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Hollywood Producers "Get Tough" With Actors On Contract

Tuesday, 1 Jul 2008 | 12:49 PM ET

Hollywood is looking at another intense third act; the tough guys are pulling out the big guns. The Screen Actors Guild is the last of the entertainment industry's guilds to renegotiate its contract, and let's just say, it's not looking like a fairytale ending.

Last night, just hours before SAG's contract expired, while everyone thought negotiations would drag on for another week, the AMPTP (the producers association) gets bold, and announces it's making its "Last Best Offer." (Doesn't that sound like some sort of Bruce Willis action movie?). They're throwing down the gauntlet, and calling SAG on their bluff. But is AMPTP really saying it won't take no for an answer? We'll see if they're the ones actually bluffing.

What now? SAG leadership will wait to see if AFTRA ratifies or rejects a similar offer. If AFTRA, which includes 44,000 of SAG's roughly 120,000 members, doesn't ratify its offer, SAG is likely to ask for a vote of its members to authorize a strike. If AFTRA accepts the offer, it'll be hard for SAG to do anything other than settle. AFTRA isn't doing any more negotiating, but they are meeting with SAG leadership to explain their 43-page offer, for a Q&A of sorts.

The big studios the AMPTP represents--Sony, Disney, Warner Bros., Paramount (owned by Viacom) , MGM--are taking the stand that they want to put an end to the defacto work stoppage that's paralyzed the entertainment industry. Yesterday I blogged about the fact that while the writers strike quickly shut down TV production while movie productions kept chugging along, the SAG labor conflict has already brought nearly all movie production to a halt). If negotiations stall much longer than a week, we can expect to see TV productions stop as well.

The AMPTP is pointing out just how much they're offering. They're giving a $250 million increase in compensation for guild members and the deal is right in line with what the other guilds got. (There's this implicit question: why should you demand more?). The studios make a dramatic point of how by refusing to settle, SAG is effectively putting the LA economy in a position of losing billions of dollars.

It's not just their members they're hurting. Here's one sentence from SAG's statement: "If our industry shuts down because of the unwillingness of SAG's Hollywood leadership to make a deal, SAG members will lose $2.5 million each and every day in wages. The other guilds and unions would lose $13.5 million each day in wages, and the California economy will be harmed at the rate of $23 million each and every day."

How hard core is this hard line position? We'll see. Industry blogger Nikki Finke points out in her blog that the AMPTP offered the WGA many "final" offers before they actually settled. Her blog also gives a good look at some of the highlights of the AMPTP statement.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.