SAG stakes fight on made-for-Internet content

An extra in the DreamWorks' production of "The Soloist" walks past movie lights during a location shoot at the Biltmore Hotel in downtown Los Angeles March 20, 2008. Hollywood producers posted their busiest quarter ever as on-location shoots in the Los Angeles area between April and June rose 26 percent from a year ago, a permitting agency said Thursday July 17, 2008. (AP Photo/Damian Dovarganes)

LOS ANGELES—The Screen Actors Guild on Thursday gave its most detailed explanation yet for its rejection of a final contract offer by Hollywood studios, citing shortfalls in pay and union jurisdiction on made-for-Internet productions.

In a letter to SAG's 120,000 members, Doug Allen, the guild's executive director, claimed the offer would allow nonunion actors into "almost all new media productions for the foreseeable future."

It said the producers' offer also would leave out residual fees paid to actors for content that is made specifically for, and then retransmitted on, the Web.

"A program originally made for ABC.com could be available for re-viewing on ABC.com ... as often as possible and forever with no residuals," Allen wrote. "The stakes are too high to concede."

The Alliance of Motion Picture and Television Producers responded with an equally detailed statement describing its Internet offer as "a major advancement" from the previous contract.

The producers have offered to mandate union coverage for Web shows that cost less than $15,000 per minute, but only if a union actor is hired. Those costing more would also be covered, regardless of who is hired.

They also offered residual payments for Internet-only shows that are rebroadcast on pay platforms like iTunes, theatrically or on television. Paid downloads of movies would trigger double the residual rate actors now receive from DVDs.

"Not a single one of these rights exists under the contract that expired on June 30 -- a contract that SAG members now must work under because of the failure of SAG negotiators to make a deal," the alliance said in a statement.

The producers have said a final offer they made June 30 was worth $250 million in additional compensation over three years, an estimate the guild disputes.

The offer mirrors those accepted by writers, directors and the smaller actors union, the American Federation of Television and Radio Artists.

The producers alliance and the guild met Wednesday for two hours, but did not reach a deal and scheduled no further meetings. The alliance has said it is not interested in counterproposals.

The producers said if their final offer is not ratified by Aug. 15, any proposed wage increases would not be made retroactive to July 1, potentially costing actors more than $200,000 a day.

Also Thursday, the nonprofit permitting organization FilmL.A. said Hollywood producers posted their busiest quarter since at least 1993 as on-location shoots in the Los Angeles area between April and June rose 26 percent from a year ago.

The increase, mainly due to producers making up for time lost to the 100-day writers' strike, came amid claims by the major studios that the industry had slowed to a crawl over fears of an actors' strike.

(Corrects name of alliance in 5th paragraph to say 'Producers' instead of 'Artists')