ACTORS REJECT AGENT DEAL SAG VOTE A DEFEAT FOR UNION LEADERSHIP.

Byline: Greg Hernandez Staff Writer

After weeks of drama, the membership of the Screen Actors Guild voted down an agreement between the union and the Association of Talent Agents that proposed to relax decades-old financial interest rules, SAG officials announced Friday night.

The controversial proposal failed by a margin of 54.4 percent to 45.5 percent despite heavy lobbying for its passage by SAG President Melissa Gilbert and the endorsements of many high-profile actors. Those opposed to the deal were effective in taking their message to the guild's 98,000 members, less than 30 percent of whom are represented by talent agents.

In all, 25,695 SAG members cast ballots, with 13,977 voting no and 11,680 voting yes. Thirty-eight of the ballots were deemed invalid.

With the proposal voted down, the future working relationship between the agents and the guild is unclear. SAG's national board is scheduled to meet this weekend to discuss that and other issues.

If the proposal had passed, financial interest would have changed to allow talent agencies the opportunity to invest in a film or television production and for ad agencies, advertisers and independent producers to own up to 20 percent of talent agencies. Agents would also be allowed commissions on residual payments their clients receive for DVD and home video releases.

In exchange, there would have been significant financial assistance to the actors' health plan funded by agents' contribution to an Actor Benefit Fund, enhanced bond protections against theft of actor funds and increased job opportunities for SAG members through a new actor-agent partnership with the implementation of Global Rule One, which prohibits SAG members from working in nonunion productions outside the United States.

Proponents of the proposed three-year ``franchise agreement'' have predicted chaos if the agents become deregulated. But opponents to the SAG-ATA proposal have maintained that there are already enough state regulations to keep the agents in check.

In stumping for the agreement, Gilbert said the proposed franchise agreement was the best way for SAG to have some control over the changing business dynamics of the entertainment industry.

SAG Treasurer Kent McCord has blasted the proposal, saying the only motivation that the agent has is to get his talent the best deal possible and that passage of the agreement would set up an untenable conflict of interest between the actors and the people they trust to represent their interests.

The vote came after SAG's national board had given only tepid approval to the proposal last month, voting 57-44 to send the matter to SAG members for consideration. The deep divide between the two factions had led to weeks of extremely bitter infighting that resulted in Gilbert and others publicly calling for at least some measure of civility.

The comments got personal, sign-waving protests were staged in front of SAG headquarters and A-list actors publicly took sides. Even the images of dead SAG members were used in advertising against the proposal, drawing a strong rebuke and threat of legal action from the family of founding SAG member Boris Karloff.

SAG's Hollywood board - which is largely against the proposed agreement - voted to censure Gilbert because of a telemarketing campaign she conducted that drew complaints from some members who objected to being lobbied at their homes. The 19-6 vote to censure by the board carries no official weight but it was further indication of the increasingly bitter chasm between the two factions.

Opponents of the proposal complained they were not given equal resources and opportunity to present their side to the guild's membership.

The agreement would have gone into effect July 1. The previous franchise agreement expired Jan. 20.