Residuals paid for programs shown on cable TV remained a major obstacle Tuesday as contract talks between Hollywood studios and actors unions continued to creep toward a midnight Saturday expiration date.
Although both sides in the talks have downplayed the potential of a strike, sources involved in the negotiations said frustrations have risen this week.
Three other issues are also proving sticky: minimum payments to actors (actors want a 5% raise, compared with a studio offer of 3.5%), payments for work that airs in foreign markets and providing some kind of special sweetener for so-called middle-class actors who appear in guest spots on TV shows or in limited roles in films.
An economic forecast released Tuesday predicts that an actors strike lasting three months would cost Los Angeles 54,000 jobs and $3.2 billion in income. A one-month walkout would cost 21,700 jobs and $1.3 billion, according to the analysis by the Milken Institute of Santa Monica and Sebago Associates of Marina del Rey.
Actors are asking for 7.5% of the license fees paid by cable channels for shows, up from 6% now, arguing that they have not shared enough in Hollywood's lucrative growth in that business.
Studios argue that actors are enjoying increased payments from recent lucrative cable sales, including a record $1.2 million an episode being paid by Bravo for "The West Wing" and $1.6 million an episode paid by TNN for "CSI: Crime Scene Investigation."
Studios have been resisting, in part because giving in to actors would put them under pressure to also give writers and directors additional cable payments. In their recent negotiations with studios, writers were unable to get studios to raise those rates.
Sources on the union side complained that studios are refusing to budge on key economic issues and are set on trying to give actors the same deal they gave writers.
Studio sources counter that actors need to narrow their demands to their most important issues and are asking for too much money given the economic climate.
As expected, studios have shown a willingness to move on some issues granted writers, such as phasing out the discount on residuals the Fox network pays.
Actors are represented by the Screen Actors Guild and the American Federation of Television and Radio Artists, with studios represented by the Alliance of Motion Picture and Television Producers.
As for the Milken/Sebago report, the analysis is an update of a previous study the groups did in April at the behest of Los Angeles Mayor Richard Riordan. That report looked at the effect of dual strikes by writers and actors, now a moot point because writers settled with studios in May.
But a temporary actors walkout would hurt the Los Angeles economy almost as much as a strike by the two unions combined, Tuesday's update concludes, because it would still shutter production.