Strike shakes up shoots, prods interim pay pacts

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Major advertisers are still resisting union demands for higher pay in the commercial actors strike. But as the highly charged dispute goes into its second week, they are paying a price -- in the form of payments for security personnel to protect non-union shoots.

Striking members of the Screen Actors Guild and American Federation of Television & Radio Artists protested last week at shoots for AIG Insurance in Brooklyn and Long Island, New York; Sears, Roebuck & Co. in Los Angeles; General Motors Corp. at the Burbank, Calif., airport; BellSouth Corp. in Northridge, Calif.; and AT&T Corp. in Petaluma, Calif. As a result, ad agencies are keeping location information secret, as well as hiring private security companies, passing the extra costs on to their clients. Overall, though, shoots are continuing -- albeit with some delays and with creative scheduling and casting.

`PAY-PER-PLAY'

The central issue in the strike, which began May 1, is a "pay-per-play" structure for commercials aired on cable networks that already exists for broadcast networks. Currently, there is a minimum one-time fee for on-air performers of $1,000 for a 13-week cable run of a single commercial. Advertisers support changing the pay-per-play payment for broadcast commercials to a fixed $2,575 and boosting cable payments to $1,627. That would give performers a 5% pay increase, advertisers said, compared to a union plan that advertisers contend could lift cable commercial costs by 400%.

"We have no desire to make this an extended matter," said Ira Shepard, general council for the joint committee of the American Association of Advertising Agencies and the Association of National Advertisers. "Our overall goal is to reach an agreement with the union. The ball is in their court."

But as the strike grinds on, it appears some advertisers are feeling the pressure. Some 75 to 100 are believed to have signed "interim" agreements with SAG and AFTRA that call for an immediate across-the-board 12% increase for the length of the strike. SAG/AFTRA executives wouldn't release names of signatories, but Advertising Age has learned the list includes smaller advertisers, recording studios, and some TV and radio production companies, acting on behalf of larger ad agencies and advertisers.

"Some of these companies are shell companies," said Matt Miller, president of the Association of Independent Commercial Producers.

INTERMEDIARIES

There are benefits for advertisers in using radio production houses and other intermediaries. It keeps big agencies and advertisers one step removed from contact with union performers. By signing the agreements, these radio production companies -- not the agencies -- are responsible for payments to the talent. "[SAG/AFTRA] is bound to pick off some small advertisers as well those who don't know any better," Mr. Miller said. "I can't imagine that any big single advertisers have signed on."

In fact, executives at the Joint Policy Committee of the ANA and Four A's said none of their members have signed any agreements with SAG/AFTRA.

Those who did include Oink Inc. Radio, New York; Worldwide Wadio, Los Angeles; Bert Berdis & Co., Los Angeles; and Radio Savant, Los Angeles. Collectively, these companies produce almost 50% of all national radio advertising, according to some estimates. Their clients have included American Airlines, Apple Computer, Fox, IBM Corp., Microsoft Corp., PepsiCo, Texaco, and Visa International,

WE `WANTED TO STAY WORKING'

"We just wanted to stay working," said Jeff Howell, producer/director for Worldwide Wadio.

And most are working, according to AICP's Mr. Miller. "Every single one of my members has four shoots going on," he said. "Some are in the double digits."

But the shoots haven't always been easy. On May 3, Nike produced a shoot in Los Angeles. Because city permits are available for review by the public, picketers found the location and showed up at the intersection of Hollywood Boulevard and Vine Street at 3 p.m. But Nike didn't start shooting until 8 p.m. By then only a few picketers remained, and production proceeded without incident.

Nike was using young dancers and athletes who weren't SAG members for the commercial; according to a Nike spokesman, first-time commercial performers don't need to be SAG/AFTRA members.

A Manhattan shoot by DiMassimo Brand Advertising, New York, for YouDecide.com, a personal financial services site, was interrupted by protesters.

"They tried to stop us, but they were at the wrong shoot," said Lee Goldstein, VP-business development at the agency. "We had always planned on using non-SAG members."

Some anticipated the strike. David Angelo, a partner and chief creative officer of David & Goliath, Los Angeles, said production on Kia Motors America's commercials was moved up, finishing on Easter weekend. Similarly, on the opposite coast, Mike Rogers, president-executive creative director of Wolf Group, New York, said, "We were scrambling last week finishing up TV . . . but if the strike continues, after a couple of weeks, we will definitely be affected." Mr. Rogers added the creative strategy of one client, lawn products marketer Scott Co., works well in this environment. "We're lucky we use real people in those spots."

In a boon for the unions, last week two big-name professional athletes decided to forgo filming. On May 2, golfer Tiger Woods decided to postpone an Orlando shoot for Nike, while Allied Domecq's Dunkin' Donuts delayed a commercial with Boston Red Sox star Nomar Garciaparra.

"We support Nomar in not crossing the picket line and will make the best of it," said Ed Frechette, Dunkin' Donuts director-field marketing, Northeast region. The ad was the first of a planned three-year agreement with Mr. Garciaparra.

AGENCY PERFORMERS

But contingency plans only go so far. If the strike lasts for a month or two, Eric Hirshberg, exec VP-executive creative director at Deutsch, Marina del Rey, Calif. -- and a SAG member -- said he was uncertain how the agency would cope, particularly for ongoing campaigns in which voice-overs are an important creative element.

"We'll find who we can find," he said. "Everyone here will be in front of a camera," he said. "Creatives will be performing their own scripts."

Contributing: Hillary Chura, Alice Z. Cuneo, Jean Halliday, Richard Linnett, Jack Neff, Kate McArthur and Laura Petrecca

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