Finally, resolution in the Hollywood standoff that dominated the industry for the past year.
It's been a long 10 months since the Screen Actors Guild'scontract with the major studios, the AMPTP, expired. But the long battle certainly didn't guarantee a victory. The proposed contract that SAG's board voted to approve Sunday is pretty darn similar to the deal the AMPTP offered nearly a year ago.
Looking back at the year of negotiations and stalemates, everybody lost, literally.
Hundreds of millions of dollars of economic activity were lost. SAG never voted to approve a strike, but the labor uncertainty created a defacto work stoppage. Studios were understandably wary of starting shooting big-budget films if stars could walk off set, so production slowed to a trickle. Now, finally, SAG's 120,000 members will vote to approve the deal. It's expected to pass, though not by a landslide, by the end of next month.
SAG's biggest victory is the length of the contract, two years, rather than the three-year deal the studios had been pushing for. With this two year deal SAG's contract will expire at the same time as the Writers Guild's deal, putting them in a strong position to negotiate together for greater leverage against the studios. That's important enough to SAG that they gave up tens of millions of dollars of other gains. The actors got pretty much the same deal the studios offered a year ago: a 3 percent wage increase in the first year, 3.5 percent in the second year, and a .5 percent pension and healthcare increase. Plus payments for shows streamed online and websites were spelled out.
The movie studios won a $67 million dollar victory, they don't have to compensate the actors retroactively for that amount of gains from the past ten months. The recession really helped the studios out, allowing them to cite the economic downturn, saying SAG's demands for gains were unreasonable. Without the economic excuse it seems the studios would have had to cave on more issues. And between the recession and the looming labor issues, the studios used this as an opportunity to consolidate and cut back.
- What's Happening In Hollywood:
Biggest Money Makers- Celebrity Foreclosures
- Best-Selling Adult DVDs
Isn't a 3 percent wage increase pretty good, considering the recession? Sure, but we have to keep in mind how the production business has changed. This year the networks are producing fewer scripted shows, and more reality fare, which is cheaper and requires fewer union workers. And the studios are scaling back the number of films they're making. The actors may have put themselves in a position to win much better gains in two years. But around them the industry is changing, and nobody knows if new digital revenues can compensate for declines elsewhere, like DVDs. We'll see if the business of webisodes and online streaming is significant enough in a few years to be worth the battle.
Questions? Comments? MediaMoney@cnbc.com
