Actors Strike Will Continue as Talks Collapse

Negotiations between two actors unions and the advertising industry broke down late Wednesday, dashing hopes that the longest strike in Hollywood history will end any time soon.

After a day of increasingly fragile and acrimonious talks, the two sides finally pulled the plug after failing to close the gap on two main issues: how much actors should be paid for ads that run on cable TV, and whether future labor contracts should include commercials made exclusively for the Internet.

The negotiations, held in New York, fell apart after two weeks of near round-the-clock talks.

The news is a crushing one for Southern California’s commercial production industry, which has seen work flee to other areas such as Canada and Europe because of the strike.

Economists have estimated that the strike is costing Southern California as much as $1 million a day in lost production, and has had an overall economic impact of about $2.5 million a day when all the economic ripples are felt. The strike started May 1.

Hollywood and Madison Avenue had been optimistic that the latest round of daily talks, held with a federal mediator, would finally bring the strike to an end.

The two actors unions, the Screen Actors Guild and the American Federation of Television and Radio Artists, also rejected a proposal by advertisers for a 90-day “cooling off” period, in which they would have gone back to work under their old contract, negotiated in 1997.

“It’s a hard-line corporate attitude in an industry that is having record years as well as making record purchases of media time,” said SAG chief negotiator John McGuire.

Ad industry negotiator Ira Shepard countered that the industry had “made significant compromises in order to end this strike with a fair package.”

The breakdown came even though both sides took off the table major proposals that the other side found unacceptable.

The industry was no longer insisting that actors accept a flat fee for ads that run on network television, instead of being paid whenever they air as actors are now. The union had called that proposal an unacceptable “rollback.”

Actors were also willing to drop demands that they receive payments whenever ads run on cable TV, instead of the flat fee they receive now, so long as advertisers gave them a significant pay increase.

Shepard called the union “uncompromising,” and accused it of demanding a 150% increase in cable TV payments, which are currently based on a series of complicated scales.

He added that the industry believes it is premature to have the contract cover ads just made for the Internet, adding that it offered payments for commercials made for TV that also run on the Internet.

But SAG’s McGuire said that Shepard’s number is deceiving, and that the overall impact on the industry would only have been 3.5% to 5% a year over three years. That’s because SAG was willing to forgo any increases in residuals for network ads as long as the cable TV offer was fair, McGuire said. He also said that the industry was unwilling to establish an adequate system to monitor when commercials run so actors can be assured they are being paid for their work.

“As far as I’m concerned, we made major modifications and gave them a very reasonable deal to . . . end this strike,” McGuire said.

Entertainment labor leaders and executives took the news hard. The daily negotiations, held with a federal mediator, had sparked optimism that the strike was about to end.

“This is truly disturbing. How much longer are they going to be away from the table?” said one union leader.

Both sides are likely to come in for criticism. Critics of the union are likely to accuse it of asking for too much, while critics of the advertisers will accuse it of union busting.

SAG has announced plans for a boycott of major advertiser Procter & Gamble, whose brands include Tide. A spokesperson for P&G; did not return calls.

“If worse comes to worse, we have to start boycotting and we have to start not buying products,” said actress Susan Sarandon at a New York news conference attended by stars such as Julia Roberts, Tim Robbins and Richard Dreyfuss.

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Bates reported from Los Angeles; Lieberman reported from New York.