Studios, actors reach accord

Hollywood’s actors’ unions and the major studios reached an early agreement on a new film and TV labor contract, capping nearly six weeks of talks aimed at averting a debilitating labor dispute.

The tentative accord announced Sunday morning would provide some modest pay hikes and a significant increase in contributions to the unions’ health and pension plans -- a top priority -- reflecting a pragmatic agenda pursued by the unions in the midst of a fragile economy.

The Screen Actors Guild and the American Federation of Television and Radio Artists were eager to strike an early deal with the studios to avoid a lengthy standoff like the one that erupted two years ago that left SAG members working without a contract for a year and destabilized production. The current contract doesn’t expire for nine months.

The proposed agreement with the Alliance of Motion Picture & Television Producers clears the way for SAG to begin negotiations with the studios on a separate contract covering basic cable TV and is likely to set the pattern for upcoming contracts to be negotiated by directors and writers.

Directors, who typically set the agenda in labor talks, this time will follow the lead of actors. The Directors Guild of America has said it will begin its talks this month. As with SAG, securing higher health and pension contributions will be a key goal for the DGA and the Writers Guild of America, whose contracts expire June 30 and May 1, respectively.

The proposed three-year actors contract takes effect July 1, 2011, and must still be approved by the joint board of the two unions and a majority of members of both unions before it is ratified. SAG represents 125,000 members, while AFTRA has 70,000 members. Many members belong to both.

SAG and AFTRA began negotiations Sept. 27. The unions had a falling-out in 2008 but have since resumed joint bargaining and have had discussions about merging, a goal made easier now that they have concluded the contract covering work in film and prime-time network TV and pay cable.

“Strengthening the pension and health plans was our top priority in these negotiations -- making such a significant gain in that area was a vital achievement,” SAG President Ken Howard said in a statement.

“I am extremely pleased we met our goal of increasing contributions to our retirement and pension plans, and that we successfully completed this negotiation now to protect the needs of performers early in the process,” AFTRA National President Roberta Reardon said.

The studios agreed to a 10% increase in the current rate of employer contributions to the unions’ health and pension plans, the largest percentage increase in the plans in more than two decades. For every dollar an actor earns, producers would pay a total of 16.5 cents into the health and pension plans, up from the current 15 cents. The plans have been hard hit by investment losses and rising medical costs.

Actors also would receive 2% annual pay raises, similar to what the Teamsters secured in their recent contract negotiations. The unions sought larger increases, citing how actors are struggling to get their “quotes” -- the fee they seek above scale -- and are seeing less income from TV residuals -- the fees they get from reruns -- because fewer shows are repeating on the networks or are later sold into syndication.

The proposed contract also would increase pay for guest stars and co-stars on pay-TV channels such as HBO and Showtime, increase by two the number of background actors producers must cover under union contracts in L.A. and other West Coast cities and broaden the definition of performers eligible to get union benefits for low-budget shows created for the Internet.

The unions, however, did not succeed in securing improved pay and work conditions for actors who perform on a motion-capture stage, a concern fueled by the huge success of James Cameron’s film “Avatar.”

Studios viewed the demand, along with the higher salary increases, as too costly given austerity measures they have taken during the weak economy and falling DVD sales that have eroded studio profits.

“The deal offers increases in benefit contributions, wages and other areas critical to working performers while being responsive to the current challenges facing feature film and television producers,” the alliance said in a statement.

richard.verrier@latimes.com