Actors, studios reach contract deal

Union and studio negotiators reached a deal late Tuesday

LOS ANGELES, California (CNN) -- Hollywood dodged a possible actors' strike late Tuesday as producers and actors' unions reached a tentative agreement on a three-year contract.

The new contract must be approved by the boards of the Screen Actors Guild and the American Federation of Television and Radio Artists and then by the unions' membership, which numbers 135,000.

SAG and AFTRA had been negotiating with the Alliance of Motion Picture and Television Producers since May 15. Talks continued after the old contract expired last Sunday at 12:01 a.m.

VIDEO Actors unions and producers reached a tentative three-year contract agreement late Tuesday in Los Angeles (July 4) Play video (QuickTime, Real or Windows Media)

"On behalf of the major studios and major independent production companies who we, the Alliance of Motion Pictures and Television Producers, represent, I can tell you that these were difficult negotiations," said Nick Counter, AMPTP negotiator, "because of the complexity of our business today."

Although details of the deal were not immediately available, the principal issues for the guilds were pay increases for the nearly 75,000 actors who make between $30,000 and $75,000 a year. Actors also wanted an increase in residuals when their work appears in secondary markets.

Only about 2 percent of the union's membership earns more than $100,000 a year, officials said.

"I think we have focused on the middle-class actor who has needed some relief and help to be able to live a life in this industry and we have done that," said SAG president William Daniels.

The talks took place under a strict news blackout, but despite an absence of information there was optimism in Hollywood that a deal would be reached, especially after the Writers Guild of America was able to strike an agreement with producers in June.

SAG spokesman Greg Krizman had said Monday a strike was not imminent. The union had not sought a strike authorization vote from its members -- a process that would have taken up to five weeks to complete.

Nevertheless, the threat of a strike spurred film and television studios to speed up their production schedules. A walkout could have delayed fall television shows for weeks.