Hollywood's talent agencies are tightening their belts to build up financial reserves, another sign that the entertainment industry is preparing for a strike by writers and actors later this year.
Many cost-cutting efforts took effect this week when agents returned to work after the holidays. The measures include deferring salaries and bonuses, cutting expenses and travel, and skipping annual rituals such as the Sundance and Cannes film festivals.
The actions by the talent agencies come amid growing tensions and skepticism throughout the entertainment industry that new contracts between the labor unions and the motion picture studios and TV networks can be negotiated in coming months.
United Talent Agency, which represents such stars as Jim Carrey and Harrison Ford, as well as TV's "Law and Order" creator-producer Dick Wolf, has taken the most aggressive steps. Effective this week, UTA's partners, board members and top-earning agents have agreed to contribute 20% of their salaries and bonuses to a company strike fund. The reserve is to help the agency avoid significant layoffs of lower-income employees should a strike occur.
"Obviously, a strike is an unfortunate event for everyone," said UTA partner Jeremy Zimmer. "And it's nice to know that as colleagues we not only share in the good times but are willing to face the challenges together as well."
Agencies are not direct participants in strike negotiations, yet they will be among the first to feel the effects of a work stoppage. The bulk of agency income comes from the 10% commissions agents earn on the movie and TV deals they negotiate for actors and writers as well as the more lucrative "package fees" they earn for TV shows they help put together.
In a prolonged strike, agencies will likely take more drastic measures, including across-the-board salary cuts and layoffs.
Also this week, the nine partners at Endeavor Talent Agency, whose clients include Adam Sandler and Dustin Hoffman as well as top TV show creators David E. Kelley ("The Practice," "Ally McBeal," "Malcolm in the Middle") and Aaron Sorkin ("The West Wing"), have agreed to set aside part of their pay as a strike reserve.
Endeavor's management also put a cap on agents' expense accounts, cutting monthly entertainment allowances by as much as 50% to 75%.
