Fact Checking the Blogs

Some assertions made by blogs and websites about Screen Actors Guild are inaccurate. One web site, claiming to post all responses that aren’t spam, did not post the following information provided to them by a Screen Actors Guild National Board member. We don’t know why the site refused to publish the following communication, but we do know that the information provided to the web site was accurate.

One additional fact, the Guild’s reserves now total $33 million.

These reserves are monitored by the SAG National Finance Committee and outside investment advisors and are regularly reviewed by the National Board of Directors. These reserves are separate from the funds held in trust for various purposes like, for example, unclaimed residuals or producers’ deposits. The $33 million in reserves is invested in various ways but is readily available if needed. All expenditures by the Guild are made in accordance with a budget approved by the National Board of Directors.

Here are the facts:

1. The $4 million surplus -- This number represents the actual operating surplus at the close of LAST YEAR (fiscal year ending April 30, 2008). The surplus was achieved through significant cost controls, reduced spending and higher than expected revenue. There was no projected deficit for fiscal 2008 (ending April 30, 2008) and SAG has in fact realized a significant increase to reserves.

2. Projected budget deficit: The CURRENT YEAR (fiscal year ending April 30, 2009) has a projected budget deficit of $6.5 million. This is an estimate.

A projected deficit is exactly what it sounds like: the projected expenses for the current year are expected to exceed the amount of anticipated annual revenue.

It does not mean the union is in financial trouble.

It does mean that because of an inordinate amount of necessary activity, the union may spend more than it brings in over the next year – money that comes from the Guild’s very healthy reserves.

That is why the organization has reserves – to equalize the budget in years of high activity. It’s the equivalent of moving money from savings to checking to pay for atypical expenses. And, it was not a surprise to anyone in finance. It was clear to all on staff and on the Board that 2008 would be an extraordinary year with multiple critical efforts requiring funding.

This budget deficit is not a new or unusual circumstance. SAG ran actual deficits in five of the last nine years, but none in the past 4 years (deficits in 1998, 1999, 2000, 2002 and 2003).

What is unusual is the number and scope of the strategic initiatives necessary to properly position SAG for successful negotiation of the contracts expiring this fiscal year – 8 in total. These negotiations are taking place during a time of changing business models and technology shifts in the entertainment industry and are a top priority for the Guild and its members. The projection also includes additional investments in IT infrastructure to provide even better services to our members.

SAG’s financial experts also reported that expenses to date for the current fiscal year (ending 4/30/09) have been less than estimated and the Guild is performing ahead of plan. Initiation fees are also higher than plan.

So, yes, SAG is projecting significant expenses in this fiscal year – because it is sound business practice to do so and is in the best interests of all SAG members.

3. SAG needs an audit: SAG’s financials are audited every year. The organization receives an annual independent audit through the reputable and well-established firm PricewaterhouseCoopers. PwC is one of the largest and most respected firms in the country. A PwC partner who reported on fiscal year 2008 audited financials proclaimed last year’s audit –“ the cleanest audit an organization could have.” The firm expressed NO concerns with SAG’s accounting and found that SAG management was cooperative, there were no internal control issues and no adjustments required.

4. Peter Frank: Peter Frank left his position as Deputy National Executive Director and Chief Financial Officer for personal and family reasons. He is justifiably proud of his accomplishments at the Guild and its excellent financial position. The National Board voted unanimously to acknowledge and appreciate Peter's contributions over the years and to wish him well in his future endeavors.

5. “Vote No” Campaign Expenditures: At the direction of the National Executive Committee of Screen Actors Guild, the organization spent $104,897.91 (not the misreported $257,345.22) on its opposition to the ratification of AFTRA’s Primetime Exhibit A agreement. This expenditure was made from funds previously budgeted and allocated by the National Board of Directors for outreach and education.

6. Budget in General – It is important to remember that a budget is an informed estimate that typically assumes a wide range of events that could impact revenue and expenses. The budget is compiled 14 months in advance of the end of the fiscal year for which the budget is produced. It is approved in April just prior to the beginning of the new fiscal year. While it is an informed estimate and represents the maximum anticipated, like all estimates, it includes some uncertainty.