Ad Industry, Talent Unions Agree to Extend Contract

If Ratified, Pact Will Give Groups Until 2008 to Complete Compensation Study

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LOS ANGELES ( -- Representatives from the advertising industry and Hollywood's commercial talent unions agreed today to a two-year extension on their current contract.

The contract, which was set to expire in October, now will run through October 2008. The extension still must be ratified by the unions' boards and membership.

The extension is aimed at giving the groups enough time to complete a compensation study. That study, by a yet-to-be-named consultant, will address the sticky issue of how talent will be compensated for ads that appear across various digital media.

Current contract
The current contract addresses mainly TV, radio and the internet, though the groups agreed to expand those parameters to include media such as cellphones and any future platforms that are developed.

In the near term, it also will give advertisers more flexibility and a quicker turnaround time to edit commercials for the internet and new media.

The groups -- the ad industry's Joint Policy Committee on Broadcast Talent Union Relations, the Screen Actors Guild and the American Federation of Television and Radio Artists -- also agreed that actors will receive a 6% increase in basic compensation over the two years and a bump in contributions to the unions' pension and health plans. That figure is expected to increase from 14.3% to 14.8%.

Looking for consultant
Today's move has been anticipated since May, when the groups started looking for a consultant to do a compensation study. Doug Wood, lead negotiator for the ad industry's Joint Policy Committee, said the field has been narrowed to six consultants, and the groups will decide shortly who will do the work.

Mr. Wood said the agreement serves both the ad industry and the talent community. "It will help us find a new way to compensate actors and make sure that advertisers receive a fair return on their investment," he said.

The ad industry and talent representatives have agreed that the original contacts forged in the 1950s do not adequately address the exploding digital landscape in which ads can be used on cellphones, video on demand, iPods, MP3 players and other platforms.

The groups have been in discussions for months on how best to study those issues and use the information to come up with new revenue models to stave off a repeat of the 2000 strike against the ad community that lasted six months.
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