Screen Actors Guild members turned down a new agreement late Friday governing relations between agents and actors that would have allowed investments by advertising companies and producers in Hollywood talent agencies.
With nearly 55% voting to reject, members sided with those who argued that the proposal would blur the line between agent and employer. It would create conflicts, they said, because an agent might represent an actor in a movie, for instance, in which the agent's company had a financial interest. The agent, therefore, might not act in the client's best interest.
Opponents included Richard Dreyfuss, Rob Schneider, Charlton Heston and Jason Alexander.
The result is a major defeat for SAG leadership, which had marshaled its staff and numerous stars in support of the proposal.
Led by President Melissa Gilbert, SAG had argued that the proposal included numerous safeguards and other sweeteners that would bolster the union's sagging finances. Supporters included Danny Glover, Helen Hunt, Kevin Spacey, Annette Bening and "West Wing" cast members Martin Sheen, Rob Lowe and Bradley Whitford.
In a statement, Gilbert said: "SAG's mandate remains unchanged. SAG will continue to do what is in the best interests of all guild members."
Only about 30% of SAG's 98,000 members even have agents, but all members were allowed to vote under the union's rules. The final tally was 13,977 to 11,680.
At stake was a new "franchise agreement" between agents and the union to replace an expired one that had been in place since 1939 largely to protect actors from unscrupulous agents. Agents who want to represent a SAG actor must agree to abide by the agreement, which governs such matters as commissions, financial interests for agents and other items.
The rejection of a new agreement throws the relationship between actors and agents into confusion.
Theoretically, agents are no longer bound by any agreement and could sell themselves to companies involved in production or invest in producers themselves. But realistically they might face a backlash from stars they represent.
Indeed, executives at talent agencies privately said Friday that they don't expect anything drastic to happen soon, adding that most agencies will study their options carefully over the next few months before making any moves.
In a statement, the Assn. of Talent Agents and the smaller National Assn. of Talent Agents trade groups strongly suggested that their members will do what they want and may take legal action if SAG tries to stop them. The groups accused a minority opposition group of sabotaging the deal "by disseminating inaccurate and irresponsible information."
They added: "We have waited patiently while the SAG leadership has changed hands three times and squandered countless opportunities for their working membership."
They said that they will look for "the most expansive creative and economic opportunities available."
The debate caused a bitter split in an already fractious guild. SAG has been beset by internal bickering between moderate and more confrontational forces for three years.
During one meeting this month to discuss the proposal, members objected to the presence of security guards, calling them intimidating. A board of local Hollywood members censured Gilbert for a telemarketing campaign to support the deal.
Arguing that they are unfairly hamstrung by the rules, agents for more than two years have pressed for a new deal.
They say they need fresh capital to expand their businesses, and should be allowed to diversify into such areas as modeling and sports agencies, public relations or foreign film distribution.
Agents argue that such deals would create jobs for clients by giving the firms a shot in the arm financially, as well as forming alliances that would create projects.
The deal agreed to in February would have allowed advertising agencies, major advertisers and even independent production companies to buy as much as 20% of a talent agency.
In addition, agencies for the first time could have owned as much as 20% of the production companies that make movies and TV shows. Studios and their parent companies would have been barred from buying into an agency.
The deal was advocated by the Assn. of Talent Agents, with Hollywood's largest agencies--Creative Artists Agency, International Creative Management, the William Morris Agency, United Talent Agency and Endeavor--the major forces behind the new agreement.