Cable-Ad Pay Deal Resolves Actor Strike

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New York-Ending a bitter six-month strike, actors and the advertising industry last week hammered out a tentative agreement that would increase the pay scale for cable commercials by 140 percent over three years, union officials said.

But the settlement didn't include one of the actors' key demands: the payment of residuals each time a commercial airs on cable.

At a press conference here last Monday, the American Federation of Television and Radio Artists and the Screen Actors Guild outlined details of the pact that was expected to end the fractious labor dispute that started May 1. During the battle, the ad community was represented by the American Association of Advertising Agencies and the Association of National Advertisers.

The tentative deal was up for a vote before the joint SAG and AFTRA boards this past Saturday. The unions were expected to issue a back-to-work order pending ratification.

AFTRA and SAG wanted their 135,000 members to be compensated on a "pay-per-play" basis, or each time a spot airs on cable television. Pay per play is the compensation model for broadcast-TV spots; actors receive a flat fee for cable work.

The unions had initially compromised on that issue to help cable through its infancy, but feel they are now entitled to pay-per-play because the once-fledgling medium has come of age. Cable was a key issue, union officials said.

"We wanted pay-per-play for cable," said chief SAG negotiator John McGuire. "Our membership wanted it very badly. But we could not convince the [ad] industry of that."

The unions did win a better compensation rate for cable, he said. By the third year of the new contract, on-camera talent will see a 140-percent increase in their flat fee for cable spots, McGuire said.

That will reportedly take the rate to $2,460 for ads that run on cable by the third year of the contract, up from $1,390 in the first year and $1,706 in year two.

"The agreement is reasonable and offers something to both sides," said Joseph Ostrow, president and CEO of the Cableadvertisers' creative television Advertising Bureau. "Right now, it's too early to gauge the potential impact on cable ad revenues. The positive news is that it will restore advertisers' creative freedom to make optimum use of the power of cable TV."

The ad industry had initially asked the unions to drop pay-per-play residuals for broadcast network ads and accept the cable model for both mediums. But advertisers eventually dropped that demand, and the unions abandoned their quest to get pay per play for cable.

During negotiations, the ad industry had also sought to have weblet Pax TV treated like a cable network, rather than a broadcast outlet, according to McGuire.

Under the new deal, McGuire said, Pax will be treated like a broadcast network. But its spots will have a separate-and presumably lower-pay-per-play structure than the "Big Four" broadcasters.

A Pax TV spokeswoman declined to comment, saying, "We're not part of the deal." She declined to elaborate further.

The unions made some headway not only on cable, but also with respect to Internet advertising.

For the first time, the new contract recognizes SAG and AFTRA's jurisdiction over commercials produced for the Internet. That means union actors must be used for those ads, although fees weren't spelled out. But producers of such ads must contribute to the unions' health and pension funds.

"We have preserved our future by getting jurisdiction on the Internet," SAG president William Daniels said.

The new three-year deal also includes increases in payment for Spanish-language program use.

Last week's press conference at Manhattan's Millennium Hotel was jam-packed with reporters and union members, who joyfully hooted and hollered throughout. Union members Karl Malden, Richard Dreyfuss and Miguel Ferrer were among the attendees.

"At the end of the day, we stuck together and we won," Dreyfuss said.

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