Definitely.

So how exactly do you become a SAG film? For an Independent filmmaker to become a SAG "signatory" production, you must sign one (or multiple) SAG contracts in order to do so. This is where it becomes devious on SAG's part.

Because the publicity would be awful if it became well known that they actively wanted to prevent SAG actors from working in Independent films, they created in 2005 with a series of pseudo-Indie modifications to the traditional SAG agreements. Unfortunately, these agreements don't make a lot of sense for Independent filmmakers. (While I have read about a few filmmakers who've used these contracts successfully, I have yet to meet one personally. In the time of running this magazine, only one Independent filmmaker who's submitted a film has successfully dealt with SAG to do so, and that was still very costly.)

The number one deal breaker for most Independent films is the core Studio-inspired expectation of all of these special contracts that any SAG film is one that is destined for Theatrical distribution in non-arthouse theaters. Any that are not, are asking for problems.

Do be more specific, all of the Indie contracts (Ultra-Low Budget [>$200K], Modified Low-budget [>$626K], and Low-Budget[>$2.5M]) exclude DVD release and, while the Ultra-Low Budget agreement advertises "no Step-Up fees" (the requirement for you to pay additional back payments to actors should you change your distribution model), its wording is extremely vague on what things you can do with your film if you don't sign a major theatrical distribution deal and sell it to a major studio. It's currently worded in such a way as to allow SAG to decide what ways it will deem appropriate for you to distribute your film if you can't get theatrical release on it and, if it decides you're still not allowed to release it on DVD or the internet after your film is completed because you were unable to achieve theatrical release, your film is now locked in limbo. (Like a weird Japanese game show, the grand prize for this major gamble with your film is that you will actually be able to release your film in a manner that you have access to. If not, the audience chants, "Noooo WInnner! Soooo Sad!" Bettter luck with your next film.)

To ensure SAG's final control, all agreements have some variation of the following minimum* proviso:

Security Interest in Picture
The Guild, at its sole discretion, may require producer to execute documents necessary to grant the Guild a first position Security Interest in the Picture and related rights to protect professional performers and the Guild against any default in the performance of obligations under this Agreement. Producer shall provide the Guild with all chain of title documents relating to the Picture.

So what does a "security interest" mean? Essentially it is a chain of custody that determines who gets paid first when money comes in (as in, if you have an investor, SAG gets paid before your investor!), with the the highest security having the greatest amount of right to seizure. Right to seizure?

Yes. Seizure.

"Security Interest" is the official term for what the bank has when you get an auto or home loan on your new car or building. (They call it a "lien" and you have to buy comprehensive car insurance until it goes away.) When you pay off your auto or home, they remove the lien and you own the product free and clear. Fail to pay the bank what you owe them, and they send a repo guy to take it back.

But wait, I didn't borrow any money from SAG!

No, but, you see, SAG considers all future payments that you will owe for the film and for the actors you used to be a type of "debt." A debt you can never repay because it accrues with every sale of your film. (In most forms of back end paymetns, we call these types of dvidends: "royalties," although they're certainly not seen as any form of pre-existing debt by most people.)

If you don't have a Hollywood style distribution deal and are permitted by SAG to distribute your movie in another way, you might end up distributing your film through ways that don't get you the necessary return on investment to pay SAG all that they want and still make some money yourself. This means that you might have to sell off your film for little or no profit to any distributor that will pick up the "lien" on your film, just to get SAG off your back, or risk being "upside-down" (to use a mortgage term) in your debt to SAG, at which point they are legally within their rights to simply seize your film and do whatever they want with it.

Wow. Hard to believe this is the same group that was trying to make the world a better place in the 30's!

While some filmmakers might just decide that this proves that they should just continue to avoid any union actors like the plague, there is actually a solution to the dilemma that could yield a lot of good for both actors and filmmakers--opening doors that haven't existed before.

In 1963, the Supreme Court ruling of NLRB v. General Motors addressed the issue of overly-powerful unions in industries that required union membership.

You see, contrary to popular opinions, unions and the business leaders like to forge a variety of simple agreements and requirements that grease wheels on both sides. The most notable way this comes in to play was provided for through 1935's National Labor Relations Act, which allows an employer and union to pre-agree upon a "Union Security Clause." A USC basically means that the employer agrees to only hire Union workers, thus forcing anyone who wants employment to join a union. Most studios have these in effect. (There are rumors that Disney and Nickelodeon no longer do, but I was unable to corroborate this.)

The main terms of the 1963 ruling essentially stated that if a person joins a union so that he can work, he has the right to limit his involvement to the "financial core" requirements. Essentially, this means that the person will pay union dues for the Financial Core costs that his existence within the union will cost the union (minus union causes) and have the right to work due to this, but he will not agree to the specific rules or policies that the union sets up. As such, they are regarded as "Fee-Paying Non-Members" and are not given an actual SAG card. However, they can audition for any acting jobs they want, both Union and non-Union. On Union films, they have the same Union rights as any other Union member and, on non-Union films, they work at their own risk. Unlike SAG members who "sneak" work on Indie films, these people are not doing anything wrong or illegal. Obviously, if the Union is able to wield its power due to an army of actors that all do what it tells them to, the notion of having people choosing the Financial Core publicly is terrifying for them. If more actors chose to do this, their power would begin to erode.

As Lord Acton said in 1888, "Power tends to corrupt, and absolute power corrupts absolutely." Power is one of the things that it would seem that SAG doesn't ever want to risk losing, so SAG inductees were somehow "not informed" of heir Financial Core rights. Finally, on February 17, 2001, President George W. Bush signed an executive order that unions are required to inform all prospective members of their "financial core rights."

Forced now to publicly tell members about Fi-Core, SAG created a website that showcased how bad an idea Fi-Core was to its members and inferred that this choice was permanent. (In truth, the Fi-Core member can rejoin SAG at any time, although they will have to pay a special re-instatement fee which is based on the amount of time they've been Fi-Core.) On the flip side, to try to make it seem even more necessary to have a the status symbol of a SAG card (and to gloss over the low annual salary most SAG actors "enjoy"), the wording on SAG's member page states, "every SAG card issued symbolizes success." (Additionally, rumors have been spread methodically by unknown sources that casting agents won't accept actors who aren't SAG. So prolific are these, that my friend June really thought they were true, despite the fact that the majority of agents have no agreement with SAG and actually prefer Fi-Core members, since there are fewer jobs they are excluded from!)

As the war to keep actors confused and towing the line waged on, things took a surprising and dark twist when Jon Voigt entered the scene. The Oscar winner had been a stand up guy as far as the union was concerned for all of his professional career and was a very famous success story. (Besides all of his personal accomplishment's as an actor, he's also Angelina Jolie's father.) That was until one microfilmmaker got to Voigt and upset the applecart!

In a letter from Voigt (which was published in Daily Variety on January 25, 2005), he recounted how a life long friend had approached him in 2003 about a micro-budget script he wanted to direct. In Voigt's own words this is what happened:

"When I read the script, I was so moved! It was original, it was spiritual, and I felt it would be important, and an answer to many of our personal sufferings. It wasn't too long before other people felt the same as I did, and supplied just enough minimal funds so my friend could begin work on his project.

I knew by law I could participate in the project without violating the Guild's rule against non-union work by electing "financial core" status. I called the Guild to request that status. My request was met with fear and panic from the SAG officer in charge of "financial core." "Jon, you must not do this," she said. "You will open the door to all our actors running for financial core." I thought to myself, "What's so bad about that? There could be multiple reasons, financial and otherwise, why many creative people might want to do a non-union movie under the protection of 'financial core.' 'Core' membership is an entitlement of any union member, protected by federal law." I needed a few days to think about this.

Before I had arrived at a solution, all hell broke loose! Suddenly, there was what can only be described as a brutal attack on the small production, not only by SAG, but other unions as well. They came down hard. It was vicious and ugly. I thought I was living a part in the film, On the Waterfront.

Our Guild exacerbated the assault with the false announcement to the press that I was the film's producer. My peers, who were rushed off to join the angry mob on picket lines, had no idea that I was not the producer, and that I had not worked one day as an actor on the film, but the false information they were led to believe was immediately released to the press.

The unions' scare tactics worked. The crew was frightened to continue, and a small filmmaker's creative endeavor was shut down after 2 1/2 weeks of work, leaving great financial losses.

The ugliness did not end. The attacks on me and the production continued on with vicious taunts and lies spread over the internet. It went on for months, leaving in its wake extreme stress and mental anguish for all involved. If this could happen to me, a veteran actor of 40 years and an Academy Award Winner, I shuddered to think what would be in store for other actors. I wouldn't want this to happen to anyone ever again."

The "bullying," as Voigt described it, had the opposite effect on getting him to back down. Like a character from one of his movies, he chose to become Fi-Core, both to try to help his friend pick up the pieces, and to be a public figure to other actors.

In Voigt's concluding comments he went on to discuss further backlash from SAG:

'The SAG board chose to bring me once again what they think is shame, and apparently to warn other actors off joining financial core, by announcing to the press that I was not invited to the ceremony to which my fellow actors nominated me for a union film. All this is because of my willingness to uphold the right to our personal pursuit of freedom and liberty. I am neither sorry nor ashamed for my decision to join "financial core." '

So, how can this all change, if SAG is so powerful? Well, simply put, Voigt's concerns have not fallen on deaf ears if enough actors will choose to publicly take up the Fi-Core mantle, citing SAG's unacceptable policies toward Independent projects as a main reason. The fear and secrecy has made single actors a target. But if enough will publicize it, the SAG finds itself in a situation where the majority of its members are becoming even more aware of the rights they should have. The rights its original founders believed in. (Many of the actors who were involved with SAG's founding were also involved in the avant-garde film movement, which, up until the mid-40's, behaved much like the micro-budget film movement of today. If SAG's rules had been so comprehensive then, these founding members would've been violating their own rules to do that which they loved!)

And, as you can imagine here at MFM, we will conclude with a reminder of what truly Independent filmmakers everywhere can do to encourage actors to take the plunge and risk the stigma by actively seek Financial Core actors in all the casting calls you do. Currently, many people will do "Non-Union" on their audition calls, but few will mention Financial Core members by name. There is power in names. Use a charged name like this will get more discussion going. The more people are talking, the more likely they are to stumble on facts and to get past rhetoric and fear.

As I finish what may be the longest editorial in MFM's history, I'd like to leave you with a few words from a completely different founder who knew something about the concept of standing up for one's convictions:

All tyranny needs to gain a foothold is for people of good conscience to remain silent.

-Thomas Jefferson

Jeremy Hanke
Microfilmmaker Magazine

JeremyHankePicture The director of two feature length films and half a dozen short films, Jeremy Hanke founded Microfilmmaker Magazine to help all no-budget filmmakers make better films. His first book on low-budget special effects techniques, GreenScreen Made Easy, (which he co-wrote with Michele Yamazaki) was released by MWP to very favorable reviews. He's curently working on the sci-fi film franchise, World of Depleted through Depleted: Day 419 and the feature film, Depleted.

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