Facing the expiration today of the current contract, the chief negotiator for advertisers is pessimistic that resolution will be reached in talks between union actors and the ad industry.
“We’re two trains on a single track moving very fast toward each other,” said John McGuinn at the Assn. of National Advertisers annual Television Advertising Forum in New York.
McGuinn, taking a brief break from the negotiations, now in their fifth week and expected to resume today, said the two sides are far apart on a several key issues. “I just hope I don’t look as tired as I am,” he added.
The Screen Actors Guild and the American Federation of Television & Radio Artists recently granted their negotiators strike authorization. Neither side has indicated yet if it will be willing to negotiate past the contract expiration at midnight tonight.
McGuinn, senior partner at Schmeltzer Aptaker & Shepard, said residual structures are the primary battleground.
He said advertisers have proposed not paying broadcast network residuals on a per-use basis as broadcast loses ground to cable. The advertisers, represented by the ANA and the American Assn. of Advertising Agencies, have offered a flat rate based on 21 uses, which the unions have resisted.
McGuinn said advertisers want to retain the flat rate for cable use while actors are seeking a per-use structure because they believe cable is on the ascendancy.
McGuinn also noted that unions want to expand jurisdiction worldwide and have sought a 20% wage increase across the board. “There are too many zeros in that for me,” McGuinn said.
The negotiator noted that annual employee payroll for ad work is currently $721 million and said that acceding to union demands would amount to a 25% increase.
McGuinn also pointed out a strike would probably not take place until mid-April because talks would have to collapse and a joint union board would have to approve a work stoppage. He added, however, that a ” ‘quickie’ joint meeting” could take place at any time.”