Canada actors pact gets derailed

New-media residuals clause disturbs H'wood studios

Bargainers for Canadian actors and producers worked Monday to produce a face-saving formula that will allow nervous Hollywood studio CEOs to ratify a new contract for striking Canadian performers.

The latest twist in Canada's first actors strike follows what looked like a done deal Friday suddenly requiring further negotiations to ease Hollywood studios' concerns over landmark new-media residuals for Canadian performers.

"We're working to find a resolution, and we're hopeful that it's doable," read a statement Monday from John Barrack, chief negotiator for the Canadian Film and Television Production Assn., representing major Canadian producers, and Stephen Waddell, chief negotiator for ACTRA, representing 21,000 performers.

Both Waddell and Barrack on Friday afternoon shook hands on what they thought was a new collective agreement for domestic actors (HR 2/16). But a half-hour later in Los Angeles, an alarm was raised when major studio heads were briefed on the terms for a new three-year Independent Production Agreement.

According to sources close to the negotiations, the studio CEOs were adamant that the new agreement's payment formulas for Internet rights should set no precedent for upcoming talks between the studios and its U.S. guilds and unions, starting with the WGA.

Despite that setback, no one expects the Americans to take their marbles and go home.

Barrack and Waddell were working Monday to find a way for the major studios to ratify a new IPA and yet not be boxed in when they hold their own union and guild contract talks in Los Angeles later this year and in 2008.

Their joint ACTRA/CFTPA proposal then will be submitted to Alliance of Motion Picture & Television Producers president Nick Counter for consideration.

When the Canadian bargaining talks left off Friday, ACTRA's actors had secured a 9% wage increase over three years and a 1% increase in retirement benefits in the first year of the new agreement.

What surprised many, however, was the securing of Internet residuals by ACTRA members.

On made-for-new media product, including webisodes and mobisodes, the North American producers agreed to pay Canadian actors their full daily rate for an initial six months use of their performances. After the first six-month period, producers must pay actors 3.6% of gross distribution revenue for continued streaming of their work.

On old media converted to new-media use, including TV shows, ACTRA performers will similarly receive a percentage of distribution revenue, this time from the first dollar.

The new IPA contains a "reopener" provision to allow all sides to revisit new-media residuals after SAG concludes its next agreement. ACTRA intends to use the clause to possibly wrest better Internet terms if SAG gets a better deal.

What concerns the major studios, however, is that they calculate gross distribution revenue differently than the Canadian labor deal stipulates.

The AMPTP's calculation for DVD residuals is heavily discounted, taking 80% of revenue off the table to cover manufacturing and distribution, for example. The ACTRA-CFTPA terms are not discounted at all.

The major Hollywood studios are signators to ACTRA's Independent Production Agreement, along with the Canadian Film and Television Production Assn. and Quebec producers with the Association de producteurs de films et de television du Quebec. All must ratify the new deal.

Canadian producers, who negotiated a new deal on behalf of the studios, insist there's no new Canadian labor deal until all parties ratify a new contract. Waddell insists that he had a deal with the Canadian producers, and now he and Barrack need to iron out remaining differences with the U.S. studios.

Also Monday, an ad-hoc group of Canadian studio operators, equipment suppliers and technicians postponed a planned rally today in Toronto to urge ACTRA and CFTPA to conclude a new IPA deal before further damage is done to Canada's reputation as a production center.

"We've decided to give both parties some room to work out any remaining issues," said Manny Danelon, a Toronto location manager and head of the newly formed Alliance of Film Services and Labour.

Once it has a new IPA deal in hand, the ACTRA leadership will poll its rank and file on a new contract containing a wage increase far exceeding that given to members of the Writers Guild of Canada and the Directors Guild of Canada during their own successful contract talks with the CFTPA in 2006.

At the same time, the Canadian performers union closed only slightly a 32% wage gap between its members and those aligned with SAG — a priority for ACTRA during every IPA round.

Canada's first-ever actors strike also will see no return to work for ACTRA members because production never ceased. Instead, about 200 Canadian producers defied the CFTPA leadership and signed individual deals with ACTRA to spare their film or TV shoots picketing or other labor action.

The producers declared the ACTRA strike illegal and petitioned the courts to help shut it down.

Despite most Canadian producers working through the strike, the ACTRA dispute placed a roadblock in front of Hollywood studios, who shifted their projects to Vancouver or elsewhere rather than risk picket lines or legal wrangling.

Canadian studio operators and equipment suppliers servicing U.S. shoots grew increasingly alarmed in recent weeks at the loss of work from south of the border. That put ACTRA and CFTPA bargainers under intense pressure to reach a settlement or see their respective members suffer for lack of work as the Americans continued to shift production elsewhere.

Studio operators that have seen local U.S. film and TV shoots dry up since ACTRA began its strike urged a quick end to the dispute.

"To lose business because one sector of our industry is at an impasse with another is simply self-destructive. We're now giving our business away," said Ken Ferguson, president of Toronto Film Studios, which is building a studio for effects-heavy Hollywood shoots on the city's waterfront.

Domestic film and TV producers, writers, directors and technicians now will wait to see whether a new IPA deal for ACTRA members clears the way for a rebound in U.S. location shooting.