Deal or no deal for Guild?

Leaders of the Screen Actors Guild will have to decide this week if they want to make a deal — or keep Hollywood on edge about whether actors will strike this summer.

Both sides have kept a tight lid on news about the negotiations, but it’s understood that minimal progress has been achieved after two weeks of negotiations. Unlike the WGA talks before and during the writers strike, however, the process with SAG has been cordial.

The optimistic view is that SAG will have to start compromising in the next few sessions, since it faces a Friday deadline to reach a deal or face the prospect of rival union AFTRA signing a primetime deal next week that could lead to the guild losing shows to AFTRA. That’s a serious threat given the abysmal relations between the performers unions — which are negotiating separately for the first time in 27 years.

The negative view is that SAG’s leaders may be willing to take that chance in hopes they can pressure the majors into a better deal as the June 30 contract expiration gets closer.

SAG and the majors return to the bargaining table at noon today after taking the weekend off. Previous plans had called for negotiations to continue on Saturday, but SAG and the Alliance of Motion Picture & Television Producers noted that last week’s move to extend the time frame for the talks until the end of this week had alleviated the need for the sides to work through the weekend.

Although the guild hasn’t set a strike authorization vote for the 120,000 SAG members yet, the industry continues to fret about a work stoppage. The majors have remained unwilling to commit to starting new feature productions until a SAG deal is in hand — a situation that some in the biz are calling a de facto strike.

After two weeks, the guild’s been unwilling to back down from two of its initial demands — that the companies increase DVD residuals and offer a shorter period of free usage for promotional purposes for streamed content than the 17- and 24-day windows in the DGA and WGA deals. The majors have insisted they won’t give in to either demand.

It’s widely expected AFTRA would be willing to sign a deal that mirrors the terms of the DGA and WGA deals when it sits down with the AMPTP next week. AFTRA leaders — who tend to be much less assertive than SAG’s — incorporated parts of the DGA-WGA deals when they agreed last month to a new pact for AFTRA’s network code, covering most of the union’s shows outside primetime.

SAG’s board and negotiating committee are controlled by the more aggressive side of the guild, based in Hollywood and repping about 60% of its 120,000 members. Though SAG’s stayed silent about the specifics of its proposals, it’s been making the case to members via three briefings sent last week that it needs a much better deal.

The most recent missive, sent Friday, focused on residuals but offered few specifics as to the guild’s proposal.

“Residuals are critical to an actor’s ability to make a living,” SAG said. “As a deferred payment for the use or reuse of an actor’s work, residuals are paid on a time cycle that allows many actors to receive income on a reliable basis. Residuals accounted for 53% of all pensionable principal earnings for middle-class actors under the TV and theatrical contracts in 2007.”

SAG asserted that changes in industry business models — declining volume of repeats on the major networks, vastly increased Web streaming of primetime fare and the proliferation of unscripted programming — have severely cut into the residuals fees paid to working thesps.

“Getting fair residuals formulas in new media, DVDs and other markets is a priority for the guild,” SAG said in its briefing. “Real earnings are on the decline, with average inflation-adjusted residual earnings decreasing 7% over the last five years. This has contributed to a negative annual growth rate in real aggregate earnings to actors over recent years. So, if it feels like you’re making less, it’s because you are.”

SAG noted that the volume of primetime repeats is down 25.1% in the last two TV seasons, resulting in fewer residual payments to actors; total home entertainment consumer spending is projected to top $31 billion in 2012, up from $23.4 billion in 2007; the DVD market is forecast to remain viable for years to come, partly because of projected growth in the Blu-ray segment; and some series are Web streaming all episodes produced via ad-supported formats.

SAG said it’s asking for “reasonable” residuals for DVD and homevideo, for content made for new media and for traditional film and TV content that is made available via paid downloads, Web streaming and other new-media platforms. It’s also seeking a formula for the burgeoning world of made-for-new-media programs released in traditional media — as NBC experimented with earlier this year in picking up the Marshall Herskovitz-Ed Zwick Web serial “Quarterlife.”

In all, SAG said it was seeking a “sustainable residuals structure that ensures working actors can maintain a middle class income and represents an appropriate share of the value contributed by actors.”

The AMPTP’s only disclosure came last week when it said that there were “significant gaps” between the two sides — with the caveat that it had sought and received approval from AFTRA to extend the SAG talks for another week in hopes of giving the guild the opportunity to make a deal.

SAG has cancelled membership meetings in Hollywood and New York that had been set for Tuesday and Wednesday to update members about the negotiations.

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