SAG strike deadline looming

Glacial pace of talks pummeling union morale

With Thursday’s deadline fast approaching and no agreement between actors and producers in sight, a thespians’ strike is beginning to look almost inevitable, people close to the troubled contract negotiations say.

“As far as we’re concerned, we either have a deal on April 2 or we don’t have a deal (at all),” said one of the sources, whose sympathies lie with management.

Although the Screen Actors Guild’s contract does not expire until June 30, the earlier deadline was set to give all sides a picture of where they stand long before the eleventh hour. It also gives studios and producers time to rearrange production schedules so that they are not caught in mid-shoot by an actors’ walkout.

“We understand there are many mountains to climb before April 2,” Nicholas Counter, president of the Alliance of Motion Picture & Television Producers, said at the March 12 meeting, according to a transcript. “Whether we agree to terms by then is up to us. We remain cautiously optimistic.”

Deadline flexible

From some actors’ perspective, at least, the deadline is not etched in stone.

“I am still looking at April 2 to get it done, but in the event we cannot, we still have three months” to make a deal, a labor staff member said at a March 16 meeting. “Last time, we had 10 days and it was still very successful.”

But such optimism is rare. At the same meeting, a labor official said, “By April 2, if there is no deal, all bets are off.”

“We have to focus on a deal by April 2,” said a staff member, who suggested putting “pressure back on company CEOs.”

Glacial pace

With the threat of a walkout looming, the glacial pace of negotiations is pummeling morale.

“They’re dragging out with no promise of an outcome,” said a participant in the talks, shaking his head in frustration as he returned to the talks Thursday in Encino after a lunch break. “It’s all very complicated.”

While the minutiae of the negotiations tends to glaze the eyes of those not involved, both sides came into the talks with their goals — spelled out in a combined total of 112 proposals — clearly and firmly set, and there appears to have been little ground given.

Bold concessions sought

SAG and the American Federation of Television & Radio Artists are seeking a number of bold concessions from producers. The actors are demanding that cable residuals be paid at the same rate as the networks, a doubling of the current minimum payments of foreign residuals, an ongoing share of revenue from foreign telecasts and replacing the current revenue-based residuals formula for TV programs released to basic cable with a schedule of fixed residual payments. Some have suggested that SAG’s jurisdiction be expanded to the rest of the world, a contentious issue considering the number of productions that go overseas to avoid various unions’ strictures.

The actors also are asking for an increase in minimum rates of compensation, rerun ceilings, money breaks, reimbursement rates, allowances and penalties of 8% per year effective July 1 this year and for the next two years.

Rising costs

But producers and management say that, particularly in television, rising costs and a squeeze in license fees are mak-ing such demands implausible, if not impossible. Most license fees do not begin to cover the costs of production, they say, and the money has to be made up elsewhere. The number of hits in an average year, out of dozens of programs produced, can be counted on one hand.

Counter said at the March 12 negotiation session that, while “the state of the industry looks bright, runaway costs could derail some of the most successful studios.”

His comments were taken from minutes provided to Daily Variety by a source not directly connected to the talks.

“Before 1980, companies were able to recoup their costs in both domestic and foreign. Since 1980 this has not been the case before paying residuals, which is our focus. We should not pay residuals until this has occurred,” he went on, referring to recovery of production costs.

“Advertising revenues were down at NBC, ABC was flat, CBS and Fox were up slightly, but both lost money,” Counter said at the meeting. “CBS, even with a better audience — putting Olympics aside — is fourth in the more desirable younger market.”

Syndication shrinking

To make matters worse, he said, “syndication has shrunk in size dramatically,” primarily because so many formerly inde-pendent stations have come under the wing of networks like Fox, UPN and WB.

“The number of timeslots available for syndication has been drastically reduced,” Counter said. “There are fewer in each market and more talk/gameshows being programmed in the independent stations.”

As a result, he said, “There are fewer opportunities to syndicate our product, therefore greater risk to recoup.”

While overseas revenues are up, Counter continued, “our concern is that the bubble has burst as these distributors want more homegrown foreign-produced product, which gets them higher ratings.”

Actors doing better

At the same time, producers say that actors have been doing much better than they pretend. For instance, in 1987, the first year of big sales to basic cable, SAG members made $383,904 in residuals; last year, they pulled in $10.8 million.

“That’s a combination of more sales to basic cable and an increase in the price being paid for those programs,” said a person familiar with the talks. “We feel that the residual structure as it exists now has allowed for the growth of this area of the industry.”

Below-the-line unions such as IATSE, the source said, are not looking forward to an actors’ strike. “At IA they’re saying they’ve never seen so much production,” he said. “Last year, IA got the highest level ever of contributions to their pension and health fund. They had over 63 million hours reported. It’s a good measure of the level of employment.”

Teamsters, agents ‘panicking’

A labor negotiating committee member said on March 16 that Teamsters and agents are “panicking” at the prospect of a strike.

“They have development deals that they are very concerned about,” the committee member said. “Management has been starting to make us look like the bad guys.”

The actors’ representatives at the meeting were clearly not gunning for a walkout. “I don’t want to see a strike this year because we spent too much time focusing on a strike that we didn’t do our job trying to make a negotiation work,” one said.

“I believe,” said another, “the main thing that needs to be realized is that your members know what they want, what are they willing to strike over as opposed to settling on a package? If there is a package that is turned down and a fight begins, will they be behind the fight or will they be angered because they would rather have taken the package that you turned down?”

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