The 2023 SAG-AFTRA strike, spanning 118 days, marked a significant period of negotiation and conflict and highlighted the importance of the evolving digital entertainment landscape and the use of new technologies in work settings. 

On December 5, 2023, members of the Screen Actors Guild-American Federation of Television and Radio Artists (“SAG-AFTRA”) ratified a multiyear deal with the Alliance of Motion Picture and Television Producers, approving the three-year TV/Theatrical Agreement valued at approximately $1 billion and putting an end to the conflict that started in July 2023.  The deal includes controls over the use of artificial intelligence (“AI”), hair and makeup equity, increased compensation for background actors, enhanced streaming residuals, increased anti-sexual harassment provisions, and the creation of a new streaming success bonus pool.

The contract introduces a new provision for streaming bonuses that recognizes the substantial impact of streaming services on the entertainment industry.  Under the agreement, streaming platforms will contribute around $40 million annually to a bonus pool, a measure that not only incentivizes the production of high-quality streaming content but also allows actors to share in the success of these platforms.  The allocation of these bonuses is structured with 75 percent directed to actors in the most popular streaming shows, which  typically are those with higher viewership, significant cultural impact or critical acclaim, and the remaining 25 percent distributed among actors in other streaming productions.

The inclusion of streaming bonuses in the contract represents a significant departure from the previous compensation structure.  Traditionally, actor compensation in television and film has been based on fixed rates and residual structures tied to broadcast and DVD sales.  With the shift towards digital streaming as a primary mode of content distribution, the traditional compensation models became less reflective of the industry’s revenue streams.

The contract also includes a structured increase in minimum salaries for actors.  The minimums will increase by 7 percent effective November 9, 2023, followed by another 4 percent increase effective July 1, 2024, and a further 3.5 percent increase effective July 1, 2025.

Recognizing the inevitable integration of artificial intelligence into contemporary filmmaking, the contract introduces pragmatic guidelines that balance the interests of both producers and actors.  Under the terms of the agreement, studios must obtain explicit consent from actors before using their images to create digital replicas, a step that respects actor rights while enabling studios to explore innovative AI technologies.  This requirement extends to background performers, ensuring comprehensive protection against the unauthorized use of digital likenesses.  Additionally, producers must inform the union about plans to use generative AI to create synthetic performers.  This provision balances the interests of actors with the needs of studios for creative and technological flexibility, offering a framework for collaboration and negotiation between the studios and the union in this rapidly evolving digital landscape.

Including AI provisions in the contract serves as an important reminder to employers in all industries to stay updated with technological advancements and incorporate relevant AI and other technology use policies into their handbooks and employment agreements.

*Ari Wininger is a Law Clerk. A Law Clerk is not licensed to practice law and is supervised by Vedder Price P.C. attorneys licensed and in good standing.