• Actors Unions and Advertisers Strike Deal
  • April 28, 2009
  • Law Firm: Manatt, Phelps & Phillips, LLP - Los Angeles Office
  • The two actors unions-the Screen Actors Guild and the American Federation of Television and Radio Artists-announced that they have struck a provisional three-year contract with advertisers, effective April 1, 2009, through March 31, 2012.

    The new contract provides for an immediate 5.1% boost in minimum pay rates to actors in the first year of the agreement, followed by a wage freeze for the next two years. Combined, that works out to an average raise of 1.7% per year over the next three years.

    In the midst of the recession-which has hit the advertising industry hard-the actors unions may feel that any raise is better than none. A new global ad–spending forecast from WPP’s Group M predicts that U.S. ad spending will fall 4.3% this year and another 6.8% next year. In addition, SAG has yet to renew its TV and theatrical contract, which expired in June, or its basic cable and video game contracts, which expired at the beginning of the year.

    The ad deal is worth about $900 million. It also provides for a minimum session fee (for appearing on the set) of $567.10 for actors in commercials "made for and moved over" the Internet. Actors will also be guaranteed residuals of 1.3 times the minimum session fee during the first eight weeks the commercial is online and 3.5 times the minimum session fee for a commercial that is online for a year.

    However, the provision would not take effect until April 1, 2011, meaning that actors will have to continue to negotiate their own minimum fees for Internet--only commercials for another two years.

    The agreement is still tentative. It must be approved by the boards of both unions and then ratified by a majority of each of their memberships.