Musicians Set to End Vegas Strike : Labor: Union drops its demand to restrict taped music at hotel shows. The settlement heads for a vote this week.

Representatives of striking Las Vegas musicians and five major hotel-casinos on Monday announced a tentative settlement of a 7 1/2-month strike that began when the resorts insisted on replacing orchestras in Las Vegas production shows, such as the Folies Bergere, with tape-recorded music.

The four-year contract, which will be submitted to 150 affected members of Local 369 of the Musicians Union of Las Vegas for ratification Wednesday, gives the hotels unfettered power to replace musicians with taped music. In exchange, three of the hotels that feature the production shows will pay $1.3 million in compensation to 46 musicians who will be displaced.

The strike began June 3 when the Tropicana Hotel’s house band walked off the Folies Bergere show after negotiations reached a stalemate. It was the most prolonged labor dispute last year among dozens of contract negotiations for tens of thousands of Las Vegas hotel and show workers. The previous round of hotel and casino industry contract talks, held in 1984, featured widespread picketing, violence and hundreds of arrests.

Previous contracts between the hotels and the musicians union had included job-security provisions that would limit the use of taped music and call for house musicians to be paid on some occasions when they were displaced by a visiting orchestra. But hotels, saying they were losing millions of dollars on entertainment, demanded the elimination of the restrictions.

All 46 musicians who play in production shows at the Tropicana, Flamingo and Bally’s hotels struck or were fired when the hotels unilaterally imposed new contract terms eliminating the restrictions.

As the strike dragged on, the small musicians union gradually dropped some of its demands for restrictions on taped music, and the battle came down to how much severance money the hotels would be willing to pay.

The compromise includes not only severance pay for the production show musicians but smaller one-time payments of several thousand dollars to 54 musicians in the “celebrity” showrooms of Bally’s, Caesars Palace and the Las Vegas Hilton who figure to lose some employment in the future because of weakened work guarantees.

The settlement guarantees only three full-time musicians and a bandleader in celebrity showrooms. Many stars now bring their own orchestras to Las Vegas.

“This has been a difficult, very trying time for this union,” Mark Massagli, president of Local 369, said Monday night at a news conference at Caesars Palace.

“We’re happy that it’s over,” said John Giovenco, president of Hilton Nevada Corp., the parent company of the Las Vegas Hilton. “The issues were not only issues of economics but also of principle among the union and the hotels.”

Beth Smith, a union spokeswoman, said the question of live music “is now in the hands of the public. If they want live music, they’ll have to say so. One of the biggest things we’ve accomplished is to have raised the consciousness of the people in this town about live music.”

WALKOUT THREAT--The entertainment industry braces for a musicians strike over special union funds. D2