The producers had a short answer: no. In fact, they were desperately looking for ways to cut production costs, not increase them. Between 1946
and 1959, domestic movie attendance plummeted over 65 percent as more and more Americans chose to stay home and watch television. As a result, the movie
industry was in a tailspin and hemorrhaging money.
So the producers dug in. Any talk of residuals, past or future, was simply a nonstarter. The producers took a hard line because they knew that if
they acquiesced to actors, they would probably have to make similar deals with both screenwriters and directors.
But the actors were firmly committed to their cause and, in the fall of 1959, they voted to return Ronald Reagan to the SAG presidency to spearhead the
The talks began in January 1960 with the two sides a great distance apart. The producers refused to even talk about residuals. They put forth a simple
and compelling question: Why should any employee be paid more than once for the same job?
Reagan could not get them to budge. He joked that he was simply "trying to negotiate for the right to negotiate."
In February, Reagan upped the ante. He asked the SAG membership for a strike authorization. The actors agreed and a work-stop date was set: Monday,
March 7th. The producers were convinced the actors were bluffing. In the 50-year history of Hollywood, there had never been an industry-wide strike.
The producers underestimated the resolve of Reagan and his negotiating team. On March 7th, 1960 the actors did what they said they would: They walked
off their respective jobs and production at all the major studios ground to a halt.
In the tense days following the walkout it was the studios, not the ex-sportscaster, who first blinked. Universal Pictures agreed, in principle, to the
concept of film residuals. Eventually the other majors (Paramount, Disney, Warner Brothers, MGM, Columbia, and 20th Century Fox) fell in line and
finally began negotiating the "non-negotiable" issue.
After five acrimonious weeks of intense back-and-forth, the two sides reached a compromise. It contained three parts:
- Actor residuals for all studio films made starting in 1960.
- No residuals for any studio films produced before 1948.
- In lieu of residuals for films made between 1948 and 1959, the producers agreed to a one-time payout of $2.25 million, a contribution SAG
would use as seed money for a new union health insurance plan and a pension plan.
It wasn't everything the actors desired but, on April 18, the SAG membership voted to accept the offer and return to work. The final tally was 6,399
The strike was over, but some actors were furious with the deal. Stars like Mickey Rooney, Glenn Ford, and Bob Hope believed SAG could have gained
retroactive residuals for all films if Reagan had been tougher and held out longer. They felt Reagan and the SAG board had "screwed" them and derided
the compromise as "the great giveaway."