SAG’s Stalemate With Ad Industry Costs L.A. Plenty

Six weeks into what soon could be the longest strike ever by actors against the advertising industry, miscalculations on both sides have created the worst possible scenario for Los Angeles: a stalemate.

With each day, the collateral damage to the city’s commercial production business piles up. What had been a vibrant industry has had the wind knocked out of it since the strike began May 1. Local film officials estimate that $1 million a day in production work is fleeing to outlying counties, other states and even other countries to avoid the disruptions of picketers.

There is little hope it will end soon, with both actors and advertisers determined to force a wholesale restructuring of the way actors are paid for network and cable TV ads, and with neither side’s tactics forcing the other to budge.

Barring a miracle, the strike in a little more than a week will pass the record 58-day ad strike of 1952-53.

A mediator met separately with the two sides this week, but no progress in the standoff was reported. No new meetings are scheduled.

Worse still, it’s a preview of the kind of labor nightmares that the major studios and TV networks could face next year when it is their turn to negotiate with actors over similar pay issues.

Try as they might, actors have been unable to shut down commercial production or put enough public pressure on any of the nation’s largest advertisers to break ranks by agreeing to make ads on the terms of the striking unions, the Screen Actors Guild and the American Federation of Television and Radio Artists.

Commercial producers are routinely taking ads to areas such as Orange County, Ventura County and areas outside of California such as Vancouver, Canada, where they can shoot away from the picket lines. Or they are making ads by quietly getting permits under the pretense of shooting music videos. One commercial producer, who requested anonymity, says he has made commercials with permits that said he was shooting rap videos.

The strike was called under the more militant SAG leadership of actor William Daniels, who in November led the ousting of the guild’s previous regime, calling them “pussycats” and vowing a tougher stand in negotiations.

Other entertainment labor union leaders admire how the previously fragmented union has pulled together. But they say that its tactical moves leave much to be desired, especially the early rhetoric that made it clear to the industry that a strike was coming. As a result, they say, advertisers accelerated efforts to stockpile commercials.

“SAG led with its chin and telegraphed its punches,” said one entertainment union leader. “God knows, we want them to win, but this strike went off half-cocked.”

SAG, this union official added, should have been more stealthy, quietly lining up support, mending fences with some other entertainment unions with which it has had rocky relationships, recruiting big stars to join the effort and soliciting politicians to publicly support their cause, much as janitors successfully did during their recent strike.

The strike centers on the way actors are paid. Actors now receive money whenever commercials run on network television. They want that expanded to the growing cable TV market, where they now receive just a flat fee. But the advertisers, citing the fragmenting network TV audience, want to pay a flat fee to actors for ads that run on both network and cable.

But observers also fault the advertising industry for boxing in SAG negotiators by insisting on a change in the formula so that actors would get a flat fee for network ads. The demand was immediately labeled a “rollback” and became an effective call to arms for actors that helped solidify the union.

Viewed initially by observers as a possible bargaining chip that might be removed, the hardening positions on both sides have turned the demand to change the formula into an insurmountable request that no negotiator would be able to take back to the actors, especially in a booming economy.

“It’s going for the home run. It’s a ridiculous position for a negotiator. This isn’t the auto industry or the steel industry, where a plant might get shut down if they don’t accept it,” said one labor official.

Moreover, advertisers, with celebrity-laden, multimillion-dollar marketing campaigns at stake and major TV events like the Summer Olympics fast approaching, are having trouble persuading big-name stars to cross the picket lines, leaving them with a pool of no-name, relatively inexperienced actors.

On Thursday, SAG members picketed a Campbell’s Chunky Soup commercial being shot at the Los Angeles Coliseum featuring St. Louis Ram quarterback Kurt Warner and Denver Bronco running back Terrell Davis. But outside of a few pro football players, major stars in endorsement contracts are holding fast.

The advertisers so far have been able to tighten the screws on a union that some thought was in such disarray that it would be incapable of pulling off a decent strike. SAG has been plagued in the past by bitter infighting and an apathy growing out of the fact that more than a quarter of its members every year earn no money from acting. Yet it has become galvanized by this strike. And the brunt clearly is being felt by its most impoverished members, many of whom rely on cereal and shampoo commercials to pay the rent.

“On our side, fighting them to a standstill is considered an accomplishment,” said one senior union leader. “The ad agencies really believed that they could take advantage of all the divisions within the union.”

The battle has become largely a public relations war, with each side trying to accumulate the most TV sound bites and headlines. Actors are regularly picketing public sites, as they did this week with star-studded rallies in Los Angeles and New York. The union jumped on an embarrassing incident for the industry when a tasteless ad taken out by a production company trying to lure commercials to South Africa appeared in a trade magazine. It showed the drooping breasts of an African woman and the caption, “In South Africa, this is what SAG means.”

On Thursday the ad industry fought back with a full-page ad in the trade paper Daily Variety, made to look like a script featuring two out-of-work actors, George and Martha. The two conclude: “It’s regular union actors like you and me” who are getting hurt in the strike.

Union members counter that their livelihoods are at stake because commercials pay the bills for a lot of struggling actors. SAG is a union where 77% of the 98,000 members either do not make any money from acting at all or earn a paltry $7,500 or less annually from the profession. Just 4% earn more than $75,000 annually.

Actors have become accustomed to dealing with long periods of unemployment, which is a reason labor leaders believe they can endure a long strike. And some of the more active actors in commercials are still drawing residual checks for commercials made before the strike, giving them a financial cushion.