SAG Heading Toward Strike Authorization

Industry negotiators questioned Monday why SAG was unwilling to accept a new basic cable contract that would raise their residuals to the same rate as the WGA and DGA.

The comments by Nick Counter, president of the Alliance of Motion Picture & Television Producers, came only hours before SAG members in San Francisco, Miami and Chicago took a strike-authorization vote. A similar vote in New York on Wednesday and a final one in Los Angeles on Sunday also will determine whether union leaders have permission to call a strike, giving them leverage in negotiations.

Counter said AMPTP, which was not involved in the talks until the prospect of a strike arose, was surprised SAG sought strike authorization instead of responding to the latest offer. The producers insist the offer is richer than it seems because SAG already gets higher initial compensation than the WGA or DGA, whose basic cable compensation is "discounted" by about 30% from their network television rates.

"We were attempting to schedule another day (of bargaining), and they went to get a strike vote," Counter said. "We were quite surprised given what was offered to SAG. We brought them up to parity with writers and directors and don't understand why we don't have a deal."

SAG officials said the answer is simple: The contract has not been renegotiated in 16 years, and what is on the table is unacceptable. Actors' minimum rates have risen 35% in that time period, while the cable industry has grown by nearly 500%, according to the union.

Union leaders said they gave the industry notice of their intention to seek a strike authorization and made it clear that it was a bargaining tool and not a declaration of intent. SAG officials also were frustrated that details of the negotiations have been made public and hoped that Counter's comments would not escalate the rhetoric.

The strike authorization, which does not commit the union to a work stoppage, requires the support of at least 75% of those who vote.

Actors' cable residuals are paid by a tiered formula, starting with 12% of initial compensation for the first rerun and descending to 1% for the 13th and all subsequent runs.

The industry has offered to immediately raise the initial residual to 17%, the same rate in the WGA and DGA contracts. While the payments would continue to diminish with each subsequent rerun, Counter said actors would enjoy an overall residual hike of 14%.

"The 14% increase touted by the industry may sound impressive until one realizes, for example, that it's less than a $5 raise per run for a day performer who must find a way to support their family and qualify for health insurance each year based on those earnings," SAG officials said in a statement Monday. "The members of the Screen Actors Guild entered these negotiations in good faith and with a sincere desire to reach an equitable agreement with producers. That remains both our hope and goal, so we look forward to resuming these negotiations in good faith following our member caucuses."

SAG is separately negotiating a cable animation contract that appears to be far closer to resolution than the basic cable deal. Both contracts expired Feb. 28.

SAG is negotiating the basic cable contract with representatives of about 10 shows, including "The Shield" on FX, "Monk" on USA Network and "The Closer" on TNT. The contract is expected to provide a template for other basic cable live-action series.

The current offer to SAG is not necessarily the final offer, but industry negotiators appear reluctant to sweeten the deal since they consider it a fair one.

In announcing the strike-authorization votes, SAG told its members that "the producers' last offer does not reflect the extraordinary growth of the cable industry" (HR 3/16).

Raising residuals has been SAG's top goal in these talks.

The basic cable contract dates to 1986, when SAG and Paramount reached an agreement over the series "Sanchez of Bel Air." While the scope of the contract has been expanded to cover other series, its basic terms have essentially remained the same since the inception.

The union also believes that it deserves higher residuals because the cable industry has enjoyed a 16.7% compound annual growth rate, from $2.5 billion in 1994 to $13.5 billion last year.

Jesse Hiestand writes for The Hollywood Reporter.

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