Australia's SPAA Stands Firm in Offshore Flap

Australia’s SPAA Stands Firm in Offshore Flap

Claims the need to withdraw from offshore talent contract
was necessitated by changing international marketplace.

By Anthony Vagnoni

It’s August in New York, London, Tokyo and Berlin, and the days are hazy, hot and humid.  But soon the cold winds of winter will blow, and advertisers and agencies based in these Northern cities that need to shoot in warm-weather climes will instinctively turn their sights southward.  Question is, if they’re looking towards Australia, will they be able to shoot there?

The question might be moot, for while the Australian actors union, affiliated with the Media Entertainment and Arts Alliance (MEAA), says it’s on strike against commercial productions meant to air outside Australia—referred to as offshore work—the main Australian producers’ association is determined to no longer abide by its former contract for talent costs, having withdrawn from the agreement earlier this summer.  At the moment, the Screen Producers Association of Australia—which serves as the Australian counterpart to the AICP in the US and the CFP-E in Europe—claims that no offshore work is taking place in Australia, meaning the union really doesn’t have any productions to strike in the first place.

To get some insight into what’s happening on the production side, SourceEcreative recently spoke with Geoff Brown, Executive Director of the SPAA, which is the main umbrella group for companies working in all forms of film production, including television and feature films.  The SPAA currently has approximately 35 commercial production companies as members, Brown says.

He notes that offshore work is typically seasonal—most of it takes place during the Aussie summer, which is winter in the Northern Hemisphere countries of North America and Europe that generate most the industry’s offshore work. 

The Offshore Agreement—which SPAA entered into with the MEAA in 2005—has had a significant negative impact on member companies in Australia, Brown states.  The producer’s biggest issue seems to deal not so much with costs as it does with terms of the agreement itself. “It sets rates which cannot be varied,” Brown explains.  “It’s a set of rules that will not bend to the needs of clients.”

Underscoring how much the business has changed in four short years, Brown notes, “When the agreement was struck, it was a very different time.” 

The goals of the SPAA in originally developing the offshore agreement were to be transparent—to allow advertisers and agencies to know, up front, exactly what their costs would be in terms of talent, he says.  But it had another impact, which was to give talent in other countries an insight into the cost structure for agencies and marketers that wanted to shoot work in Australia. 

As a result, Brown says, the Aussie market has continued to lose work to South Africa, New Zealand and Canada: “What we’re finding is that the agreement just wasn’t working in the international marketplace.”

Brown says that Aussie producers have been frustrated by what he termed ‘inflexibility’ on the part of the talent union when it comes to the agreement.  Again, he cites how the industry has changed, and how advertising materials are now reaching consumers via different forms, a shift that is altering the economies of scale for commercial-making.  “When this was first set in place, the principle outlets for this work was broadcast TV and cinema,” he says.  “Now, these ads are being used in a multiplatform manner.” 

Producers need to be able to quickly respond to changes like this on the part of their clients, he adds.  “We need to respond to clients, and can’t be locked into a template” for costs and usage, he continues.

In a SPAA press release issues recently, Brown is quoted as saying that the actors union has been aware of the association’s issues with the Offshore Agreement for some time. “We have raised concerns with MEAA on several occasions since 2007, and SPAA members have asked repeatedly for variations to the Agreement in order to secure work, but such approval has often been delayed and in many cases denied by MEAA,” the release states.  The organization says that actors have been getting around the agreement’s restriction by agreeing to shoot offshore spots in New Zealand, where they’re not covered by the MEAA contract.

The statement goes on to say: “SPAA has enormous respect for performers and the value of their work.  This decision is not about forcing the lowest price: the international market finds our Agreement confusing and inflexible in a variety of ways, including formulaic terms for buyouts/usages and numbers of edits of a commercial. This makes it much more difficult to employ actors in Australia than our competitor countries such as New Zealand, South Africa or Canada.  Our producers will still be offering very good fees to actors, and SPAA will be providing producers with a guide to underlying conditions.”  Talent for offshore work is not paid on a strict buy-out plan in Australia, Brown says, but rather on a mix of buyout and usage fees. 

Brown is also aware that some of the production declines, in terms of dollar volume, can be attributed to currency fluctuations.  The SPAA has pegged the amount of production work that commercial shops have lost to companies in the countries mentioned above as between $50 and $60 million Australian dollars. 

The initial goals of the agreement, he notes, were meant to not only provide clients with transparency, but also with predictability—they’d be able to know, up front, what their talent exposure would be when working in Australia for offshore use.  “We felt these moves would help us attract more work, and initially they did,” Brown says.  “But now the international marketplace is quite different, and this agreement has been working against us. The market is just too fluid now.  The agreement has become a totally inappropriate tool for the times.”

How are member companies faring?  Brown says that EPs have been in contact with their agency clients from abroad to keep them abreast of the situation.  As for the union, he says they’ve taken a vote and say they will not work on offshore projects, “but that’s to be tested in the marketplace.  It will ultimately be decided by talent themselves, along with casting agents and the union.”

What are the prospects for Australian producers to win back the work that’s been going to other countries?  “If we can get our pricing structure back and get the unions to understand that the marketplace has to determine the price (for talent), I think we’ll be able to win them back,” Brown says.  “Australia is a natural choice for offshore production. We have the right environment, great crew and outstanding locations.”  Once the dust clears, as Brown puts it, the SPAA will be undertaking a marketing campaign aimed at bringing back the clients and agencies that have shot offshore work in Australia in the past.