With an April 2 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 an insider 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 11th hour. It also gives studios and producers time to rearrange production schedules so they are not caught in the middle of shooting by an actors’ walkout.
But, at least from the actors’ perspective, 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 during a caucus meeting on March 16, according to a transcript.
Such optimism is rare. At the same meeting last week, a labor official said, “By April 2, if there is no deal, all bets are off.”
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 bargaining table Thursday in Encino after a lunch break. “It’s all very complicated.”
While the minutae of the negotiations tends to glaze the eyes of the uninvolved, 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.
SAG and the American Federation of Television & Radio Artists are seeking a number of bold concessions, most of them drastically different than what producers want. Among the actors’ demands are a doubling of the current minimum payments of foreign residuals and 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.
The actors also want an increase in minimum compensation rates, rerun ceilings, money breaks, reimbursement rates, allowances and penalties by 8% per year, effective July 1 this year and covering the next two years.
But producers and management say that, particularly in television, rising costs and a squeeze in license fees are making such demands implausible, if not impossible. Most license fees do not begin to cover the cost 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.
Nicholas Counter, president of the Alliance of Motion Picture & Television Producers, said at a March 12 negotiation session that, while “the state of the industry looks bright, runaway costs could derail some of the most successful studios.”
Counter’s comments were taken from minutes of the meeting 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.”
To make matters worse, he said, “syndication has shrunk in size dramatically,” primarily because so many formerly independent stations have come under the wing of networks like Fox, UPN and WB.
“The number of time slots 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 a 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.”
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 recounted. “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.”
At labor’s March 16 caucus meeting, a negotiating committee member said 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.”