Ad Strike Failing to Cut Production Significantly

The nation’s top advertisers released figures Thursday affirming their stand that the longest acting strike in Hollywood’s history is failing to significantly slow the overall pace of commercial production.

The report issued a week before actors and advertisers try to jump-start stalled negotiations also shows a continued, dramatic increase in wages paid to nonunion actors who are crossing picket lines.

But Screen Actors Guild spokesman Greg Krizman dismissed the ad industry’s claim of business as usual: “Take away Shaquille O’Neal--20% of the Lakers’ lineup--and the team’s chance for success isn’t very good.” Krizman also described lost session fees as proof of the “absolute solidarity of members . . . they’re completely behind the strike.”

Advertisers completed 2,010 spots in August, up from 1,725 in July, according to the Assn. of National Advertisers and the American Assn. of Advertising Agencies. The trade groups estimated industry production in August equaled at least 80% of the spots shot in August 1999, a nonstrike year.

Session fees paid to union actors tumbled to $161,743 in August, down from $5.7 million in August 1999, according to the ANA and AAAA. At the same time, fees paid to nonunion talent skyrocketed to $3.8 million, up from $243,623 in July 1999. The figures mirrored equally steep fee gains for nonunion talent reported for July.

The figures underscore a growing belief in the ad industry that, despite some significant victories and an occasional draw, the strike by SAG and the American Federation of Television and Radio Artists also has generated a growing string of losses.

Striking actors failed to derail commercials to be aired during NBC’s upcoming television coverage of the Olympic Games. Back-to-school advertising was in place, and some advertisers aired new spots during last weekend’s National Football League broadcasts. Retailers and toy manufacturers say production of commercials is underway for the all-important holiday season.

“Business is continuing because the advertisers can’t afford to stop advertising,” said Steve Neely, a San Francisco-based executive producer for ad agency FCB Worldwide, which counts AT&T; Corp. as a client. Echoing a strategy adopted by most big advertisers, Sears, Roebuck & Co. said it is “continuing to shoot with nonunion talent, according to Assn. of National Advertisers and American Assn. of Advertising Agencies guidelines.”

SAG and AFTRA counter that the strike that began May 1 is hurting the industry. Krizman questioned why the industry is emphasizing the number of commercials being produced. “Is it quantity or quality that the industry wants? Advertisers have to ask if these spots . . . are going to sell products in the best way possible.”

The strikers also claim increased support from unions outside the entertainment industry, including the Teamsters and unions representing communications and construction workers.

Strike-generated rhetoric makes it difficult to determine who’s winning in such sectors as the auto industry.

The unions claimed a significant victory early in the summer when Ford Motor Co. agreed not to make spots until the strike ends. The company hasn’t made spots for the new Escape SUV, but Ford also maintains that the strike has yet to slow any of its planned advertising campaigns.

Strikers suffered a bitter defeat in July when General Motors Corp. went to Canada to shoot pro golfer Tiger Woods in a Buick commercial. SAG and AFTRA subsequently made GM its main strike target, but the company continues to shoot commercials on an “as-needed basis.”

Auto companies have lost the services of such talented actors as Richard Dreyfuss, the voice of American Honda Motor Co. commercials; Donald Sutherland, whose voice is heard during Volvo commercials; and Edward Herrmann, who appears in Dodge spots.

SAG and AFTRA say the lack of star power clearly hurts advertisers. “The major celebrity spots, which are always the most visible, the most highly accepted spots, aren’t there,” Krizman said.

“We know these voices are very effective,” acknowledged Jerry Rubin, chief executive of Rubin Postaer & Associates, a Santa Monica-based ad agency that produces Honda’s commercials.

Honda ads to run this fall will feature a nonunion actor’s voice, Rubin said. “We’ve had to work that much harder to find a voice that reflects the character and personality of Honda,” he said.

Casting industry experts say there’s plenty of nonunion talent in the country and around the world. Agencies say they often must spend additional days or weeks locating appropriate talent. And, even when actors are secured, potential pitfalls remain.

Union activists have successfully disrupted shoots in California, the Pacific Northwest, Eastern states and Canada. SAG and AFTRA members often take photographs of actors who cross their lines, posting them on a “hall of shame.” Some agencies now double-book nonunion actors signed for important roles in case a nonunion actor gets cold feet.

Agencies and production companies also are increasingly tight-lipped about where they’re shooting. “It’s getting to be cloak-and-dagger in many ways,” one California-based commercial producer said. “We don’t reveal where we’re going until the last minute. We arrange for special cars and vans to pick up talent.”

Ad industry sources say they’re increasingly likely to shift production to other countries, including Canada, South Africa, the Czech Republic, Spain, Italy and South America. “We don’t want to, but we’ve moved production out of the country like everyone else,” FCB’s Neely said.

The exodus is blamed for the noticeable fall in the number of permits pulled to shoot commercials on public property in Los Angeles. Industry sources say many spots are ending up at Los Angeles’ 375 sound stages, where permits aren’t required, as well as private, gated communities, college campuses and far-flung locations in Riverside, Orange and Ventura counties.

There’s no shortage of commercials when consumers turn on the television, and the strike isn’t flattening the spiraling cost of buying television air time. But the strike’s impact is being felt by businesses with strong ties to commercial production. One economist has estimated the daily economic impact of lost work in Los Angeles at $1 million--or more than $100 million since the strike began.

“In August, I worked one day; in July, I worked five days,” said Scott Dewees, an independent location scout who typically works more than a dozen days each month.

Rufus Burnham, who owns a Los Angeles-based camera rental business, estimates the strike has cost his start-up company $500,000 in lost revenue. He books some out-of-town work, but “that creates huge amounts of downtime because when you ship equipment it takes time to move back and forth.”

Businesses are cutting rates and looking elsewhere for work. Some companies are finding work in the theatrical and television sectors, where the threat of a walkout next spring by SAG and the Writers Guild of America has increased production.

ImagExperts, a film developer at Hollywood Boulevard and La Brea Avenue, has lost revenue from several customers, including Dewees, who spends more than $1,000 on film processing during a good month.

“But we’re looking at corporate business, wedding photographers, portrait studios and others . . . We don’t have any other choice,” said Jane Awni, ImagExperts’ general manager.

Striking actors and the advertising industry are scheduled to meet Wednesday in New York, the first such meeting since an unproductive session broke off late in July.

“Hopefully, these numbers will bring about a sense of reality about the economic consequences of the strike,” said Ira Shepherd, a lawyer who represents the advertising industry and advertising agencies. “The only ones winning in this strike are nonunion actors.”

Krizman counters that SAG “has offered modifications since mediators first called us together in mid-June. . . . It’s the industry that’s offered no modifications since April 14. Is this supposed to be ‘take it or leave it?’ How is that negotiating?”