Actors Unions OK Ads Contract

Members of SAG and AFTRA have overwhelmingly voted in favor of a three-year ad contract covering about $1 billion in annual earnings.

The contract received a 93.8% endorsement seven weeks after the unions and ad industry struck a tentative deal.

The unions estimated that the new agreement, which is retroactive to April 1, will produce more than $108 million in additional earnings, including $24 million more in contributions to the unions’ health and pension funds.

The pact retains the current pay-per-play Class A residuals structure, but also includes a provision for a pilot study on a ratings-based compensation model. In a first, the deal also includes a payment structure for online and new media ads, to kick into effect in the third year.

The ad industry kept annual salary gains to about 2%, or 5.1% for the life of the agreement, notably lower than the 3% and 3.5% increases provided by last year’s entertainment union contracts, and in a first, it negotiated a cap on employer contributions to pension and health plans.

Why it matters: The recession, coupled with last fall’s shift in power at SAG to a more moderate faction, helped smooth the way for an easy ratification of the agreement. Its first-time compensation structure for Internet and new media ads also helps create clarification in this rapidly growing marketing arena.