Some Progress Made in Key Hollywood Talks

Negotiators for producers and actors moved closer Thursday to an agreement that could avert a strike this summer, but did not immediately resolve major differences over how much money actors deserve when shows air in booming foreign and cable TV markets, sources familiar with the talks said Thursday.

The news trickled out on the day both sides had set as a self-imposed deadline to work out an agreement.

Although the contract between producers and actors--represented by both the Screen Actors Guild and the American Federation of Television & Radio Artists--doesn’t expire until June 30, the passage of Thursday’s deadline without any resolution in sight could prompt a “de facto” strike in Hollywood in which studios and producers slow or even halt production out of fear of a summer walkout.

Any slowdown would ripple strongly through the Southern California economy because Hollywood production is booming, and the entertainment business has assumed a larger role as an economic engine in the Southland in recent years.

Sources said, however, that significant progress was made in deciding how to deal with the biggest issue on the table: the complicated and cumbersome subject of foreign and cable TV “residuals”--the share of revenue that actors get.

Sources said both sides have something akin to a handshake agreement to break off the residuals issue and negotiate it later. They would commission a comprehensive industrywide study on the residuals issue, and try to work out a new agreement with producers over a two-year period.

Officials of the Writers Guild of America are known to favor dealing with the residuals issue in the same way for their members. It’s likely that the two guilds would team up in talks with producers on the matter.

Actors say residual rates are antiquated in the wake of the explosion in the foreign and cable TV businesses this decade. Producers argue that while those rates may be low, actors are overly compensated in other areas, specifically residuals in the struggling television syndication business.

People close to both sides cautioned that while progress is being made in the talks this week at the Radisson Valley Center Hotel in Sherman Oaks, negotiations remain volatile and in a delicate flux.

“There still are significant money issues on the table,” one source said, referring to minimum rates actors in various categories receive. A source close to the unions emphasized that as of late Thursday, nothing was in writing.

Given that the midnight Thursday deadline was a self-imposed one, both sides could conceivably work out an agreement over the next day or two without hurting production.

But a source close to the producers said top studio executives indicate they will wait only a few days before deciding to slow or stop some productions. Also affected could be the financing of independent films.

Although history continues to suggest that a strike remains unlikely because contracts usually get negotiated in time, Hollywood executives have been more nervous than usual about a potential walkout this time because there have been strong indications talks would be more contentious.

The last SAG strike came in 1980. The most damaging Hollywood strike in recent times came in 1988 when writers walked out in an action that some estimated cost the industry and writers about $500 million.

Outside of the residuals, another sticky issue is said to be language affecting actors working on shows made by U.S. producers in Canada. Concerned about the growing amount of production work flowing to Canada because of lower costs and government incentives, SAG wants to make sure that actors used there are clearly covered by a SAG contract.

Other issues in the talks have included ceilings on amounts producers pay into health and pension plans.