This article was updated at 11:59 p.m.
Faced with rock-hard resistance from studios and nets on changing the two-decade-old DVD formula, Hollywood’s actors unions have opted instead for a three-year deal worth an estimated $200 million in increases.
The tentative pact, reached late Thursday, was endorsed by a badly split SAG-AFTRA negotiating committee on a 17-9 vote – foreshadowing a possible fight over ratification of the deal.
SAG and AFTRA had been expected to make such a deal without DVD gains since the Directors Guild of America and the Writers Guild of America agreed this fall to contracts worth about $60 million each in increased money without a hike in the formula for DVD residuals.
The DVD formula allows studios to exclude 80% of wholesale revenues. Studios have insisted that soaring costs of filmmaking have made it impossible to increase DVD payouts because they need the revenues from the disc to remain financial viable.
SAG prexy Melissa Gilbert asserted that the unions had made a strong effort to change the DVD formula and insisted – as DGA president Mcihael Apted had last fall – that it would take a strike to make the studios and networks budge on the issue.
“We met the expected obstinacy from producers on DVDs and fought the issue until the very end,” she said. “But it would be neither wise nor responsible to pursue our only alternative – shutting the town down – and risk losing the historic gains we achieved.”
Writers and directors usually get about nickel residual each from each $15 DVD, while actors split up about 15 cents per disc. But AFTRA president John Connolly noted that actors have gained 54% from DVD residuals over the past three years – a gain that’s due to soaring revenues estimated now at about $25 billion annually.
“It would be irresponsible to force working actors to put their careers and families on the line through a work stoppage when we were able to negotiate a deal that makes so much sense for so many worknig performers,” he added. “We just picked up $200 million without a strikle. That’s a victory.”
Gilbert also launched a pre-emptive blast at opponents of the deal, asserting they were “wrong” in claiming that the unions did not fight to the end. And she took a shot at the bitter 2000 strike against advertisers, which lasted six months and saw large gains in the fees paid for ads on cable.
“Just a few years after a strike over the commecials contract, their approach would bring working actors to the brink of another work stoppage and recklessly gamble with the careers and lives of our working members,” she added.
The actors unions also agreed – as the DGA and WGA had – to a concession allowing networks to run the first three episodes of a new series within 60 days of its launch without residuals for series regulars, though guest stars and day players will continue to be fully compensated for residuals. The idea of the Guilds’ concession is aimed at promoted scripted dramas and sitcoms over reality TV – which are almost entirely not under union jurisdiction.
SAG and AFTRA said that the deal contains the richest increase in the history of both unions. Proposed pact includes gains across the board and for every category of performer, with the most significant advances coming for performers working at scale.
In addition to a 9% across-the-board minimum pay raise over three years, proposed deal includes $60 million in increased producer contributions to health and pension plans via a 1% hike to 14.5% of compensation.
The unions also asserted the deal protects residuals for WB and UPN actors on one-hour shows, includes a 25% increase in residuals for made-for-pay-TV programs and puts in place the framework of a system to provide ongoing health coverage for series regulars even after shows are canceled. It also includes higher wages and better safeguards for stunt coordinators; greater protections for dancers and new health and pension coverage for choreographers.
The tentative deal will be considered for approval by the SAG/AFTRA joint board Jan. 29. If approved, it will then be sent out for ratification.
The current SAG-AFTRA pact expires June 30.