SAG, studios in tentative agreement

For Hollywood actors, the third act was anticlimactic.

After a year of warring with studios, another union and even among themselves, Hollywood’s actors finally reached an accord Friday for a new labor contract, signaling an end to a costly drama that roiled the entertainment industry just as it tumbled into the worst economic downturn in decades.

The tentative agreement between the Screen Actors Guild and the studios provides actors, who have been working without a contract since last summer, a two-year pact that the union’s president has vowed to oppose.

But it also provides relief to the 120,000 actors, nearly all of whom face the worst job climate in their lives as a result of a steep drop in movie and TV production.

If actors were celebrating, they were doing do so privately backstage, far from the limelight.

Despite repeated saber rattling by the union last year that it would win members a superior contract, in the end SAG negotiators had to accept a deal that was modeled on those negotiated by other talent unions, including the Writers Guild of America, which forged a pact amid a 100-day strike 14 months ago.

The proposed agreement, which grants a 3.5% annual pay increase and establishes fees for shows currently streamed on the Internet, was mostly the same contract that studios offered last summer. That is likely to raise questions inside and outside of SAG over what the union accomplished by its months-long standoff with producers.

The negotiations, which began a year ago, ultimately left SAG in a weaker state by splitting the union into two warring factions and pushing most new TV shows into the arms of a rival actors union, the American Federation of Television and Radio Artists, which negotiated its own contract last year.

Since then, AFTRA has in effect taken over new TV production, signing for 66 of 70 prime-time broadcast TV pilots this season, an especially worrisome development for SAG, which has traditionally dominated prime-time television.

With fewer members working in television, SAG has seen a sharp falloff in income from membership dues. The loss of income combined with heavy expenditures, including more than $100,000 on an unsuccessful campaign to defeat AFTRA’s contract, left SAG with a deficit exceeding $6 million, people close to the guild say.

SAG’s negotiators also had the ill luck of bad timing: The recession severely undermined the union’s negotiating clout.

“Any leverage they had was weakened by their internal fighting and the overall economy,” said David Smith, a labor economist at Pepperdine University. “It was a strategy that failed on the [basis] of miscalculated leverage and power.”

As expected, the tentative contract was endorsed by the union’s negotiating task force Friday and will be voted on by SAG’s 71-member board Sunday. Moderates, who dominate the board, are likely to back the agreement, ensuring board approval.

Although the contract is expected to be ratified by members, SAG President Alan Rosenberg and his supporters are sure to mount a vigorous opposition campaign. Rosenberg was a staunch backer of former Executive Director Doug Allen and vowed to wage “a civil war” over his firing in January by the board, which faulted Allen for mishandling contract talks.

Rosenberg has since accused his critics of undermining the union. He voted against the contract Friday, contending that it shortchanged actors, especially in terms of how they would be paid in the digital era.

Supporters contend that the offer is the best that can be achieved for now.

The agreement, hashed out by chief negotiator John McGuire, followed weeks of back-channel talks between David White, the interim executive director, and top media executives, principally Walt Disney Co. Chief Executive Bob Iger and Warner Bros. Chairman Barry Meyer.

The revived talks were nearly derailed by a dispute over when SAG’s contract would expire. SAG leaders insisted that their new contract run through June 2011 so that the union could line up its next round of negotiations with the expiring contracts of other Hollywood talent unions. The studios, however, wanted a three-year term, which would push SAG’s contract expiration into 2012.

Ultimately, the studios agreed to a two-year term. Because the contract is not retroactive to July 1, that means in effect that SAG is giving up a year’s worth of pay increases, which the studios have estimated at $65 million.

The two sides agreed that they would settle outstanding claims for back pay on behalf of actors who lost their jobs during the writers strike and conduct early talks for the next round of negotiations.

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richard.verrier@latimes.com