Larger Issues Remain as Actors Celebrate

Jubilant actors erupted into frequent applause at a jammed union meeting Monday, even though a settlement of their six-month-long strike against the advertising industry failed to resolve key issues vexing Hollywood’s labor relations.

Richard Dreyfuss, one of the most active stars in the strike, said, “My head hurts from bumping on the ceiling.” Despite reports of divisions and lack of unity within the actors’ unions, he said, “At the end of the day, we held together and won.”

Round-the-clock negotiations produced agreement on a new three-year contract. However, neither negotiators for the Screen Actors Guild and the American Federation of Television and Radio Artists nor those for the advertising industry could realistically declare victory.

Both sides punted over the larger issue that made the strike so difficult to settle--establishing a new methodology to pay actors that takes into account the explosive growth of cable television and the increasing fragmentation of the network TV audience.

SAG President William Daniels noted that no one really wins with a strike. “The time, money, heartache, stress--that’ll never be forgotten.”

Said industry negotiator Ira Shepard: “It just came to a point where there was a desire to reach a fair agreement on both sides.”

SAG chief negotiator John McGuire called it a “fair, equitable contract,” and noted, along with AFTRA chief negotiator Mathis Dunn, that actors must now work on rebuilding a relationship with the ad industry.

“We will immediately begin to reach out and try to build bridges, to reconstruct them,” Dunn said.

Still, the new pact does little to ease the brittle labor relations now consuming Hollywood. The stage remains set for a devastating halt to production next year when actors and writers bargain separately with movie studios, TV networks and producers.

The actors’ settlement with the advertising industry announced Sunday buys only the ad industry three years of labor peace.

Actors get a sizable pay raise to end a strike that union officials have estimated cost actors as much as $2 million a day in lost wages. Not only do actors receive an increase in the flat fee they get for cable ads, the industry also agreed that ads made exclusively for the Internet will include union actors.

“Certainly, we have to eventually come up with something in which everyone is going to be able to be treated equitably, because you’re going to still have those issues around,” said Todd Amorde, SAG strike chairman.

At the heart of the continuing conflict within the entertainment industry is the widespread belief among actors, writers and directors that they aren’t sharing in the lucrative profits resulting from the 25-year boom in cable and foreign TV markets, and that they risk a another lost opportunity in the developing Internet.

Actors wanted to be paid each time commercials run on cable, as they are now for network ads.

For their part, industry representatives believed that shrinking network audiences meant they are overpaying for commercial talent in ads running on the major broadcast networks. The industry wanted to pay a flat fee to actors in network ads, as they do now for actors in cable ads.

On Monday, Hollywood executives and union leaders grasped for any signs of what the settlement means for next year’s crucial negotiations, debating whether actors will feel empowered enough to stomach another costly strike over these still outstanding issues.

That question is hard to answer because the pool of actors affected by the TV and film strike is different from the group of actors affected by the commercial negotiations. In addition, some unique issues are being bargained, including whether Fox should be treated as a network on par with CBS, NBC and ABC, which it hasn’t been in the past.

SAG’s direction in upcoming negotiations will be become clearer next week when election results are tallied for 25 open seats its 105-seat board. All told, a staggering 74 actors are running for those volunteer offices. Last November, SAG members elected a group of hard-liners who promised tougher negotiations.

On Monday, both actors and producers downplayed any talk of a strike, seeking to ease fears of a repeat next year.

“We know that if we ever need to strike, our members are more than capable of striking and striking hard. But nobody wants another strike,” said David Joliffe, a SAG strike leader.

Union leaders declared at least a partial victory mainly because members held fast during the strike and fought off demands that they give up residuals that they receive for network ads. Union leaders attributed the settlement to pressure brought on major advertiser Procter & Gamble through a boycott of its Tide detergent, Crest toothpaste and Ivory soap. They said they believe negotiators were under pressure from CEOs at major companies.

But industry negotiator Shepard denied that advertisers caved in to pressure, or that pressure on any one company made the difference.

“The only thing I can say is that, among the senior negotiators from both sides, we all felt pressure and an obligation to come to an agreement--not from a boycott, not from people being out of work--but because our job as negotiators is to work out an appropriate compromise,” Shepard said.

Overall, negotiators said the ad industry is expected to fork over around 9% more in total dollars to actors as a result of the deal, although some SAG officials believe that figure could eventually exceed 10%, depending on the growth in cable TV ads that are made.

Last year, the industry overall paid SAG and AFTRA members $721 million for commercial work.

A principal actor in an ad that gets widespread airings on cable would receive a flat fee of $1,390 in the first year of the new contract, $1,706 in the second and $2,460 in the third, more than twice the current amount. Also, the contract gives actors a toehold in the Internet area by covering ads made exclusively for that growing medium.

In return, actors agreed that the contract would start when work resumes, most likely on Monday, rather than retroactively to when the strike started on May 1. Also, pay raises will take effect annually. The union had sought an accelerated schedule with the first raise coming in six months, another in 18 months.

Actors were clearly ecstatic with the prospect of returning to work next week, pending ratification by union board members. More than 20 messages were posted on ActorSite, a Web site that serves as a forum for Los Angeles actors.

Typical was one from “Dario” that said: “What else can I say except ‘Thank God.’ ”

*

Bates reported from Los Angeles, Jensen from New York.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

The SAG/AFTRA Settlement

The settlement between advertisers and actors represented by the Screen Actors Guild and the American Federation of Television and Radio Artists ended a six-month strike, the longest in Hollywood history.

Overall, the amount the ad industry will pay actors when averaged out among different categories is likely to increase around 9% under the contract settlement, although some union officials believe the figure could be higher, depending on the volume and type of ads made. Last year, the industry paid actors $721 million for commercials.

*

What SAG got

* No rollback: Advertisers withdrew a demand in which actors would have given up receiving residuals whenever ads run on network TV. Advertisers had wanted to pay a flat fee, as they now do for cable.

* Increased cable payments: The flat fee for a principal actor in a commercial that gets widespread airings on cable rises from $1,014 now to $1,390 in the first year of the contract, $1,706 in the second year and $2,460 in the third year. Advertisers have the right to unlimited airings over 13 weeks.

* Higher session fees for network ads: Actors will receive a $500 “session fee” to shoot a network ad, up from $478.70, for a day’s worth of shooting and for the first time the ad airs on a network. After that, residual payments stay the same, starting at $122.70 the second time the ad airs and sliding down to $46.65 the 14th time it airs.

* Internet jurisdiction: Ads made exclusively for the Internet will use union actors, which gives actors credit toward health and pension benefits.

What advertisers got

* No residuals for cable: Actors withdrew their demand to be paid each time an ad runs on cable, keeping the flat fee instead.

* Three-year deal: The contract starts as soon as actors go back to work, and is not retroactive to May 1 when the walkout began.

* Annual increases: Pay increases take effect on a yearly basis. Actors had wanted increases six months and 18 months into the deal.