It also includes a bevy of benefits for actors working on material created for digital distribution, such as residual payments for ad-supported streaming of feature films and television programs.
The agreement could bring about a major boost to businesses in Glendale and Burbank, where large portions of the workforce are tied into activity at local studios, said Don Nakamoto, labor market specialist for the Verdugo Workforce Investment Board.
Studios were hesitant to start new projects without a contract resolution because of the potential for a strike, which led to reduced spending on rentals, production space and actors, Nakamoto said.
A strike would have effectively shut down the entertainment industry, Nakamoto said, a danger that created a significant financial risk for studios willing to develop projects during contract talks.
With an agreement finalized, studios will now be able to sign so-called completion bonds, or contracts that guarantee films will be completed on time and on budget, Nakamoto said.
The union agreement was also expected help salvage worsening unemployment figures for the local film industry, which were depressed more than 25% as the contract dispute played out, he said.
As the effect of unfrozen projects began to ripple out across the industry, job numbers would likely rebound in late summer, he added.
The rebound couldn’t come soon enough for Jeff Stansfield, owner of Advantage Jewish Catering and Event Planning, which offers production catering and craft services for Warner Bros., Disney, HBO and Yahoo Music.
In November, Disney, HBO and Yahoo all canceled company parties planned for December, and sales over the last year and a half have been off $300,000, including $150,000 worth of lost business with Warner Bros. and $100,000 with Universal, Stansfield said.