Strike Jitters Already Slowing Movie Projects

Fresh from the monster hit film “Dr. Seuss’ How the Grinch Stole Christmas,” actor Jim Carrey is putting his career on hold pending a possible walkout by the Screen Actors Guild.

He’s not alone.

The possibility of a strike “is an omnipresent thing. It’s constantly in everybody’s thoughts,” said Carrey manager Eric Gold, explaining the star’s decision to pass up another $20-million payday.

Weeks before actors and writers begin to negotiate new TV and film contracts with studios, Hollywood is feeling the early chill of a paralyzing “de facto strike.” The industry is convinced that rising labor tensions with SAG and the Writers Guild of America foreshadow strikes midway into next year.

In anticipation, new projects are drying up, and work across the industry is slowing much as it would during an actual strike.

The rule for approving new productions, said Warner Bros. Chairman Barry Meyer, “is that the studio be 100% sure it will be done before the [SAG] contract expires” on July 1.

So far, none of the major players involved in negotiations are moving quickly. Today, representatives of the studios will sit down for the first time informally with SAG and its sister actors union, the American Federation of Television and Radio Artists, to go over ground rules for talks.

The unions hope to persuade studio chiefs to get directly involved in negotiations, rather than leave talks to labor relations executives who the unions believe drag their feet.

SAG members won’t formally decide on their exact demands until January. Negotiations between writers and the studios to jump-start talks in October unraveled when producers declined to specify the kind of money writers could expect.

Miles Apart on Money Issues

Hollywood’s pessimism is justified. Labor and management are miles apart philosophically on money issues. Writers and actors argue that they’ve been shortchanged for years while the economy boomed; studios say the unions are naive about the shifting economics of television and movies. Writers also have long-standing grievances with directors that they want producers to solve.

Aggravating the tension is a growing militancy among Hollywood’s unions. Writers and actors are expected to coordinate their job actions to put added pressure on the studios. In that environment, even the smallest issues could become insurmountable obstacles.

“There’s more uncertainty this time around than in the past,” said J. Nicholas Counter, chief negotiator for the Alliance of Motion Picture and Television Producers, the industry’s bargaining group.

Should a full-fledged entertainment strike grip Hollywood next summer and idle much of its 271,000-person work force, Southern California’s overall economy would be badly hurt. The Los Angeles Economic Development Corp. estimates the direct effect in lost salaries, spending and equipment rentals could be $250 million a week.

Entertainment accounts for about 10% of the area’s highly diverse, $331-billion annual economy. Hollywood’s economic clout in the area has grown over the last decade as entertainment outpaced other Southland industries such as aerospace.

The recently settled six-month strike against the advertising industry cost actors many millions of dollars in lost wages. But it also galvanized a fragmented union. Now some executives and even other Hollywood labor officials are pessimistic that actors can easily forge a new deal.

“The only optimism is if SAG felt that, with the devastation of the commercial strike, it wasn’t worth taking on another one,” said former Fox studio chief Bill Mechanic. “But that doesn’t seem to be what they’re saying publicly.”

Confidence in SAG has suffered from the stalemate between actors and agents over new rules governing the two groups. SAG also has been beset by internal tensions between more militant Los Angeles members on one side and more moderate New York members and AFTRA union officials on the other.

SAG’s veteran chief negotiator, John McGuire, whose moderate approach during the ad strike was at odds with union leaders’, has said he may take a back seat in the upcoming negotiations.

But SAG President William Daniels argues that the union can make a deal if producers bargain fairly.

“We just finished a six-month strike, and I don’t want to put my members through something like that again,” Daniels said. “But it’s the only stick a union has.”

With Hollywood sitting on a labor powder keg, studios have been stockpiling scripts since last summer and setting up as many movie and TV projects as possible to build an inventory that can weather a strike.

At Walt Disney Co., executives have worked quietly for six months on their strike plans, forming committees that report to President Robert Iger. Plans include lining up as many films as possible, and putting more news, game and reality programs on Disney’s ABC network to fill time slots.

“There’s been so much written about it and so much discussed about it internally that we are extremely well prepared for it,” Chief Executive Michael Eisner said.

But even as they scramble to finish films and TV projects, studios are ready to slow new work starting as early as next month and wind down further every week after that if new agreements aren’t reached.

Studios are loath to pull the plug on movies and TV projects in midstream. It’s disastrous financially, and there’s no guarantee that the cast and crew will be available when the project revs up again.

Director John Badham’s new film “Ocean Warriors,” starring Aidan Quinn, about the founder of the Greenpeace environmental movement, starts shooting Jan. 15, theoretically enough time for Badham to comfortably wrap the Paramount Pictures release. Still, Badham said, any unforeseen delays in production such as weather problems could force him to shoot every day to beat a strike deadline.

“You don’t want to find out a week after the contract expires that there’s a half-dozen lines you need from your lead actor,” Badham said.

Production Levels Had Been Strong

Some projects are already in limbo. At USA Films, executives are eager to launch “Passengers,” but they shelved the project because director David Fincher may not be available in time.

Complicating matters is the current production frenzy. Not only has it strained availability of actors, directors, crews, editing facilities and technical workers who get a movie into shape after filming stops, it also has driven up prices because of that supply crunch.

Gold, who is producing next summer’s “Scary Movie II” sequel to the hit horror spoof, said director Keenen Ivory Wayans plans to cut that film as he’s shooting it.

“You can’t go on a normal pace here,” Gold said.

A de facto strike is unique to Hollywood because of the long lead times required for many projects. New ideas are stillborn if there’s the slightest chance that the plug may be pulled. Executives typically “count backward” from the deadline to compute how much time they have.

“If you have a picture that has a 10-week shooting schedule, and a strike could come in 12 to 15 weeks, why would you start the picture?” said producer Sidney J. Sheinberg, former president of entertainment conglomerate MCA Inc.

Affected first will be big-budget movie projects that require months to prepare. Then, smaller films and TV movies will be shelved. TV episodes would probably be the last to go because they work on shorter cycles.

Any slowdown would first affect production workers who spend months before the cameras roll designing and building sets, making costumes and arranging to film on location outside Hollywood. A slowdown also would crimp Hollywood’s frenzied deal-making that lays the groundwork for future jobs.

For more than a decade, Hollywood’s producers and labor guilds didn’t have these problems. They started talks well in advance, narrowing issues to a handful of topics and holding sessions that were at worst mildly acrimonious.

But writers and actors in the last two years came to see the early, friendlier talks as a sellout, and ousted officials who supported those methods and returned to a more confrontational style of negotiating.

Writers and actors insist that they don’t want a strike. But they also argue that the time has finally come to address money issues that percolated for years.

“We’re not trying to squeeze money out of them that is either untoward or unfair,” said TV writer Charles Holland.

The biggest money issue is payments that actors and TV writers get for programs that run on cable TV or in foreign markets. Both groups complain that studios have skimped when programs air in those booming markets. Producers counter that they overpay actors and writers for network shows because audiences there have been fragmented by competition from cable and new networks.

SAG President Daniels said he has residual checks at home for as little as 87 cents for TV shows. Daniels said that when “St. Elsewhere,” for which he twice won a best-acting Emmy, was sold to a cable channel he received about $8,000.

Another sore spot with TV writers and actors is that the Fox network pays only two-thirds of the residuals that NBC, CBS and ABC provide. Fox argues that its audience remains smaller than the other three networks.

In movies, writers and actors believe they receive too little for video and DVD sales. They also want assurances that they will be paid fairly when Internet entertainment finally blossoms. (BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Foreign, Cable Earnings at Core of Dispute

The Writers Guild of America and the Screen Actors Guild both are at sharp odds with the studios, represented by the Alliance of Motion Picture and Television Producers, on seven issues. The writers’ contract expires May 1; the actors’ on July 1.

1. Foreign TV Residuals:

Actors and writers feel shortchanged amid a boom in foreign TV sales of U.S. movies and television shows. Studios say that rising foreign sales merely offset rising production costs and that the market may shrink as foreign TV networks develop their own shows.

Actors and writers currently get a one-time payment of 35% of their minimum fees. A writer paid $20,000 for a one-hour drama, for example, would get $7,000 for the foreign TV sale.

2. Cable Residuals:

Actors and writers feel shortchanged as the cable TV industry has exploded. Giant companies such as Disney, Viacom, Time Warner and Fox, guilds say, funnel shows to their own cable channels at below market rates, lowering payments to writers and actors. The studios say actors’ and writers’ fees have grown with the industry, whose expansion has come at the expense of the major networks. They insist they pay fair market value for their own shows.

Writers currently get 2% of the license fee that cable channels pay. Actors get 6% but split it among a larger pool.

3. Fox Network:

Fox pays actors and writers less than NBC, CBS and ABC on the theory that the smaller network is still developing. The guilds believe it is time for Fox to pay full freight. Fox argues that its viewership is not yet on par with the other networks’.

Fox now pays two-thirds of what major networks pay.

4. Videocassette and DVD Payments:

Studios retain 80 cents of every $1 in videocassette and DVD sales before writers and actors get their share. The guilds want a larger cut. The studios say they are covering manufacturing and marketing costs and the rising cost of production.

Writers currently get 1.8% of that pool of money. Actors get three times that amount but split it among more people.

5. Internet:

Anticipating the day when movies and TV shows are shown over the Internet, the guilds want to get a fair payment plan in place, something they say they failed to do before the explosion of foreign sales and the cable industry. Studios say it is premature.

Nobody is making money on the Internet now.

6. ‘A Film by’ Credit:

Movie writers complain that studios routinely give directors a credit that reads “A film by . . . ,” a credit they say directors do not always deserve. Directors say writers have no right to dictate credits. Studios would like to avoid the whole issue.

Once given to top directors such as Alfred Hitchcock and David Lean, the credit often is bestowed on even first-time directors.

7. Writers’ Rights:

Movie writers want easy access to sets, cast readings, movie dailies and test screenings. Studios would like to avoid the issue.

Access currently depends on the relationship between the director and writer.