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Strike by Actors Still a Possibility : Labor: ABC, CBS and NBC are not involved in the settlement among actors’ unions, movie studios and film / TV production companies. Rerun residuals are seen as the stumbling block.

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TIMES STAFF WRITER

The announcement last week that the possibility of a Hollywood work stoppage had been averted with tentative agreement between producers and actors on a new three-year contract may have been premature, at least as far as television is concerned.

A strike involving the three major TV networks and about 120,000 members of both the American Federation of Television & Radio Artists and the Screen Actors Guild could still happen. ABC, CBS and NBC were not parties to last week’s settlement and are said to be asking for major concessions from the actors’ unions, whose current pact expires June 30.

For the record:

12:00 a.m. March 5, 1992 For the Record
Los Angeles Times Thursday March 5, 1992 Home Edition Calendar Part F Page 3 Column 4 Entertainment Desk 7 inches; 232 words Type of Material: Correction
TV contract talks-- An article in Monday’s Calendar incorrectly reported that a dispute between the three major television networks and Hollywood film and TV actors could result in a widespread TV production work stoppage this summer. According to the Screen Actors Guild and the American Federation of Television & Radio Artists, the dispute will have no effect on most prime-time entertainment programs, which are made by studios and independent production companies. According to the unions, the dispute, which centers on payments to actors for reruns, currently involves only three series that are produced in association with the networks--ABC’s “The Commish,” CBS’ “Evening Shade” and NBC’s “The Fresh Prince of Bel Air.” Some TV movies produced by the networks might also be affected.
The article also misstated the formula for determining residual payments to actors on prime-time network series. Under current terms, each rerun of a program in network prime time pays the performer 100% of original compensation for each run, subject to various ceilings. A 30-minute show has a ceiling of $1,984; an hourlong program has a ceiling of $3,100 and a two-hour TV movie’s is $3,472.
For example, if an actor is paid $500 for one day’s work on a half-hour sitcom, the second network prime-time broadcast would earn him $500, or 100% of the total original compensation. If an actor is paid, say, $3,000 for working on a half-hour show, the second network prime-time broadcast would pay only the “ceiling” amount, or $1,984. While some major stars are able to negotiate higher residual fees, the majority of TV performers are paid according to these ceilings.

The key issue: prime-time residual payments on network reruns.

No new talks have been scheduled since Feb. 13, when, in a dramatic move, negotiators for CBS, NBC and ABC abruptly stood up from the negotiating table in Los Angeles, packed their briefcases and left, claiming later that the unions refused to address “serious network cost issues.”

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The Alliance of Motion Picture & Television Producers went ahead and negotiated a tentative agreement without the networks. Union boards are scheduled to vote on the settlement this week.

Network and union officials have refused to discuss the stalemate publicly since the walkout, but a survey of behind-the-scenes players revealed that tens of millions of dollars in rerun residuals for as many as 10,000 actors are at stake.

Most actors’ salaries are paid under separate contract by the company producing the program--the alliance members--but the networks are responsible under their licensing agreements with the production companies to pay a residual to each actor in a prime-time show twice: when the program is first broadcast and again when it is rerun for the first time. Both amounts are the same: a maximum of $1,984 for a 30-minute show, $3,100 for an hourlong program and $3,472 for a two-hour movie.

The networks are seeking to reduce the rerun fee by as much as 50%, contending that the savings could mean the difference between their being profitable or not next year.

Analysts predict CBS’ 1991 loss to be at least $110 million while NBC is expected to come out at least $60 million in the red. ABC alone was profitable last year, although its earnings are not expected to top $100 million once the final audit is made public.

SAG and AFTRA negotiators, on the other hand, maintain that many of their members must keep their rerun residuals at the present level or risk standing in unemployment lines during the spring and summer months, when program production slows.

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If boards of both guilds vote this week to ratify the new three-year pact with the major Hollywood studios and more than 250 independent television and motion-picture production companies, movie and prime-time TV production would continue unimpeded.

Should the unions not also come to terms with the networks, however, whether any of the TV shows would air come fall remains in question. No one is certain how a worst-case scenario would unfold because the networks have never before negotiated separately from the studios and other producers.

But the provision for network rerun residual payment is missing from the contract drafted last week, according to sources close to the negotiations. Were there to be a strike after the June 30 expiration of the current pact, it would come just as production is gearing up for the fall TV season.

Some industry observers speculate that a recent change in the Federal Communications Commission’s financial syndication, or “fin/syn,” rules may be at the heart of the networks’ hard-line stance on rerun residuals. On a 3-2 vote last October, the commission relaxed a 21-year-old rule that had severely limited the networks’ ownership of prime-time programs. Beginning next season, ABC, CBS and NBC will be able to own up to 40% of the shows that they air.

Only a handful of shows, such as NBC’s “Fresh Prince of Bel Air,” ABC’s “America’s Funniest Home Videos” and CBS’ “Evening Shade,” are currently owned in part or whole by the networks. Most are owned by independent companies, such as Carsey-Werner or Witt Thomas Productions, or major studios, such as Universal or Paramount.

If the networks increase their in-house production in the years ahead, as many industry observers predict, they will have a double incentive for keeping residual payments down: both as networks and as program owners. There is speculation that they would attempt to use any concessions on rerun residuals won this time out as leverage to lower residual payments for syndicated programming.

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Although the unions have no date yet for returning to the negotiating table on the prime-time issues, AFTRA will begin talks on March 9 with all three networks on a separate union contract covering daytime soap opera actors and network news personnel.

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