Having ironed out a pair of key stumbling blocks-Internet jurisdiction and recompense for usage of commercials on cable-the actors unions and the ad industry reached a tentative agreement this week (10/22) on a three-year contract. Once ratified by the membership of the Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA), the deal would end the nearly six-month-old actors strike, which has earned the dubious distinction of becoming the longest in Hollywood entertainment history.
The contract terms were finalized over four days of negotiations (10/19-22) in New York, after federal mediators called the two sides together for the fourth time since the strike began on May 1. At press time, ratification of the contract by SAG and AFTRA members was considered a virtual fait accompli.
The Joint Policy Committee (JPC)-which represents the Association of National Advertisers and the American Association of Advertising Agencies at the bargaining table-agreed to grant SAG and AFTRA jurisdiction over commercials made for the Internet. Though no pay rates were negotiated for an actors performance in an original spot on the Web, SAG and AFTRA leaders gained what they deemed as pivotal-an industry commitment that ads made exclusively for the Internet would include union actors. Compensation for original Internet spots will be determined in the meantime via individual bargaining between the ad industry and union performers, according to SAG chief negotiator John McGuire.
SAG and AFTRA view the Internet sector as eventually playing a prevalent role in advertising. When the JPC earlier refused to recognize the unions jurisdiction over original ads for the Web, many referred to the issue as the deal-breaker that caused talks last month to end without a settlement. At that time, the JPC would only acknowledge union jurisdiction over broadcast commercials that later also appeared on the Internet.
The September negotiations also broke off due to disagreement over cable recompense. The unions backed off their initial demand for extending a Class A Network pay-for-play residuals system to spot usage on cable. But they remained firm that a significant increase in cable payment would have to be part of any deal. According to the unions, in the third year of the contract, the cable payment for a 13-week cycle ($2,460) is about 140 percent more than the current rate.
The September talks nonetheless laid the groundwork for the tentative agreement arrived at nearly a month later. During the September negotiations, both sides offered movement in their positions toward a compromise. For instance, the unions no longer insisted on pay-for-play in cable, while the JPC relinquished its demand that a flat-fee system replace pay-for-play for mainstream Class A Network commercial usage.
Once the actors are back to work-which could happen as early as this week, depending on the union boards and the ratification timetable-a long-overdue healing process could begin for U.S. crew members, as well as for industry support service and supplier companies that were adversely impacted by strike-fueled runaway production.
During the strike, American spot shooting increased significantly in Canada and overseas. And theres a fear that some of that business might never fully return stateside. A number of advertisers have had favorable experiences-both creatively and in terms of cost savings-filming in foreign countries during the strike. While many of those advertisers will come back to the U.S. once the strike is formally settled, others have come to realize that they have a viable, attractive option in such countries as Canada, Australia, South Africa and the Czech Republic. And increased runaway production will only serve to improve the production infrastructure of foreign countries.
Estimates are that plummeting spot production during the actors strike has cost Los Angeles approximately $1.5 million a day, while the impact on New York has been pegged at some $500,000 daily. And union actors have reportedly lost some $200 million in wages during that time. Given these staggering figures and the prospect for the strike having contributed to perhaps sustained runaway production, many question why it took so long to get an agreement-particularly one which contains terms that certainly seemed reachable months ago.
Matt Miller, president of the Association of Independent Commercial Producers (AICP), said, "Thank God," to news of the contract. "Let the healing begin. Obviously, everyones happy that a settlement was reached." Miller noted that the industry and the unions, though, will have to address the runaway issue. "Our focus was on that even before the strike, which, unfortunately, served as a catalyst that accelerated the problem."
Miller confirmed that many AICP associate member supplier and service companies in Los Angeles were hit hard by the strike. He said that New York associate member suppliers, though, fared a bit better, noting that the threat of a motion picture and TV strike next year generated some additional episodic and feature work for the Manhattan community. But even if an actors strike against longform is averted, levels of that business should taper off next year given all the work thats been done in advance.
Several agency producers have begun speculating that if a feature/TV strike comes to pass next year, longform talent will suddenly become more readily available than ever for commercials. "Ive already gotten quite a few feelers from agents about their longform clients-directors, DPs, performers and so on-getting involved in commercials," related a West Coast ad agency head of production, who requested anonymity.
