SAG contract drama coming to close

WGA and DGA head toward renegotiation

By CYNTHIA LITTLETON

At long last, SAG's tortuous, yearlong contract drama with Hollywood's majors appears to be coming to a close, capping a two-year period of labor unrest that included the trauma of the 100-day writers strike.

That should have the biz breathing a sigh of relief, right?

Not really.

Because even if all goes well with the new regime at SAG and a handshake deal is finally reached this month, there's little respite in sight for the studios: The WGA and Directors Guild of America contracts come up for negotiation again in mid-2011, which means the jockeying will begin this time next year, if not sooner.

"The studios usually buy themselves three years of peace with new contracts, but not this time," says Jonathan Handel, an attorney with TroyGould who writes frequently on labor issues for the Huffington Post.

The question of the expiration date for SAG's next contract has been the final hurdle for the thesps and studios. The signs are pointing to a compromise that would allow SAG to keep in line with the WGA and DGA and maintain its June 30, 2011, expiration date, rather than three years after a new pact is ratified, which probably won't be until May at the earliest. (In exchange, SAG is expected to settle its claims to an estimated $50 million in force majeure coin owed to actors from the WGA strike-induced shutdown of TV skeins.)

The turmoil that has rocked the town ever since the writers and studios began sparring in 2007 stands in sharp contrast to the nearly 20 years of relative calm for the studios and the guilds in the wake of the five-month WGA strike in 1988. The painful memory of that disastrous work stoppage helped spur the sides to contract compromises "for the sake of the business" for years.

There's sure to be more dickering in the 2011 round of negotiations over the compensation formulas that were hard-fought in the 2008 DGA and WGA contracts (the same template that SAG is poised to embrace). Already, the WGA has grievances pending in a dispute over the interpretation of a key point of compensation terms for paid downloads.

The added pressure of the world economy's gyrations will only complicate the next round of negotiations. In the face of slumping markets, Hollywood's major players are generally cutting back on the volume of movies and scripted TV skeins -- further tightening the job market (and residuals-earning potential) for WGA, DGA and SAG members.

Another nerve-rattling issue looming over the next set of contract talks is the state of the guilds' pension and health funds, which have been battered by stock market swings and health-care cost spikes. SAG disclosed that the value of its pension plan sank nearly 23% last year; the DGA's basic pension plan sank nearly 27%. (The WGA's plan has yet to disclose its figures for 2008.)

While new media is sure to remain a lightning rod, the fire next time could be over a cash influx to shore up the guilds' ability to care for their elderly and infirm.

This article was updated on April 11, 2009.