Analysis: Producers' DVD hot streak intact

LOS ANGELES, Jan. 21 (UPI) -- Actors and producers have agreed on a three-year contract, one that contains no changes in the decades-old formula for distributing revenues from home-video sales and rentals -- and gives producers a clean sweep on that issue in the most recent round of bargaining with the major Hollywood entertainment unions.

The Screen Actors Guild and the American Federation of Television and Radio Artists announced a deal late Thursday that provides a 9-percent across-the-board pay raise for actors over three years, and the largest ever contribution to the unions' health and pension plans by the Association of Motion Picture and Television Producers.

Union officials said the deal is worth $200 million for film and TV actors -- including series regulars, background actors, stunt performers, dancers and choreographers. The contract also increases residual payments for made-for-pay TV programs and lays groundwork for a new system to provide uninterrupted health coverage for series regulars after shows are canceled.

The actors unions also agreed to join the Directors Guild of America and the Writers Guild of America in a campaign to counter the proliferation of reality shows on network TV.

SAG President Melissa Gilbert called the new contract the most lucrative deal in the history of actor-producer collective bargaining, but she acknowledged that union negotiators came away from the table with one of their top priorities unfulfilled -- a larger slice of the DVD-revenue pie.

"We met the expected obstinacy from producers on DVDs and fought the issue until the very end," she said. "But it would be neither wise nor responsible to pursue our only alternative -- shutting the town down -- and risk losing the historic gains we achieved."

AFTRA president John Connolly also said that negotiators were unwilling to call a strike over the DVD issue.

"Under the current formula, DVD revenues to working actors were up 54 percent just over the last three years that have been reported," he said. "It would be irresponsible to force working actors to put their careers and families on the line through a work stoppage when we were able to negotiate a deal that makes sense for so many working performers."

The language used by Gilbert and Connolly sounded a lot like that used by officials of the DGA and the WGA after they reached agreement with the AMPTP on new contracts that also left the DVD-revenue distribution formula untouched.

After the DGA announced its deal last September, DGA President Michael Apted said guild negotiators decided to let up on demands for a greater share of DVD revenues.

"After careful consideration and intensive research, our view is that this is the wrong issue at the wrong time for our guild," said Apted. "The reality is that our members are earning unprecedented residuals."

The DGA said residual payments for guild directors had grown from $36 million in 1984 to $225 million in 2003 -- and home-video residuals increased 54 percent between 2000 and 2003.

"When we looked further, we saw a residual system that paid our members without regard to the performance of their films," said Apted. "Directors have continued to receive substantial residuals payments whether or not their pictures are profitable."

Much as the DGA had, the WGA managed to secure a pay raise and significant contributions to its health and pension funds -- but also failed to gain any ground on DVD residuals. WGA West President Daniel Petrie Jr. said the contract, containing $58 million in increased payments to writers and their health and pension plan, was worth twice what the producers had offered in June -- when the guild walked away from the bargaining table.

WGA East President Herb Sargent said the deal is "unusually rich" in terms of dollars, but he was still disappointed on the DVD issue.

"The companies have refused to acknowledge the need for an improvement in our 'abnormally low' residuals formula for DVDs and home video," Sargent said.

Going into contract talks with producers last year, SAG officials had been insistent that they would stand their ground for a larger share of home-video revenue. However, a sort of conventional wisdom took hold in Hollywood that producers likely would have ramped up production before the current actors' contract was due to expire on June 30 -- probably leading to a de facto strike, regardless of whether actors wanted to walk out or not.

Gilbert anticipated that dissident SAG and AFTRA members will not be satisfied with the new deal.

"Before the ink is even dry on this deal, opponents will cry out defiantly that we did not fight to the bitter end," she said. "They are wrong. Just a few years after a strike over the commercials contract, their approach would bring working actors to the brink of another work stoppage and recklessly gamble with the careers and lives of our working members."

SAG and AFTRA board members will consider the tentative agreement on Jan. 29 and, if they approved it, it will be put to a vote by union members. If they vote "yes," the prospects are good that Hollywood will enjoy labor peace for the next three years -- when the issue of how to carve up DVD revenue is sure to come up again.

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