Actors, Studios Near Agreement on Contract

Hollywood’s unfolding labor drama was on the verge of ending late Saturday as studios and actors closed in on a new three-year deal that would quash strike threats that have consumed the industry for a year.

Weary negotiators recessed for the night about 9 p.m., letting their current contract expire at midnight. They will reconvene at 10 a.m. today.

Both sides said the adjournment wasn’t a sign of impasse and that they were committed to reaching an agreement.

“We want to achieve a contract. We want to keep everyone employed,” said Pamm Fair, spokeswoman for the American Federation of Television and Radio Artists, one of the two actors unions.

Several sources late Saturday said an agreement could come as early as today.

“The planets are lining up,” said one source involved in the talks.

“I would be shocked if it’s not done” Sunday, said another. “We’re very close.”

A potential breakthrough involved revamping the way actors are paid when their work is shown on cable TV. Negotiators believed they found a way to put more money in actors’ pockets but still let studios pay them the same percentage rate they do now, according to sources in the negotiations.

Other concessions that actors are expected to get include increased minimum payments for TV performers and a special bump for guest stars in shows, better residuals for Fox network programs and added payments in some cases when shows air on foreign stations.

Saturday night’s talks were decidedly low key at the industry’s Alliance of Motion Picture and Television Producers headquarters in Encino, even including one birthday celebration.

During a dinner break, some Screen Actors Guild officials threw a football in the courtyard. Earlier in the day, SAG President William Daniels left the talks to attend his 50th wedding anniversary celebration in Santa Barbara after giving SAG officials a pep talk.

For studios and actors, a new labor deal would accomplish something that as little as three months ago was thought near impossible--keeping Hollywood on the job. But odds of a strike dramatically eased May 4 when writers agreed to a new contract valued at $41 million.

Before that, the industry was staring at possible simultaneous strikes by writers and actors that would have darkened sound stages and could have devastated the Southern California economy. A study commissioned by outgoing Mayor Richard Riordan estimated a potential loss of 81,900 jobs and $6.9 billion in income for the Southland if the two groups walked out.

So seriously did studios take the strike threats that they ramped up productions to finish films before Saturday’s expiration date. “Scary Movie 2,” for example, was put on such a fast track that it was edited while being shot.

The situation also made studios gunshy about starting any new productions that carried even the slightest risk of being shut down by a strike. Stars as big as Jim Carrey postponed decisions on future projects pending a resolution. Blunting the strike fever was the softening economy, an inability of writers and actors to form a strong alliance they could leverage against studios and the continuing financial pain actors have been feeling from last year’s six-month strike against advertisers.

In addition, the proliferation of staged, unscripted programs and game shows that don’t require professional writers or actors sent shudders through talent guilds worried that they would significantly cut into job prospects.

Although the threat of a strike eased, deal making involving new projects has been put on ice until the talks resolve. That’s because pulling the plug on projects is so expensive that studios aren’t taking any chances until the ink dries. Studios have had contingency plans in place for a year in anticipation of back-to-back strikes.

The writers’ deal in May was widely expected to serve as a template for a new actors contract, although union negotiators led by veteran bargainer Brian Walton insisted on calling the writers’ deal a “steppingstone.”

Affected by the latest talks are about 135,000 actors nationwide represented by SAG and its smaller sister union, AFTRA. . Talks started May 15, at first moving slowly, with actors setting as their primary goal boosting payments to journeymen, middle-class actors who make less than $70,000 a year.

The deal being discussed Saturday appears to do that. According to sources in the talks, both sides recognized that they could cut, and even possibly eliminate, the pension and health contributions that are sliced out of actors’ checks when their work airs on cable. Companies would then make up the difference in the health and pension contributions. That would treat actor payments the same way as those for directors and writers, who don’t have contributions deducted from their payments for cable airings.

Currently, when a cable channels buys the right to air a TV program such as “The West Wing” or “CSI: Crime Scene Investigation,” actors on the shows split a pot equaling 6% of the license fees. One source said that because of the health and pension payments, the 6% amount is more like 5.3%.

What makes the solution appealing to both sides, sources said, is that it would give actors as a whole about $3 million more, while letting studios pay at the same rates they pay now when programs are sold to cable. Studios had adamantly resisted increasing the rates because it would have put them under pressure to grant similar increases to directors and writers.

In tandem, actors plan to change the distribution of the 6% pot of money so that higher-paid actors get less and lower-paid actors get more. Although that is something actors will decide internally, they needed the approval of producers to proceed.

Other highlights of the expected deal include:

* Another boost for journeymen working actors by increasing minimums made by guest stars on TV shows.

* No increases in what actors get for video and DVD sales. Studios held the line on changing the current system, under which they can claim 80 cents out of every $1 of video or DVD sales as a manufacturing and marketing cost, then allocate 5.4% of the remaining money to actors.

* Minimum payments made to actors are likely to rise at about the same 3.5% rate granted to writers.

* The Fox television network by the third year of the contract will pay actors the same residuals rates as NBC, CBS and ABC, ending a discount the 14-year-old network negotiated when it was a fledgling operation. Writers received the same deal.

* The basic residuals formula remains when shows air on foreign TV channels, although actors will receive additional payments when shows sell for a large amount of money. The writers agreed to a similar deal.

Any deal would need approval of SAG and AFTRA members. Once the contract is settled, the so-called de facto strike, which that has hamstrung activity, hurt Hollywood should end within a few weeks. Because Hollywood operates so far in advance, the threat of a strike has led to production slowdowns that have had an impact similar to that of an actual strike.

Thomas Short, president of the International Alliance of Theatrical Stage Employees, said as recently as last week his members were suffering from a “dramatic slowdown” caused by the contract uncertainty.

Short said employment has been down as much as 50% among costumers, makeup artists and hairdressers, 40% among set artists and 30% among set painters.

A full return to business as usual may not occur until fall because studios have stockpiled movies. Television should return to normal sooner. Network shows typically begin shooting fall episodes in July.

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Times staff writer Richard Verrier contributed to this story.