Deadline looms for producers, unions

Could Hollywood be facing its first-ever videogamer strike?

The Screen Actors Guild and AFTRA are in a critical, final stretch of negotiations with a group of major vidgame publishers, all of which have come to rely on union talent for increasingly cinematic — and lucrative — vidgames.

The last contract covered Electronic Arts, some 70 other big gaming companies agreed to its terms.

Present contract, currently in its second extension, is set to expire on Friday, and there will not be a third extension, setting the stage for a potential work stoppage. Complicating matters: Unlike the film and TV companies, which have a long history of collective bargaining and an org that represents them, vidgamers are relatively disorganized and new to the idea of bargaining with labor.

“It’s 50/50 right now,” said an insider. “It really could go either way.”

Whatever the outcome, the current vidgame negotiations mirror SAG’s negotiations to secure a new contract with film and TV producers: Besides wages and pension and health, residuals are prominently featured on the list of demands.

Only a few months ago, SAG and AFTRA hammered out a new film and TV contract that included modest gains in wages and pension and health contributions but no increase in the decades-old residuals formula for DVD and homevideo.

In addition, SAG’s national board is split between those who espouse moderation and those who advocate a more aggressive approach to negotiations, with the moderate side having the upper hand by a small margin.

But with vidgame giants, SAG may be facing an even grimmer battle. The current contract has no provision for any residuals, just a set of minimum pay rates.

Even that was a major concession for vidgame manufacturers, which are accustomed to having their creative talent — developers — work inhouse as employees.

An equally important stumbling block has been simple disorganization. There is no equivalent to the Assn. of Motion Picture & Television Producers in the vidgame industry. Instead, SAG has had to negotiate with a small group of publishers who came together on an ad hoc basis and don’t represent the whole industry.

A representative for the publishers who spoke on background wouldn’t reveal which publishers are involved or what terms they are seeking.

The CEO of one midsize publisher reached Wednesday wasn’t even aware that SAG negotiations were ongoing. But he seemed nonplussed by the possibility of a strike, noting that most of the voice talent his company uses is not union.

A strike would most affect the industry with regard to the use of big names. From Clint Eastwood to Vin Diesel to Heather Graham and even Marlon Brando in EA’s “Godfather” adaptation, A-list talent is turning from a rarity to a must-have in the vidgame world.

SAG is increasingly hungry for residuals to be part of a mix, because when a game hits, it can hit big — bigger than the heftiest studio blockbuster, in some cases.

Microsoft’s “Halo 2″ and Rockstar’s “Grand Theft Auto: San Andreas,” last year’s biggest titles, generated sales of over $250 million each.

Even more worrisome to SAG, some vidgame companies have begun to behave less like publishers and more like movie studios and networks. And movie and TV studios have, in turn, become increasingly interested in releasing their products via emerging technologies, like cell phones, complicating how performers get paid.

Microsoft has decided to try and turn “Halo 2″ into a film — without the help of a film studio.

In a first-of-its-kind deal, Microsoft retained the services of ex-Columbia Pictures topper Peter Schlessel, who in turn helped broker a deal with CAA to bring “28 Days Later” scribe Alex Garland aboard to create a screenplay for the property. Deal was made without the benefit of a studio overseeing development.

“Grand Theft Auto” publisher Rockstar is also believed to be looking to hire a screenwriter to adapt its hit game.

Such deals — and their unique financial upsides — reflect uncharted territory for both SAG and vidgame companies.

“Electronic Arts did close to $3 billion last year,” said one Big Five agency tenpercenter who specializes in vidgame deals. “They could finance a film independently if they wanted to, but boy, are they totally different animals.”

(Dave McNary contributed to this report.)

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