SAG, AFTRA OK walkout

Union strike vote may be H'w'd harbinger

Actors took a major step Tuesday toward Hollywood’s first major strike in more than a decade.

The Screen Actors Guild and the American Federation of Television & Radio Artists granted strike authorization to negotiators in their talks with advertisers with a 93% endorsement. A total of 40,956 members voted, better than 30% of the 135,763 ballots mailed March 7.

The strike authorization vote mirrored the unions’ 1997 tally, which generated a 93.8% endorsement with a 31.6% return rate. The move comes with negotiations in their fifth week and due to resume today in New York City at the Sheraton.

Friday looms

Many observers believe that a combination of factors have heightened the possibility of a strike. And even if actors and advertisers reach an agreement prior to such an action, indica-tions are strong that the town’s relative labor peace during the past decade may soon be over.

In other words, it’s not just the blurb talks that worry Hollywood. The longer-term concern comes from an expectation that the town’s major unions will push hard on three difficult-to-resolve areas: foreign residuals, currently at 35% of initial compensation; basic cable residuals, based on license fees rather than ads or subscriptions; and the explosive Internet sector.

The talks between actors and ad-vertisers, represented by the American Assn. of Advertising Agencies and the Assn. of National Advertisers, could continue past Friday’s expiration of the current three-year pact. Neither side has indicated yet if it’s willing to do so.

The actors last struck 12 years ago for 18 days after the commercials contract expired. In this case, a strike could come as early as mid-April if the negotiations collapse and the SAG and AFTRA national boards authorize a work stoppage.

Toughened stance

Though the prospect of a major strike seems bizarre to some insiders, they’re ignoring two facts of life: Both SAG and the Writers Guild of America elected leaders last year on slates that denounced what they portrayed as lack of aggressiveness by predecessors; and the first guilds up to bat consist largely of unemployed writers and actors, who have a lot less to lose through militancy. (They stand in contrast to the Directors Guild of America, which typically has over 60% of its members working.)

Here is the lineup of upcoming contract expirations:

  • Friday, SAG and AFTRA commercial contract.

  • May 1, 2001, WGA basic contract.

  • July 1, 2001, SAG and AFTRA basic contract.

  • July 1, 2002. Directors Guild of America basic contract.

Even though Tuesday’s SAG-AFTRA authorization was not a surprise, the development is significant in light of tougher unions stances.

“There is a sense of a hardening of positions by the guilds,” said a vet executive. “Studios and producers will sing the standard song — that they can’t afford a cost increase and they are faced with all this uncertainty. That’s not going to play very well.”

Another exec agreed, saying, “The level and volume of rhetoric has been increasing and become more aggressive.”

SAG president William Daniels, speaking Tuesday at a labor rally in downtown Los Angeles, said he was “delighted” by the authorization vote. “Our commercials negotiating team and the joint boards now have the power to call a strike if it becomes absolutely necessary,” he added.

“Despite the public’s perception, the reality for the average SAG mem-bers is that on any given day, 95% of them are unemployed and 80% of our members earn less than $5,000 a year,” Daniels also said. “Even though the cost of paying the actors amounts to less than 2% of the cost of airing a commercial, SAG and AFTRA have been told by the multi-billion-dollar ad industry that professional, union actors and performers are just too expensive.”

Observers note that hard-core economic issues have become increasingly more important than creative rights among those who perform the nuts-and-bolts work in Hollywood. Thou-sands are affected as studios let production deals lapse, transfer work to cheaper locales like Canada and ask below-the-line talent to defer above-scale payment, such as Disney’s strategy in “Pearl Harbor” (Daily Variety, March 22).

With the domestic economy humming, actors have been aggressive in the current commercial talks. The key demands are a 20% hike in base pay and 30% increase for Spanish-language ads, a revamped cable structure to replace the current practice of a buyout with unlimited use of ads, establishment of a producer-funded monitoring system and improved Internet pay.

Advertisers have proposed roll-backs in pay, lifting restrictions on downgrading performers and replacing the “pay per play” provision with a buyout for 13 weeks of unlimited use.

Insiders believe the arguments will be even fiercer in next year’s negotiations as studios inevitably contend that declining market share for broadcast networks requires a cut in those residuals. The guilds will argue that they aren’t receiving a fair share of cable and foreign revenues.

“The foreign and cable deals made sense when they were first made, but they have gone too long without being fixed,” an insider said. “But now you have anger over people getting $1.13 residuals checks.”

The question of Internet revenues will further complicate the outlook since union leaders are likely to believe they must confront the issue in order to retain credibility.

“There’s a potential for a train wreck when you have too many issues on the table,” one observer noted.

As for the current talks, it’s difficult to tell if the actors will walk but it’s worth noting that SAG membership showed last fall they wanted more militant leaders when they voted in a Daniels-led slate. And the new leaders have already shown an unpredictable edge: Last month, they backed away from a landmark deal with agents after high-profile actors expressed reserva-tions about the deal’s potential conflicts of interest.

Internet tussle

The proposed agreement with the Assn. of Talent Agents would have let agents cash in on the Internet boom during a two-year waiver period in exchange for enhanced protections for actors. Agents recently demanded that SAG reopen negotiations on the entire contract, possibly creating profound implications for how agents and managers operate.

Both sets of negotiations come amid a considerably brightened economic picture nationwide — and everyone knows it.

“The unions have given the industry major breaks in cable and distribu-tion for the past decade,” one activist noted. “The argument from the studios has been that cable is still in its infancy. But everyone knows that cable’s now a mature industry.”

Additionally, with corporations scrambling to merge, such as America Online’s blockbuster acquisition of Time Warner, executives will have a difficult time putting forth a convincing case that they are losing their shirts in the movie and TV businesses.

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