Actors and advertisers reach contract accord

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The unions representing Hollywood’s actors have reached tentative agreement with advertisers on a new contract covering work in commercials.

The proposed three-year agreement, which was anticipated, provides a 5% pay increase in wages, contains about $21 million in increased contributions to union health and pension plans and, for the first time, establishes a pay structure for work made for the Internet and other new-media platforms, according to a statement from the Screen Actors Guild and the American Federation of Television and Radio Artists. The unions bargained jointly.

The agreement preserves for now the traditional method of paying residuals for reruns of commercials -- a key goal for the unions. Confronted with declining viewership of national ads, advertisers proposed a so-called gross-rating-points system where residuals would be based on how many people watched a given commercial, rather than the current system whereby payments are based on how often the spot runs and in what geographic location. The unions balked, fearing that would lead to a rollback in compensation. Talks, which began Feb. 23, nearly derailed over the matter. Ultimately, the parties compromised, agreeing to conduct a joint pilot study to test the new pay model.

‘During the worst economic crisis since the Great Depression, we successfully improved wages and expanded benefits to keep our members working now and in the future,’’ said AFTRA National President Roberta Reardon.

The agreement, which covers separate contracts for each union and must be approved by the boards of each group, covers more than 30,000 actors who do commercial work for film, TV and radio.

The accord brings a modicum of good news to SAG’s new negotiating team, which faces heavy pressure to deliver results for its members. SAG’s 100,000 members have been working without a film and TV contract since June 30. After a series of disputes last year, AFTRA broke ranks and negotiated a separate film and TV contract for its 77,000 members.

-- Richard Verrier