SAG, studios -- action!

The entertainment industry is reputed to be recession-proof, but in the current downturn even Hollywood isn't firing on all cylinders. It's still mired in the labor turmoil that began when the Writers Guild of America walked out in November. Although that strike ended in February, the studios have yet to reach agreement with the Screen Actors Guild, whose contract expired in June. That has led studios to delay production on some films that they can't afford to have interrupted by a work stoppage. Veteran crew members complain that there's so little work in the pipeline, they don't know how long they'll be unemployed after their current jobs wrap.

The studios have offered SAG a deal based on the agreements struck with the writers, directors and a smaller actors union. That's not good enough for SAG negotiators, who are seeking higher payments and greater protections in numerous provisions of the contract. Two things are paramount, the leadership says: The studios should be required to hire SAG members for any made-for-Internet programs, and they should have to pay residuals whenever programs are reused in new media. The studios' current proposal would give them far more freedom to cast nonunion talent in made-for-Internet shows, and requires no residuals when those shows are replayed on advertiser-supported websites.

Both sides appear to be dug in. The studios seem comfortable with the situation and aren't willing to declare an impasse in the talks. Yet they've also made it clear that they won't move far from the terms of the deals already negotiated, making SAG's two nonnegotiable demands non-starters. The SAG board, meanwhile, has reiterated its unanimous support for its new-media demands. But the board itself is under attack by members from New York and a dissident slate of candidates seeking to take over in next month's elections, who argue the union's leadership has botched the negotiations.

It's hard to envision this drama ending any time soon. The studios have an understandable desire to keep costs low online, given the uncertainty about business models for video on the Internet. Yet the residuals system is deeply ingrained in Hollywood as a way for actors (and writers and directors) to supplement their irregular paychecks with a piece of the revenue generated -- if any -- by future uses of their work. That system is so dear to actors, SAG's stance on residuals isn't likely to change even if its board comes under the control of the dissidents. The two sides, which haven't had any formal talks since the contract lapsed, should resume bargaining. As pointless as it may seem, it's the best hope for a deal.

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