Biz braces for probable scribe strike

The good old days of Hollywood labor peace are long gone, shattered last year by the longest strike in Hollywood history.

And now, there’s the troubling prospect of much more to come.

The first shot was actually fired in November 1999, when Screen Actors Guild members elected Emmy winner William Daniels, best known for playing Dr. Mark Craig on “St. Elsewhere,” as their president.

Daniels, a union novice, specifically pledged that SAG would take a far more aggressive stand at the bargaining table. It was a campaign promise he kept.

In a few months, Hollywood’s 12-year strike-free honeymoon was over. Backed by a 93% strike authorization and a 150-0 board vote, SAG and the American Federation of Television & Radio Artists struck advertisers on May 1 and stayed out for six months.

And many believe the strike was just a warm-up.

The industry now is facing the very real prospect of back-to-back strikes by the Writers Guild of America on May 1 and by SAG and AFTRA on June 30. As a result, production is booming as studios and networks scramble to stockpile movies and TV shows as insurance against a pair of long, bitter work stoppages.

Strike fever took hold last summer as studios and networks accelerated their greenlighting of projects for 2001. The wisdom of that approach gained credibility as the SAG/AFTRA strike against the ad industry dragged on month after month while the unions staged hundreds of demonstrations.

By the time the strike ended in late October, the actors had given up $300 million in session fees and residuals for a settlement many believe could have been reached long before. On the plus side, they retained the residuals structure for TV ads and gained Internet jurisdiction and sharply higher cable fees.

“The strike was a trying time that tested our members, but we came out of it stronger than ever,” said AFTRA national exec director Greg Hessinger.

Just as important, in an industry where image is paramount, the actors believe they gained a significant amount of respect. SAG and AFTRA were able to elicit support from celebrity members: Tom Hanks, Julia Roberts and Paul Newman appeared at rallies and Nicolas Cage, Harrison Ford, Helen Hunt, Eddie Murphy, Kevin Spacey and Bruce Willis made six-figure donations to a strike relief fund.

Point taken

Despite the financial pain they suffered, many actors believe they achieved a breakthrough.

“The strike showed that SAG and AFTRA had a lot more solidarity than people expected,” said strike activist Marshal Silverman. “It means we’ll be taken more seriously in 2001.”

UCLA management professor Daniel Mitchell said one of the strike’s most notable aspects was SAG and AFTRA’s ability to overcome their image as unions that operate ineffectively. That result, plus eight years of a strong economy, have raised the bar for actors’ expectations in 2001, he added.

“There are now all kinds of indicators that the economy is moving in the wrong direction, and it suggests a background for confrontations because the two sides will have differing perceptions,” Mitchell said.

As for the studio/network side, signals so far have been ominous, with several top execs already admitting that back-to-back strikes — which would allow them to clean house by eliminating unfavorable production deals –will help short-term corporate profits.

Demanding respect

Union officials have insisted they do not want a strike, but also hint they intend to be taken seriously.

“No one is eager for another work stoppage, but I think the producers will go into these negotiations knowing that we’ll stick together if we do strike,” Hessinger said. “That knowledge will give us greater strength at the bargaining table.”

In a move to avert both strikes, the Alliance of Motion Picture & Television Producers asked the WGA, SAG and AFTRA in late October to start early negotiations. The WGA accused the AMPTP of proposing rollbacks on network residuals but then agreed last week to meet — but only for two weeks — starting Jan. 22.

The studio execs responded with an earnest assertion that they did not want a strike, but added that the WGA’s proposals would cost $2.4 billion over three years if adopted for the writers, actors and directors. The WGA fired back, saying the correct three-year figure was $725 million and accusing the AMPTP of hyper-inflating the projections in order to justify not reaching a deal.

SAG and AFTRA held an informal meeting Dec. 4 with network and studio CEOs; the upshot was that they need more time to incorporate residuals data into their contract proposal and would be ready to discuss nonresidual issues first.

The bottom line is that SAG and AFTRA are unlikely to make it to the bargaining table before March, Hessinger noted.

In the meantime, serious warnings have already cropped up.

Economic impact

Jack Kyser, chief economist of the Los Angeles Economic Development Corp., is forecasting a direct economic loss to the local economy of $250 million per week if both strikes occur; the indirect costs would push that to $457 million, or $1.8 billion a month.

“So if the strikes happen, you will see serious political pressure appear to resolve the disputes,” Kyser predicted.

Even if there’s no strike at all, there still will be a “de facto” strike in the form of a spring/summer slowdown this year. Production will decelerate as June 30 approaches; then studios will need several months to burn off excess inventory.

“You’ll be booming for the first three months of 2001, but then talk of a strike becomes self-fulfilling,” Kyser noted.

Further complicating the situation is the fact that SAG has plenty of other unresolved issues to keep it busy.

Its negotiations with talent agents over the basic agreement have stalled, triggering a 15-month expiration period ending in January 2002 that could see all rules eliminated. Agents are seeking a modernization of the pact, including loosened financial-interest rules that would allow indirect investment in and by production companies; SAG has refused, due to the potential conflict of interest.

Former SAG prexy Richard Masur, who had been mostly quiet since Daniels ousted him, recently blasted his successor over his failure to reach an agreement with the agents.

Adding to the uncertainty at SAG is the looming departure of its top three execs, although chief negotiator and associate national exec director John McGuire may stay on in a less time-consuming capacity. Daniels has not indicated if he will run again, which could lead to a bitter election fight starting in the summer; and in a SAG-funded report, Towers Perrin called the union “schizophrenic” and urged a massive reorganization.

SAG also remains tied to AFTRA on actor contracts despite the failed 1999 merger of the two. AFTRA tends to be lower-profile than SAG, partly because it negotiates hundreds of contracts on the broadcast side, but its 70,000 members will bring significant additional clout to SAG’s 98,000 should the actors strike film and TV work.

WGA walkout more likely

Of the two potential strikes, the WGA work stoppage is the more likely. It’s been that way ever since secretary-treasurer Michael Mahern told members last summer to start saving money to ride out a strike.

“Now is not the time to be buying the biggest or the nicest car you can afford,” he said. “If you have a TV staff-writing job, begin putting away money now. If you make a feature deal, bank every penny you can.”

The WGA has already set up a $7 million strike fund for members. And WGA West prexy John Wells, exec producer of “The West Wing” and “ER,” even asked members to avoid taking on extra assignments so as to prevent producers from stockpiling.

Writers not talking

Memories of the hardships brought on by the five-month 1988 strike have apparently faded. Writers showed little interest in the notion of fast-track early talks, which were used in the last three contracts partly to avoid another strike by starting talks as much as a year prior to contract expiration.

Instead, the pervasive feeling among union activists is that the WGA gave away too much leverage at early negotiations and that writers have to achieve economic improvements in areas that have seen major growth. Key demands — approved by an 83% rate by voting members — are that Fox’s residuals rates be increased to match those of ABC, CBS and NBC, and that cable, foreign, video and DVD residuals be upgraded to reflect the revenue booms in those sectors.

Perhaps as important, the union seeks more respect for “creative rights” demands such as mandatory access for writers to sets, casting sessions and premieres and elimination of the possessory (“A Film By…”) credit.

The “creative rights” proposals continue to fan the smoldering animosity between the WGA and the powerful Directors Guild of America. In an attack launched in late November and repeated in early January, the DGA blasted the WGA’s demands as economically irresponsible and called for the two guilds to hammer out a “code of preferred practices” on creative rights issues.

But the DGA, which will not see its film-TV contract expire until June 2002, mostly maintained a low profile. It issued a call for a revamp of the Motion Picture Assn. ratings system; it blasted studios and networks for lack of improvement in the hiring of women and minorities; and it signed a four-year deal with commercial producers that included Internet jurisdiction.

Show of solidarity

In addition, although the gesture received little notice, the DGA gave the SAG/AFTRA strikers free space in its midtown Manhattan offices for six months. The show of union solidarity was worth nearly $100,000.

The Intl. Alliance of Theatrical Stage Employees, which reps more than 100,000 craft employees, also kept a low profile, without work stoppages, and reached a new deal with commercial producers in the fall.

Its president, Thomas Short, told advertising industry negotiators late in the strike that IATSE members would support SAG and AFTRA in every way legally possible.

Short already has expressed deep concern about 2001. In December at a DGA awards gala, Short said in his acceptance speech that SAG and the studio and network CEOs should start negotiations as soon as possible to avoid a strike and “the risk of putting several thousands of people out of work.”

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