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Peace and Happiness and Resolution in Union Town ... Psych!

Strikewatch_blog All the strife in the Hollywood labor unions is over.

April Fool's.

We're all still in limbo.

Representatives for the performers' unions and the advertisers bargained past the official deadline of the commercials contract Monday night and into Tuesday morning, a source close to the talks said.

Though there was no consensus an hour after the existing deal expired, there was no indication from the source that the talks would collapse without an agreement.

As actors have learned over the past nine months with SAG's expired TV/film contract, they can work according to the terms of on an old contract indefinitely, as long as they don't strike or management doesn't lock them out.

A lot would have to happen before SAG and AFTRA walked off the job. The national boards of the two unions would have to send out a strike authorization referendum; that would have to be approved by 75 percent of voting members; and then the joint negotiating committee would have to call a strike.

Though the unions have drafted a letter urging strike authorization, they have not sent it to members. Rather, it was leaked to Back Stage and other news outlets in an apparent attempt to send a message to advertisers. However, hours after it was leaked, the unions issued a statement disavowing the draft's dissemination.

This is no ordinary time. In addition to SAG being nine months without a TV/film contract, the unions and the Joint Policy Committee, which bargains for advertisers and ad agencies, are debating a wholesale restructuring of how actors are paidfor commercials. The JPC wants to link residual payments to actual ratings that each network earns over a given time period. Under the current system, principal performers in a commercial receive residual payments for each of the first 14 runs of an ad every quarter on a single broadcast network (ABC, CBS, CW, Fox, and NBC). These ads are known as Class A. If the ad runs on other broadcast networks, actors get paid for the first 14 runs on those as well.

The pay is different on cable, where actors receive a flat quarterly payment for each quarter the ad runs, if it hits certain benchmarks. It's not uncommon for an ad to run thousands of times every quarter, but principal performers who receive the minimum make no more than $2,738. What has resulted, according to some industry insiders, is that actors get overpaid for Class A and underpaid on cable. (However, the so-called overpayments for Class A are dubious, when one considers that those payments have not kept pace with inflation.)

In any case, a new pay structure may not be implemented in this round of negotiations. What may be more plausible is a pilot study where one or more potential models are tested over the life of the contract (typically three years). The biggest changes will come in cable, where payments are currently linked to the number of subscribers. In the future, payments could be tied to ratings.

The biggest difference would be noticed for residual payments for commercials run on ESPN and ESPN2. ESPN has slightly more than 90 million subscribers, ESPN 2 slightly less. However, in the new models developed by consulting firm Booz Allen Hamilton(since renamed Booz & Co.), the elder sibling would be in the highest-rated category for cable, while the younger one would be near the bottom, because of their disparity in ratings.

Still, based on the Booz models, actors stand to gain significantly in their cable payments. The rub lies in traditional Class A payments, where actors are likely to see a decrease. Actors, particularly older ones who have made substantial livings on the traditional pay-per-play model, could resist such a drastic change so soon. The JPC says it wants a revenue-neutral model--meaning, the amount that actors typically receive (currently about $900 million per year) would stay the same. How it's allocated would differ.

Because of a news media blackout, it's hard to say what is causing the push into overtime, but other key issues are being debated as well, including the JPC's insistence on a cap on contributions to the the actors' pension and health plans. According to talking points that were leaked along with the draft letter, the JPC also asked for an extension of the workday, from eight to 10 hours, which would affect overtime payments.

--Andrew Salomon

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