2 Agencies Close Commercial Operations, Blame SAG

Blaming the Screen Actors Guild for its six-month commercial strike two years ago, two long-established Los Angeles-based talent agencies representing commercial actors are shuttering their ad operations, affecting an estimated 1,400 performers.

DDK Talent Representatives, which represents more than 600 commercial actors, will close Friday, and Abrams-Rubaloff & Lawrence is in the process of notifying 800 of its actors that its on-camera and voice-over division will shut down Sept. 27.

DDK has been in the commercial business for 12 years. Abrams-Rubaloff has been in the business since 1965.

“By necessity, we are changing our economic model,” said Abrams-Rubaloff & Lawrence owner and President Richard Lawrence, who also said the slowdown in the ad market was a factor. “When I bought the company in 1984, the commercial division accounted for 70% of the company’s revenue. Now it’s less than 20%. It was declining before the strike, but the strike completely nailed us. It took away about 30% of our business, which is the difference between profit and loss.”

Abrams-Rubaloff will continue to operate its other divisions, which include television packaging and representing TV producers, directors and hosts. It also plans to expand into the television literary business.

The closures come against a backdrop of increasing discord between the guild and Hollywood’s talent agencies, which are arguing over basic rules governing their relationship.

“I’m keeping my corporation open but ending my day-to-day representation of commercial actors. I am entertaining another business opportunity, and I would never have entertained that opportunity if it weren’t for the strike,” said David DeLorenzo, president of DDK. “The strike decimated what was a very healthy industry because of what I see as bad decision-making on the part of the Screen Actors Guild. The vote that created the commercial strike of 2000 was manipulated by disinformation, misinformation and propaganda by the Screen Actors Guild.”

The guild disputes those charges. “We achieved significant gains during the strike, and overall, it was beneficial to our members. While the commercial production levels didn’t go back to the same levels, that’s true, it’s an unfair assessment to totally blame the union for the levels of production,” said SAG spokeswoman Ilyanne Kichaven. “The overall economy and production levels were down due to Sept. 11.”

The commercial strike, which began in May 2000 under the leadership of former SAG President William Daniels, lasted for six months and became the longest strike in Hollywood’s history. The strike was a costly one for both the Screen Actors Guild and the American Federation of Television & Radio Artists, which together lost more than $200 million in earnings, by their own accounts. The city also suffered an estimated $270-million loss in crew wages and vendor payments.

“Advertising has continued in one way or the other, but post-strike much of it has been outside the U.S.,” said Steve Caplan, senior vice president of external affairs for the Assn. of Independent Commercial Producers. “The strike accelerated the trend of global production, so many people have felt the impact of that in Los Angeles and other production centers within the U.S. Commercial production in the Los Angeles area has not fully recovered from the strike.”

Although the union did not receive everything it demanded during the strike, actors did receive a nearly 150% increase in residuals for cable television. Under terms of the deal, actors’ flat fee rose from $1,014 for 1,000 units of cable use to $1,706 the year after and to $2,460 in three years.

DeLorenzo said that although the fee increased, it was offset by the fact that advertisers are being allowed double the usage.

Gary Epp, a SAG vice president who was a key member of the negotiating committee for the union during the commercial negotiations in 2000, disagreed with DeLorenzo’s contention that the strike was solely responsible for the agency’s demise. “The usage is down, but that reflects the current state of the economy. There was a 25% downturn in revenue spending by advertisers in 2001.”

Lawrence also said the strike hurt business because advertisers continued to produce commercials without union actors. Agencies representing those actors couldn’t authorize nonunion shoots. De Lorenzo added that during the strike, advertisers increased their dependence on nonunion actors.

“Prior to the strike, nonunion production in the commercial world was always an aspect of the business. That portion of the commercial industry increased dramatically during the strike because it was the only game in town,” DeLorenzo said. “There was also a dramatic increase in compensation to the nonunion actors. What the Screen Actors Guild did not consider was that there was no law on the books that said that in a non-strike environment, advertisers would not continue to produce nonunion projects. It’s now a learned and larger part of the business.”

The current union contract with the advertising industry expires in October 2003. Though talent agencies represent and negotiate employment for actors, they do not vote on actors’ union contracts. When the actors voted to strike in 2000, it had a ripple effect on their agencies, which also bore the economic brunt of the six-month work stoppage.

Lawrence said that the pending negotiations between the ad industry and the Screen Actors Guild also influenced him to close down the agency’s commercial division. “My other thought in closing the division is that I’m not going to rest my future on a contract in which I have no input,” Lawrence said.

“All the residuals stopped after the strike and never came back. I have been in the business 35 years, and this is a great tragedy. It’s heartbreaking. I’ve worked with these people for a long time, but at some point you have to say, ‘I’m running a business.’ ”

DeLorenzo said he too was saddened by the economic reality of having to shutter his agency. “I have literally put my whole life into this business,” he said. “I feel guilty because I have an opportunity, and I feel bad for my actors because they are left in this arena. The ones I feel particularly bad for are the ones who voted not to strike. I’ve seen people lose their homes. I saw people lose their jobs. I don’t see this industry ever coming back. The damage done by this strike is irreparable.”