Studios break off talks with eleventh-hour proposal as SAG contract expires

Hollywood studios and networks broke off talks with SAG on Monday, issuing what it termed a "last, best and final offer."

The Alliance of Motion Picture & Television Producers' 42-page offer, coming just six hours before the guild's contract expired, puts the ball squarely in SAG's court. The studios said they are done bargaining and will accept no new proposals from SAG, but they will meet with guild reps at 2 p.m. Wednesday to answer questions about the offer.

SAG said it will examine the AMPTP offer today.

"Our industry is now in a de facto strike, with film production virtually shut down and television production now seriously threatened," the AMPTP said. "In an effort to put everyone back to work, the AMPTP today presented SAG our final offer — a comprehensive proposal worth more than $250 million in additional compensation to SAG members, with significant economic gains and groundbreaking new-media rights for all performers."

The AMPTP also said that if SAG doesn't make a deal, SAG members will lose $2.5 million each day in wages while other guilds and unions will lose $13.5 million each day and the California economy will be harmed at the rate of $23 million a day.

The offer mirrors those accepted this year by the DGA, WGA and AFTRA in its Network Code. The smaller actors union's membership is now voting to ratify its primetime TV contract. The studios said the SAG offer goes beyond those pacts in that it is "tailored" to SAG's demands, with a new-media framework for feature films and "significant gains" for working actors.

In response, SAG's chief negotiator and national executive director Doug Allen said: "This offer does not appear to address some key issues important to actors. For example, the impact of forgoing residuals for all made-for-new-media productions is incalculable and would mean the beginning of the end of residuals."

SAG did not request a contract extension, and the pact's expiration limits the union's options. It can tentatively accept the studios' offer and send it to its membership for ratification, continue working under the current contract or go on strike. SAG leadership repeatedly has said that it has taken no steps toward a strike authorization vote. It would require a 75% approval and take at least two weeks to complete the process.

The studios also could impose the terms of their final offer, let the actors continue working under their current terms or lock out the employees. The last step seems unlikely, since the studios already have ratcheted production down to a handful of films now shooting and the networks have taken similar steps to protect themselves.

In theory, the studios could sweeten their "final offer," but the guild will be hard-pressed to bring the pressure required to induce such a move with its contract expired.

SAG told its members to "continue to report to work and to audition for new work past the expiration date until further notice from the guild. Such work will be covered under the terms of the expired television and theatrical agreements."

SAG and the AMPTP have been locked in negotiations since April over the union's TV/theatrical contract. The process has been slowed, according to the AMPTP, because of SAG's focus on voting down AFTRA's primetime/TV contract. The results of that AFTRA vote will be revealed July 8.

SAG has said that AFTRA's deal falls short in gains it believes it can get, including an increase in DVD residuals and a bump in minimums for actors.

Monday's AMPTP offer includes a 10% wage increase over three years. As with the AFTRA contract, the AMPTP has offered SAG jurisdiction and residuals for derivative and original made-for-new-media programs and doubled the residuals rates for permanent downloads. However, as it has in previous negotiations, the AMPTP did not offer any increase in DVD residuals.

In the hot-button issue of the use of clips online, the AMPTP offered the same as it did to AFTRA, preserving the actors' consent over nonpromotional uses of clips in new media and a "sunset clause" allowing future negotiations in new media.

The "final offer," coming on the 42nd day of talks, seems a signal that the studios have lost patience with the pace of the current talks and have dug in on the terms.

"Through this statement the AMPTP is making it very clear that this is it, they're done," said entertainment labor attorney Scott Witlin of Los Angeles' Akin Gump. "This is an incredibly comprehensive, detailed public statement about everything they have offered SAG. Throughout their negotiations with other unions, they have kept their mouth shut until the deal is done." (partialdiff)