SAG Award winners: The cast of ABC's "Modern Family" at… (Kirk McKoy / Los Angeles…)
The cast of"Modern Family"has an ancient problem.
In the television industry, actors typically sign contracts that range from five to seven years with annual pay increases of 4% to 6%. The compensation can range from $40,000 to $70,000 per episode to more than six figures for established stars.
On its face, that doesn't sound so bad. But in the rare cases of a huge commercial hit, the companies that produce and air the show get a big and quick return on their investment. Then their headaches begin — with the actors.
That is what is happening behind the scenes ofABC'sEmmy-award winning hit comedy "Modern Family."
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On Tuesday several key cast members filed suit against the show's producer, 20th Century Fox Television, in an effort to void their contracts. The actors who initially filed the suit in Los Angeles County Superior Court on Tuesday are Sofia Vergara, Jesse Tyler Ferguson, Eric Stonestreet, Julie Bowen and Ty Burrell. Ed O'Neill, another star on the show, subsequently joined their effort.
Motivating the stars is that ABC is raking in hundreds of millions in advertising revenue and 20th Century Fox Television has already sold reruns of "Modern Family" to the cable channel USA for $1.5 million per episode.
"It's a pretty natural instinct among actors who see the money flowing in to the network and the studio to want their share," said Sandy Grushow, chief content officer of consulting firm MediaLink and a former head of both 20th Century Fox Television and Fox Broadcasting.
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Although contracts are often renegotiated before their expiration date, the cast of "Modern Family" took their beef to a new level by going to court to try to break their current contracts, which still have four seasons to go.
"I do not remember lawsuits springing from these situations," said Tony Jonas, a producer and former head ofWarner Bros.Television who was involved in high-stakes contract negotiations with the casts of "Friends" and "ER." "Obviously there is a lot of saber rattling going on."
Filing a suit may also put 20th Century Fox in a less friendly mood to renegotiate the actors' deals.
"I'm not a fan of scare tactics," said Jeff Gaspin, a former chairman of NBC Entertainment.
In the suit, the actors claim that their agreements violate California law prohibiting deals that run more than seven years. The contracts expire at the end of June 2016, but all were signed before June 2009.
The legal move was also seen as preemptive in case the studio sued the actors for breach of contract after most did not show up to work Tuesday for a script reading. The cast, however, is expected to be at a reading scheduled for Thursday.
Many were caught by surprise by the turn of events since 20th Century Fox was offering more money in return for contract extensions beyond seven seasons.
The latest offer to Vergara, Ferguson, Stonestreet, Bowen and Burrell bumped their pay from the roughly $65,000 per episode they made last season to $150,000 for the upcoming season, according to two people familiar with the matter who were not authorized to speak publicly. There were also large increases beyond next season. O'Neill, an established TV star, already makes more than $100,000 per episode, but he too wants a new pact.
That the cast is banding together will give it some leverage over the studio.
"There is strength in numbers," Gaspin said.
Jonas recalled when the cast of "Friends" decided to negotiate as a team to putWarner Bros.in a bind. "That was a smart move," Jonas said, because the studio was reluctant to try to play the cast members against one another. "That's a very unpleasant thing to do."
For now, ABC executives are sitting on their hands to see how this works out. But when a new deal is reached, the next thing 20th Century Fox will do is try to renegotiate the fee that ABC pays for the show.
Despite all the vitriol, Grushow thinks there is too much at stake for a new agreement not to be struck soon.
"20th is going to end up paying more than they hoped to, the actors will get less than their agents told them they were worth, and there will be hugs and kisses all around at the Emmys," he predicted.