Studios and Actors Agree on Contract

Negotiators for studios and 135,000 actors agreed late Tuesday on a new film and TV contract, ending one of Hollywood’s longest and most tense periods of labor unrest.

The tentative three-year deal, coming two months after writers settled their contentious negotiations, ends any threat of a devastating strike this summer. It also caps an extraordinary turnaround in Hollywood’s labor fortunes. For the last year, the industry operated as though strikes were inevitable, accelerating scores of productions as a hedge against walkouts.

Negotiations on the final day focused on a variety of issues but chiefly on the payments actors receive when their work is rerun on cable TV.

But the final hurdle was overcome when a solution was found to address studio concerns that the cable arrangement that actors wanted was too pricey.

The package also includes better payments for Fox TV programs, a special $5,000 payment for lower-paid actors in film roles and better pay for middle-income actors who appear as guest stars in TV shows. Films that are shown on fledgling video-on-demand systems will pay actors according to current pay-per-view formulas. Actors will receive a 3% raise in minimum payments for TV work the first two years of the contract and 3.5% the final year.

The agreement with the studios was reached by the Screen Actors Guild and its sister union, the American Federation of Television and Radio Artists, about 9 p.m. at the industry’s Alliance of Motion Picture and Television Producers headquarters in Encino. The deal came after a day of tensions that ebbed and flowed.

When the 26-member negotiating team of actors voted, a roar of jubilation filled the conference room. Some of the actors wept. Others laughed and hugged each other. Cheers continued to ripple among the emotionally drained group.

“People who politically oppose each other in the unions were working cheek by jowl and crying and hugging each other,” said John Connolly, a co-chairman of the actors negotiating group. “This was not some abstract chess game. It was a gut-wrenching game of poker where you had to both feel your passion and control it in order not to give away your hand. The personal feelings of fear and worry and triumph were extraodinary, and they all hit at once when we took that vote.”

Both sides celebrated at a news conference, heaping praise on each other.

“These were very difficult negotiations because of the complexities of our business today,” chief studio negotiator J. Nicholas Counter said.

William Daniels, president of the Screen Actors Guild, was giddy in announcing the deal.

“I’d have to say I’m slap happy with an emphasis on the happy,” Danials said. “Since last October I’ve been telling everybody who would listen there was a deal to be made, and I was right.”

The contract is expected to be ratified by actors. The SAG and AFTRA bargaining committees unanimously recommended the tentative agreements.

At one point, it appeared as though negotiators would fail to meet a self-imposed goal of reaching an agreement before the Fourth of July. Producers were irked by four of the actors’ counterproposals, which they felt went further than what the two sides had previously agreed on, according to a source close to the talks.

But both sides risked losing the momentum that had built for the last 10 days of intensified talks. The agreement comes six weeks after negotiations first began and three days after the contract expired.

Affected are 135,000 actors represented by the SAG and AFTRA .

Journeymen actors, who earn on average $30,000 to $70,000, had been identified by union representatives as the focus of the talks. They mostly play guest roles on television shows and bit parts in movies, and have been struggling because producers are feverishly looking for ways to slash increasing costs.

Payments Increased for Cable Reruns

The final plan on cable television, which puts an additional $3.5 million in the pockets of actors, eliminates the pension and health contributions that are taken out of the checks actors receive when shows are rerun on cable TV. Studios will then contribute an equal amount to the actors’ pension and health fund, which was badly drained last year during the six-month strike by actors against advertisers.

To offset the additional costs for studios, actors agreed to reduced raises in the minimum payments actors get for TV work. For the first two years of the contract, raises will be 3% with 3.5% in the final year. Studios had offered 3.5% raises for all three years.

Other highlights believed to be part of the deal:

* Journeymen working actors will get another boost through increased minimum pay for guest stars on TV shows.

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

* By the third year of the contract, the Fox television network will pay actors the same residual 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 high price. The writers agreed to a similar deal.

* The contract was revised to give lower-paid actors with limited roles in movies an additional $5,000 per picture.

Talks looked as though they would conclude last weekend, but hit a snag when SAG chief negotiator Brian Walton’s role was diminished after he was hours late for a critical day of talks Saturday. Walton had phoned in to say he had been in an automobile accident, but his long delay getting to the talks angered fellow SAG negotiators. From that point on, two other union officials took the lead in the talks.

The first month of negotiations between actors and studios, which began May 15, went slowly, with the parties meeting face to face only sporadically. Talks have intensified in the past two weeks, with both sides honing their proposals and zeroing in on crucial issues.

By Sunday, when both sides were predicting a deal was imminent, there were still 25 issues involving money and working issues left unresolved.

But SAG chief negotiator Walton said talks in the past two days “were more about getting it right than breaking a logjam.”

Walton added that much was accomplished away from the bargaining table when actors and studio representatives met separately in small groups.

“We were not playing pinochle,” Walton said.

A new deal is welcome news for Hollywood, which has been operating under a cloud of strike threats for a year.

“Settling this contract today serves the long-term interests of the talent community, the studios, the networks and the city of Los Angeles,” said Jeffrey Berg, head of talent agency International Creative Management.

Directors Guild of America President Jack Shea predicted a “rapid resumption of new film and television productions.”

Before the Writers Guild of America sealed its three-year $41-million deal with studios on May 4, it was a commonly held belief that the industry could suffer a one-two strike punch by writers and actors.

For the past year, the prospect of dual strikes had consumed Hollywood guilds, studio executives, agents and filmmakers as well as tens of thousands of blue-collar production workers who toil behind the cameras hauling equipment, driving trucks, setting up lighting and making costumes.

Strike Fears Already Have Had an Effect

Anxiety also extended well beyond the studios to companies that supply and service productions, such as equipment rental firms, costume houses and caterers. Also worried were scores of other businesses that depend on entertainment dollars, from restaurants to dry cleaners.

A walkout would have shuttered movie and TV production and, according to a study commissioned by former Los Angeles Mayor Richard Riordan, could have cost the Southern California economy $6.9 billion in lost income and nearly 82,000 jobs.

Even though there were no walkouts, Hollywood was beginning to feel the effects of a de facto strike because studios stopped putting into production any film that carried even the slightest risk of being shut down in the event of a strike. Even with the contract settled, production could take months to return to normal levels because so many projects had been accelerated to beat potential strike deadlines.

Thomas Short, president of the International Alliance of Theatrical Stage Employees, said last week that his members have already been hurt by a “dramatic slowdown” of production because of uncertainty over when the actors and studios would settle. Short said employment in the last month was off by as much as 50% among makeup artists, costumers and hairdressers and 40% by set artists.

For many months, Hollywood agents who peddle scripts and literary properties said strike fears were causing studios to buy fewer projects, but that activity has begun to pick up in the wake of the writers settlement and anticipated actors deal.

Counter said that while the deal is not everything either side wanted, “on the whole it keeps the town working and keeps the economy of Los Angeles and New York, where a lot of production takes place, booming.”