Blurbs done; majors next?

SAG and AFTRA have come to terms with Madison Avenue — so will that pave the way for SAG to settle its long-running contract impasse with Hollywood’s majors?

The commercials contract talks went down to the wee hours of Wednesday morning, as SAG and AFTRA negotiators reached a tentative three-year deal with the ad industry around 5:30 a.m. ET, 5½ hours after the expiration of the current contract.

For SAG, the deal represents the first agreement reached since its national board ousted Doug Allen as national exec director two months ago, replacing him with John McGuire as chief negotiator and David White as interim national exec director. The looming commercials contract talks were something of a distraction when SAG’s new exec duo sought to settle the feature-primetime contract with the studios in February.

Now that the commercials talks are out of the way, many in the biz hope McGuire and White will be able to get to the finish line with the majors. SAG’s big obstacle with the Alliance of Motion Picture and Television Producers remains the dispute over the expiration date of the contract, which SAG wants to run for two years but the majors insist should run a full three years from the date it’s ratified.

Negotiations with the AMPTP on that pact collapsed on Feb. 19 — although both sides had reached agreement on all issues besides the contract’s expiration date. SAG members have been working under terms of the expired feature-primetime deal for nine months.

SAG’s hardline Membership First has continued to oppose any deal on the primetime-feature contract and will hold a rally today outside the Encino headquarters of the Alliance of Motion Pictures & Television Producers. Guild president Alan Rosenberg and former presidents Ed Asner and Kathleen Nolan are expected to attend.

The commercials contract, by contrast, is expected to gain easy passage from SAG and AFTRA’s 150,000 members given the unanimous endorsement of the unions’ 26-member negotiating committee.

Wednesday’s deal came after five weeks of negotiations at Gotham’s Crowne Plaza Hotel. A news blackout largely prevented the exchange of hostilities and spin in the interim.

The pact, which covers about $900 million in annual blurb work, must be approved by the joint board of the two unions and then ratified by the membership; SAG members account for the lion’s share of blurb earnings.

“It is clear that when SAG members work together, unified and focused on common goals to benefit actors, we really can accomplish many things,” Rosenberg said. “I’m gratified that we were able to reach an agreement with AFTRA and conducted these negotiations together.”

The unions will probably be able to conclude the ratification vote by late April or early May. If ratified, the deal will be retroactive to Wednesday and run through March 31, 2012.

The threat of a SAG-AFTRA strike against the ad industry emerged March 17 with the leak of a draft letter seeking a strike authorization vote from SAG and AFTRA members. But that letter was never sent out to the members.

SAG and AFTRA staged a bitter six-month strike in 2000 against the ad industry, but the tough economic times plus a shift in control of SAG’s national board to a more moderate faction last fall provided strong indications that a strike wasn’t in the offing.

“These are very tough issues for both sides, and both had to give a lot,” said Douglas Wood, the ad industry’s top negotiator, who is a partner at Reed Smith. “The gains that actors received are reasonable and achieved without rancor. We’re hoping to build on that so the industry has a relationship with the unions that’s not adversarial.”

Rosenberg agreed that concessions were made by everyone involved. “The advertising industry displayed a willingness to have labor peace and to make compromises even during these challenging economic times, to keep actors working,” he said.

For the unions, the key gains came in establishment of a payment structure for work made for and moved over to the Internet and other new-media platforms; a 0.5% increase in the employer contribution rate to the unions’ pension and health plans, bringing the total contribution rate to 15.3%; and maintaining the current method of pay-per-play payment for ads run on network (also known as the “Class A” payment structure). The ad biz had hoped to shift the payment to a formula based on ratings for blurbs rather than plays.

As for the ad biz, it managed to hold down annual salary gains to about 2%, or 5.1% for the life of the pact, significantly below the 3% and 3.5% gains in Hollywood union contracts last year, and it won a first-ever cap on employer contributions to pension and health.

The ad industry initially demanded an annual $250,000 cap on earnings per performer per contract for pension and health contributions. Instead, the sides settled on an annual $1 million cap on earnings starting in 2012. And in a key development, the contract also calls for the unions and producers to commission a two-year pilot study by a consultant to test a revamp of compensation based on ratings rather than the current pay-per-play model.

In addition, the new pact provides a measure of security for Madison Avenue on negotations for the next contract. The study will begin April 15, with the unions obligated to start bargaining on the results by October 2011 — six months prior to the expiration.

SAG and AFTRA said the first year of the deal contains more than $36 million in wages and other payments; $21 million in increased pension and health fund contributions; and, for move-over and made-for ads for the Internet and new media, 1.3 times the minimum session fee for eight weeks of use and 3.5 times the minimum session fee for one year’s use.

The number of covered jobs for extras rose from 40 to 45, and the deal establishes an $8 round-trip mileage fee for extras, new exclusivity provisions for made-for-cable-only commercials, and increased foreign-use payments for Spanish-language work.

“The AFTRA and SAG commercials contracts provide our members with the solid foundation they need to sustain their careers and families,” said AFTRA prexy Roberta Reardon in a statement. “In this round of negotiations, during the worst economic crisis since the Great Depression, we successfully improved wages and expanded benefits to keep our members working now and in the future.”

Sue-Anne Morrow, who chaired SAG’s part of the negotiating committee, said the new contract’s greatest achievement lies in protecting Class A residuals payments. “By securing a joint study to research and develop a workable compensation model, our negotiating committee protected every member who works under these contracts across the country,” she added.

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