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Ad Agencies, Performers Unions Agree on Extension

The performers unions and advertising industry have tentatively agreed to a two-year extension on performer contracts while the two sides jointly study alternative compensation methods for the digital age.

The current contracts were to expire Oct. 29.

In the meantime, according to the terms of the extention, actors will get a 6% pay boost, a .5% increase in employer contributions to union pension and health plans, and the contract will cover commercials on new media like cell phones. Advertisers get more flexibility to edit ads for new media and will be allowed to experiment with shorter ad cycles for the Internet and other digital platforms.

A New Media committee will also be formed with representatives from both sides and empowered to adjust the extension terms to accommodate technological changes and "paradigm shifts."

The deal was agreed to by the Screen Actors Guild (SAG), the American Federation of Television and Radio Artists (AFTRA), and the ad industry's Joint Policy Committee on Broadcast Talent Union Relations (JPC).

It must still be ratified by union rank and file and the boards of the Association of National Advertisers and The American Association of Advertising Agencies.

In March, the two sides put out a request for qualifications (RFQ) for an independent consultant who can "develop alternate methods to compensate actors for their participation in commercials that appear on television and radio as well as in the growing array of new media."

But while unions may be looking for more given the proliferating platforms, agencies want to point out how small some of those platforms are.

New-media appearances, say advertisers, have been added on to compensation packages without taking into account the increasingly targeted nature of the business.

"The payment structures in the current collective bargaining agreements with SAG/AFTRA were originally developed to meet the needs and problems of the early 1950s," said lead JPC negotiator Douglas J. Wood said March 15 in announcing the RFQ. "As different means of broadcasting were developed, new payment streams were added on to the contract, creating enormous administrative complexity, distortions in the allocation of compensation, and the potential for out-of-control costs."

His example of a distortion was "talent payments for broadcasts that reach very small audiences can today exceed the actual cost of the media."

Wood had said that  the new model must take into account cellphones and iPods, suggesting the targeted nature of some of the new delivery systems needs to be factored in.

Wood said Friday of the extension: "“This early collaborative effort between the unions and the industry is a balanced compromise, and provides the time needed to develop a comprehensive model that fairly compensates performers and ensures that advertisers receive a fair return on their investment."