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Acting Up

By Jonathan Handel, Esq.

CANNES, France ? Do loose clips sink ships? Apparently the actors think so. Their ongoing union negotiations with the studios are hung up over clip consent ? the issue of whether studios can use short excerpts from movies and TV shows without an actor?s permission. In particular, the question is whether actors should have a veto right when the studios make clips available online or via cell phones.

The issue is arcane, like so much that?s recently bedeviled Hollywood labor. Studios say that seeking consent from every actor in every clip is uneconomical, which would mean no clip revenue for either side (although significant digital revenue is years away in any case). It?s a compelling argument.

Actors respond that they want to control their own images and avoid being overexposed, let alone mashed-up and morphed. That also sounds sensible ? until you consider the tens of thousands of clips already available online illegally. Neither the actors nor the studios can control those clips, or pretty much anything else on the Internet. That horse left the barn several years ago, yet management and labor are still arguing over whether to ride English or Western.

There are other major issues in the negotiations as well: Should actors get a bigger piece of DVD revenue? Yes, but they probably won?t, because the writers and directors already passed on the issue, leaving the actors with little leverage. What about union jurisdiction over low-budget new media production? The parties should adopt the nuanced deal agreed to by the directors and writers. Product integration? Force majeure? The former is a type of product placement on steroids, and the latter?s scarcely worth explaining, although it?s not without economic impact; the actors should yield on the first, the studios on the second.

On and on it goes, with mind-numbing complexity. Further confusing matters is a tussle between the two major actors unions, the Screen Actors Guild and the smaller American Federation of Television & Radio Artists. SAG and AFTRA used to negotiate jointly with the studios, but a bitter split led to negotiations this year in alternating bouts: a few weeks of discussions between the studios and SAG, then a few weeks between the studios and AFTRA, then back to SAG again. It?s like a French farce, with doors slamming as parties enter and exit the negotiating room.

Granted, these are complicated talks. Digital media is clouded with uncertainty, subsidiary issues abound, and the contract being amended runs to hundreds of pages. Yet, a sense of perspective seems nowhere in evidence. As the June 30 contract expiration approaches, we slide closer to a second possible work stoppage in the entertainment industry within a year. That could take the form of a lockout ? a studio refusal to continue or restart production during labor uncertainty ? rather than a strike, which would require a 75 percent affirmative vote, for SAG at least. Even now, feature film production has all but ceased in anticipation of the contract expiration.

If this seems dysfunctional, it is. Hollywood labor is a machine with an enormous number of moving parts, none of them well-oiled. In addition to conflict between SAG and AFTRA, there is disagreement within SAG as well, on geographic lines. Several of the unions are riven by internal strife on class lines also, and most of the unions are at odds with each other, notwithstanding some overlapping membership. Meanwhile, the studio alliance whose only responsibility is to make labor deals was unable to do so this year with either the writers or directors. Instead, several studio chiefs had to be called in to do the job, which will probably be the case with the actors as well.

While the industry endures dissension, strikes and lockouts, Silicon Valley entrepreneurs, none of them unionized, enjoy snacking on Hollywood?s bacon. They?re growing ? and gloating ? while Hollywood?s slowing. That?s not good news for Los Angeles. In addition, Hollywood is hurt by depression in the global film business, evident in diminished activity here in Cannes at the film market that accompanies the film festival. On the heels of the recent Writers Guild strike, the Los Angeles economy can ill-afford another multi-billion dollar hit.

What to do? It?s time to close the deal, first with SAG, whose productions are more affected than AFTRA?s. Let?s get the studio chiefs back in the room, then hope for rational, mutual self-interest from both sides. The SAG deal would lead to a quick conclusion with AFTRA as well, and the whole industry could get back to the hard work of making light entertainment ? and of sustaining the local economy.

First published in the Los Angeles Business Journal.

Full post as published by Digital Media Law on May 24, 2008 (boomark / email).