SAG, AFTRA, studios launch contract talks

Both sides officially exchanged proposals Monday

Without fanfare or ceremony, SAG and AFTRA have launched what are expected to be about two weeks of negotiations with studios and nets over their film-TV contract.

Amid a news blackout, both sides officially exchanged proposals Monday at the headquarters of the Alliance of Motion Picture & Television Producers in Encino without official comment.

Negotiators have scheduled meetings into next week. The current SAG-AFTRA contract is a one-year agreement that expires June 30th.

SAG and AFTRA have not riled up their memberships with demands — a tactic that was used by the Writers Guild of America earlier this year in making the case for higher DVD residuals, jurisdiction over reality TV and higher health contributions. The unions’ leaders have asserted in general terms they will seek improvements in contributions to the health and pension plans, residuals, TV agreements and protections for background and stunt performers as well as seek an increase in DVD residuals.

Studios have insisted they won’t budge on changing the 20-year-old homevideo formula, which allows exclusion of 80% of wholesale revenues from residual calculations. Execs contend the soaring costs of filmmaking and marketing make it reliant on revenues from DVD.

However, a Veronis Suhler Stevenson report estimates that homevideo spending amounted to $33 billion last year, and yet, actors managed to get only some $150 million of that figure in residuals and royalties. Veronis is also forecasting that the DVD jackpot will hit $38 billion this year, and grow again to $51 billion in 2007.

Still, for all that growth, the DGA and WGA achieved no progress on DVD in negotiations this fall, and opted instead for increases of about $60 million each in three-year deals, with about two-thirds of that gain coming in health plan contributions from employers.

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