SAG, studios take the weekend off

Break suggests sides may be making progress

With Hollywood still fretting about a possible actors strike, SAG and the majors have recessed for the weekend after two weeks of negotiations on a new feature-primetime contract.

The 10th days of talks concluded late Friday afternoon at the headquarters of the Alliance of Motion Picture and Television Producers in Encino and will resume Monday at noon.

In a sign that the sides may be achieving some progress, the two sides opted to take the weekend off. Previous plans had called for negotiations to continue on Saturday, but SAG and the AMPTP noted that the decision earlier this week to extend the time frame for the talks by one week had allievated the need for the sides to work through the weekend.

Despite the town’s worries that a strike could follow when SAG’s current contract runs out on June 30, both sides continued to opt for an unofficial news blackout with little indication of whether they’re moving towards a deal. The guild hasn’t set a strike authorization vote for the 120,000 SAG members yet, but the industry remains concerned about a work stoppage. For weeks the majors have been 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.

The key issue remains whether SAG’s willing 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 to either demand.

SAG sent out a negotiations briefing to members Friday – its third this week – that focused on the issue of 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 — has severally cut into the residuals fees paid to working thesps.

“Getting fair residuals formulas in new media, DVD’s and other markets is a priority for the guild,” SAG’s briefing said. “Real earnings are on the decline with average inflation-adjusted residual earnings decreasing 7% over the last 5 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 are down 25.1% 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 streaming all episodes produced on ad-supported formats.

SAG said it’s asking for “reasonable” residuals for DVD and home video, 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.”

As for the AMPTP, its only disclosure came on Wednesday when it said that there were “significant gaps” between the two sides but added that it had sought and received approval from AFTRA to extend the SAG talks for another week. AMPTP had been skedded to begin its primetime negotiations with SAG’s rival union on Monday.

SAG and the AMPTP now face a deadline of May 2 to complete their talks. The AMPTP’s talks with AFTRA are now set to start on May 5.

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