It’s hardball time for the TV commercial industry, and perhaps the rest of Hollywood.
A team of officials from the Screen Actors Guild and American Federation of Television & Radio Artists will face off this week against negotiators from the advertising industry at a midtown Manhattan hotel to hammer out a new contract that affects thousands of commercial performers around the country.
Among the tough issues under consideration:
– Actors are demanding a 20 percent increase in their base pay for work in TV commercials, including Spanish-language ads.
– On the cable front, actors want an end to flat buyouts that allow unlimited use of commercials in which they appear. Replacing them would be a per-play payment similar to the one that currently exists for network TV commercials something that could significantly increase costs to advertisers.
– For overseas commercials, actors also want increased up-front and residual payments.
– For Internet ads, unions insist on establishing guidelines and fees for performers. They also want residuals for TV blurbs replayed on the Web, which is still in its infancy and has not matured as a business.
Not only is the advertising industry refusing to accede to these demands, it’s seeking to decrease the current up-front payments to actors and do away with network TV’s “pay-per-play” structure, replacing it with a flat fee for 13 weeks of airing.
At this point, there appears to be no easy resolution to the complex issues. “We are probably in for a pretty rough two or three years,” said Jerry Isenberg, chairman of the Caucus of Writers, Producers and Directors. “We will be very lucky if we avoid a strike.”
Sign of things to come
One of the few things that both sides have already agreed upon is a temporary extension of the current pact, which expired March 31. The unions, which represent 185,000 actors, have scheduled a position meeting in Los Angeles on April 18, when negotiations will be discussed as a possible prelude to calling a strike.
Although the current agenda for the theatrical unions is narrowed to commercials, many issues now on the table are expected to surface again when actors, screenwriters and directors begin negotiations with Hollywood studios and TV networks during the next two years. The outcome of the deliberations on commercials will be studied carefully by the rest of the entertainment industry.
Isenberg, a professor at the USC School of Cinema-Television and a former TV producer, said the industry-wide issues have been created by dramatic changes in technology like the Internet and cable, and the consolidation of global media companies.
“You’ve had these large technological and executive shifts, and the old patterns have to be re-thought,” he said. “Any agreement made in the 1990s is completely out of date in 2000. You are dealing with a different can of worms, and when that happens there is inevitable conflict.”
A spokesman for SAG agreed that the entertainment industry has undergone a sea change, and it’s time for actors and other craft guilds to revise economic formulas that no longer apply.
“Technology and consolidations have changed production and distribution,” a SAG spokesman said. “We need to make changes to be viable and to be a part of new revenue streams.”
The battle between the actors and the advertisers also comes at a time when Hollywood unions are bemoaning the loss of jobs to Canada and other foreign countries. In addition, studios have begun forcing below-the-line talent to work for scale on big-budget films (like Walt Disney Co.’s “Pearl Harbor”) in exchange for deferred compensation that will materialize only if the film turns a profit something that seldom happens under Hollywood’s arcane accounting systems.
To meet these challenges, both the Writers Guild of America and the Screen Actors Guild voted in new slates of officers who denounced their predecessors for lacking the aggressiveness to fight such changes.
Last month, SAG and AFTRA members authorized a strike if the two parties in the commercial talks fail to reach an agreement. The actors last struck 12 years ago for 18 days.
“It’s not going to be easy,” said Dick Moore, a spokesman for AFTRA. “And that’s an understatement. There are many difficult issues to resolve.”
Words from the sponsor
Ira Shepard, a spokesman for the Joint Policy Committee of the Association of National Advertisers and the American Association of Advertising Agencies, characterized talks on commercial contract as “businesslike,” with “both sides seeking ways of finding a common ground.”
But SAG President William Daniels, who was elected for his militancy, sounded much more bellicose during a rally late last month.
“Despite the public’s perception, the reality for the average SAG members is that on any given day, 95 percent of them are unemployed and 80 percent of our members earn less than $5,000 a year,” Daniels said. “Even though the cost of paying actors amounts to less than 2 percent of the cost of airing a commercial, SAG and AFTRA have been told by the multimillion-dollar ad industry that professional, union actors are just too expensive.”
Daniels declined a request for an interview, but SAG has been using its Web site to update its membership on developments in the negotiations. Daniels also used the Internet in his election campaign, and it appears he is aggressively using it in his battle with the ad industry.
On the other side, the Association of National Advertisers used its site to alert its membership to a possible job action by the actors.
“This new leadership, by its own admission, is more militant than the prior leadership and, during the election campaign, directed particular ire at the terms of the 1997 commercial agreement on residuals for performers in cable commercials,” the ANA site warned.
Actors are well paid, “and the 1997 increase in cable residuals was particularly generous,” according to the site.
The ad group cautioned that there could be a strike, and advertisers should be prepared to take precautions in the event of a walkout.