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Lawyer Expects Quick Resolution to SAG Impasse

30 Jan, 2009 By: Erik Gruenwedel

Months of stalemate that has left Hollywood actors working without a new studio deal, as the general economy tanks, will likely see both sides come to a resolution next week, says an attorney familiar with entertainment labor negotiations.

Representatives from the Screen Actors Guild (SAG) and the Association of Motion Picture and Television Producers (AMPTP), the union representing studios, are slated to meet Feb. 3-4 at the AMPTP offices in Sherman Oaks, Calif.

The meetings follow the Jan. 26 termination of SAG chief negotiator Doug Allen and would be the first involving the actors’ new negotiating team headed by senior advisor John McGuire. Former general counsel David White is interim executive director.

Norman Samnick, an attorney with Bryan Cave LLP in New York, said McGuire is a “first-rate” negotiator who has pulled SAG out of previous labor bottlenecks, including helping to resolve a 2000 work stoppage by TV and radio commercial actors.

“The best thing that happened to the guild is having McGuire on board,” Samnick said.

Actors are seeking greater compensation from Internet distribution, in addition to revamping the 20-year-old home video residual agreement, which studios have steadfastly refused to address. The agreement originally applied to VHS, but the subsequent arrival of DVD and Blu-ray made potential residuals a more lucrative prospect.

In addition to increased minimums, pension and health care provisions, studios are offering jurisdiction on new-media programs, in addition to first-ever residuals on ad-supported streams of movies, TV shows, permanent downloads (burn to disc), original and derivative new-media programs.

Samnick said he remembered working on the original home video residual agreement in the early 1980s sitting next to veteran studio executive Lew Wasserman, and no one realized the fiscal extent of home entertainment.He believes the studios will “play with the numbers” due to the worsening economy, a strategy he said is buttressed by recent layoffs announced at all the major players.

Samnick said studios realize they can no longer produce $100 million films and expect to get their money back, especially on the front end. Instead, studios are increasingly realizing a profit on the backend (further down the distribution channel), which Samnick said often overlaps with residuals.

He said no studio or actor can predict where new media will be in the next 10 to 30 years.

“But the bottom line [of their offer to SAG] will be the same,” he said. “And if it goes wrong, you sit down in three years and negotiate a new deal.”

He said McGuire is open-minded enough to understand that the AMPTP will not stray far from what was offered writers, directors, daytime TV actors and stage employees last year. He said the studios also recognize that McGuire, unlike Allen, is interested in making a deal quickly rather than arguing principles.

“[SAG] did not bring John in to have a strike,” he said. “He may not like [the studios’ offer] exactly, but he also knows that in this interim period he’s not going to get major changes.”

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