This Disaster Is No Movie

Stalled contract talks between Hollywood studios and the Screen Actors Guild provide a script for savvy negotiating.

The summertime standoff between Hollywood studios and the Screen Actors Guild (SAG) yielded some useful lessons for executives interested in honing their negotiating skills.

At press time, SAG was still rejecting an offer from the studios’ negotiating arm, the Alliance of Motion Picture and Television Producers, to replace a contract that expired in June. As with the writers and directors before them, SAG is focused on winning better terms for any revenue derived from new media entertainment, such as sitcoms that are downloaded from the Internet.

What can a CFO take away from this standoff, aside from a newfound desire to join a union where every member looks like George Clooney or Katherine Heigl?

Stay consistent. The studios’ main strategy has been to stick closely to the terms it negotiated with writers and directors. Consistency is wise in this case, says David R. Ginsburg, executive director of the entertainment-law program at the University of California, Los Angeles, and a former studio executive, since using an existing template allows studios to claim they are being fair — and protects them from requests to renegotiate contractual structures that have already been agreed to.

Divide and conquer. Even as SAG was digging in, the studios won an early settlement with a second, smaller actors’ union, the American Federation of Television and Radio Actors. Since 44,000 AFTRA members are also part of 120,000-member SAG, the agreement had the side benefit of exposing a lack of solidarity among the actors.

Which brings us to a final lesson about what not to do: “Never interfere with your enemy if it’s destroying itself,” says Ginsburg.

Top 10 Highest-Paid Actors (2007 earnings)

  1. Will Smith, $80 million
  2. Johnny Depp, $72 m
  3. Eddie Murphy, $55 m
  4. Mike Myers, $55 m
  5. Cameron Diaz, $50 m
  6. Leonardo DiCaprio, $45 m
  7. Bruce Willis, $41 m
  8. Ben Stiller, $40 m
  9. Nicolas Cage, $38 m
  10. Keira Knightley, $32 m

Source: Forbes

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