Talks on Interactive Agreements Break Off

Video Game Producers Fail to Address SAG, AFTRA Demands for Profit-Sharing, Rejecting Even Modest Union Proposals

Los Angeles (May 13, 2005) – Screen Actors Guild (SAG) and the American Federation of Television and Radio Artists (AFTRA) announced today that talks with video game producers for new Interactive Media Agreements have broken off, as the final proposal presented by the companies again failed to address the fundamental issue of profit-sharing.

After two extensions and numerous bargaining sessions since February 15, 2005, the contracts expire at midnight this evening. No further extensions or talks are planned at this time. SAG and AFTRA have both sought and received strike authorization from their members and will now hold caucuses with members in several key cities to determine whether a work stoppage is necessary. Final strike authorization requires the approval of each union’s elected leadership.

The key stumbling block in efforts to reach a deal was the producers’ repeated unwillingness to explore any revenue participation options for actors in the most successful games. Their refusal to create any form of residual structure – a concept accepted throughout the entertainment industry and common to all other areas of both unions’ jurisdiction – even included rejection of a modest union proposal to share in profits on games that sell more than 400,000 units, which, in 2004, would have impacted less than 30 games.

In the early 1990s, recognizing the emerging nature of this industry, both unions agreed to contracts that included lower rate structures for actors and no back-end obligations. But with the industry’s maturity and enormous growth – illustrated by the fact that some games now gross well over $100 million – the unions insisted that these new agreements include their fair share of the profits generated by their work through a profit-based residual model.

SAG National President Melissa Gilbert noted, “Game revenues exceed domestic box office receipts. Producers rejected even a modest proposal of a residual structure that would cost them less than one percent of the revenue generated on only the highest grossing games. There is only one way to describe their position: completely unreasonable and lacking in any appreciation of the contributions made by actors to the enormous profits enjoyed by this industry. If producers want their games to maintain a professional quality, they need to offer an agreement that shows greater respect to the professional performers who make these games come alive.”

“AFTRA deeply regrets the producers’ intransigence in being unwilling to acknowledge the significant contributions of our members to this exploding and profitable sector of the entertainment industry,” stated AFTRA National President John P. Connolly. “To deny working class performers their fair share of the tremendous profits their labor helps to generate is illogical, unreasonable and unjust. It is simply short-sighted to believe that consumers don’t care about the artistic quality of the characters.”

The AFTRA and SAG negotiating committees plan to report back to their respective governing bodies – the AFTRA and SAG National Boards or their designees – before making decisions on further action.

About SAG

Screen Actors Guild is the nation’s largest labor union representing working actors. Established in 1933, SAG has a rich history in the American labor movement, from standing up to studios to break long-term engagement contracts in the 1940s to fighting for artists’ rights amid the digital revolution sweeping the entertainment industry in the 21st century. With 20 branches nationwide, SAG represents nearly 120,000 working actors in film, television, industrials, commercials and music videos. The Guild exists to enhance actors’ working conditions, compensation and benefits and to be a powerful, unified voice on behalf of artists’ rights. SAG is a proud affiliate of the AFL-CIO. Headquartered in Los Angeles, you can visit SAG online at www.sag.org

About AFTRA

The American Federation of Television and Radio Artists -- affiliated with the AFL-CIO -- is a diverse national union representing nearly 80,000 professional performers, broadcasters and recording artists in 32 Locals throughout the country. AFTRA members work as actors, broadcast journalists, dancers, singers, announcers, hosts, comedians and disc jockeys in all aspects of the media industries including television and radio, sound recordings, commercials, industrial non-broadcast, interactive games and the Internet. More information on AFTRA is available at www.aftra.com.