The 2022 SAG-AFTRA Commercials Contract and Audio Commercials Contract will expire on March 31, 2025. The advertisers’ (business) joint negotiating team is warning its members to get all productions wrapped up before the March 31st deadline or brave the consequences. The payment terms on existing or future contracts should address extending the time of authorized use of the commercials made, and extending the payment terms of these contracts (if appropriate).
This is not the same as the 2023 strike that immediately comes to mind. The threat of a strike by the “talent” this time is the advertising talent and it is not merely hypothetical since many of the same issues are present as were found in the 2023 strike. Advertising has a very short “period of use” when measured against other content.1 The demand to refresh the advertising content is a large incentive for the industry to reach an agreement. The large inventory of talent for advertisements and the relatively low barriers to entry are theoretical inducements to an early agreement.
In the 2023 strike, the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) the result was a massive loss time and content for theaters and streaming services effecting the entire “content” industry represented by the Alliance of Motion Picture
and Television Producers (AMPTP) – which represents Walt Disney, Netflix and other media companies. The strikes by SAG-AFTRA (Film & TV)(118 days) and the Writers Guild of America (148 days) downed tools for most of 2023.2 The reasons for the 2023 strike have not been “resolved” in all portions of the industry. The popularity of streaming platforms has led to a shift in the entertainment industry, with writers and actors not seeing the same increase in pay. Writers and actors are concerned about dwindling compensation, especially residuals, which are payments made when a show becomes a hit. Writers are concerned that studios will use AI to create the first draft of scripts, leaving them to only polish and edit the work. They also demanded safeguards to protect their jobs from AI. Streaming services have shorter seasons than broadcast shows, which means writers get paid less per job. Actors were fighting for better working conditions including writers demanding mandatory staffing of TV writing rooms.3
The warning to advertisers dated December 17, 2024 came from the Joint Policy Committee, LLC, which represents advertisers and advertising agencies who have authorized the Committee to collectively bargain on behalf of advertisers with SAG-AFTRA and the American Federation of Musicians, on the collective bargaining agreements that govern the use of performers and musicians in commercials. The warning included additional recommendations to advertisers for terms & conditions desirable in future contracts for advertisement such as include in new or negotiated contracts that during a strike (i) the performer may not withdraw consent to use a commercial,4 (ii) the Maximum Period of Use clock will be suspended, (iii) installment payments of residuals due to the performer are suspended,5 and (iv) negotiate immediately the use of commercials in which the Period of Use will expire as of the strike date.
Ready yourself or your client for the likelihood of a strike by the “talent” performing in the advertisements which the advertiser has either already 
contracted for or is planning to contract for in the near future. The strike may prevent completion of the advertisement production or interfere with the broadcast of completed advertisements. Expect this strike to address many of the same issues raised in the 2023 SAG-AFTRA & Writers Guild of America strike. The outcome may well be different based upon the advertising “talent” having a weaker bargaining position.
References
1 The maximum period of use (MPU) is the amount of time a commercial can be used, and it can vary depending on the type of contract and the content being used. The MPU for a SAG- AFTRA commercial is 21 months, starting from the earliest of the commercial’s first use or 13 weeks after the last production day. More than one commercial may be filmed in a single “session” and a performer may be “cut” (outgraded) and no longer earn any fees from the commercial (residuals).
2 Previously, the Writers Guild of America 2007 thru 2008 (99 days), and Commercial Actors in 2000 (182 days).
3 The deal will bring immediate 11% wage increases for background actors, as well as immediate 7% wage increases for others, SAG leaders said last month. The studios cannot create a digital replica of an actor without first obtaining their consent, and actors will receive payment based on the type of work the digital replica performs on-screen. The contract provides protections for background performers so that their digital replicas cannot be used without consent; a new $40 million fund to pay performers for future viewings of their work on streaming platforms; institutes a requirement for intimacy coordinators for scenes involving nudity or sex; and includes terms to “ensure that sets have proper hair and makeup for all performers” (Black actors and other actors of color have long reported racist practices in Hollywood hair and makeup departments, including being told that productions “didn’t have the budget” to style their type of hair).
4 The talent will include the principal actor (“talent”) and the extras. The Contract provides that extra performers or background actors that are non-identifiable within frames. This category includes body doubles, stand-ins, and hand models.
5 Under the SAG-AFTRA Commercials Contract, residuals are compensated to principal actors in addition to their daily wages.
Regina Mundi Global Advisors 