Hollywood actors, studios head for labor limbo (Reuters)

LOS ANGELES (Reuters) - Hollywood actors and studios held a final day of labor talks on Monday before their contract was due to expire, but the midnight deadline was expected to pass with neither a settlement nor a strike.

Barring a last-minute breakthrough, the two sides are headed for a new realm of uncertainty as of 12:01 a.m. Tuesday, when the contract covering movie and prime-time television work for 120,000 members of the Screen Actors Guild runs out.

The labor talks, which began in April, have hit some of the same stumbling blocks that led Hollywood writers to walk off the job months ago, including clashes over how union talent should be paid for work created for the Internet.

Both sides have accused the other of foot-dragging.

"Its pretty astounding that people dont seem to know whats going to happen, and Ive spoken to some of the negotiators," said Hillary Bibicoff, a partner with Los Angeles law firm Greenberg Glusker.

Film production by major studios has ground to a near halt in anticipation of a possible work stoppage, though SAG leaders have downplayed the likelihood of a walkout, which would require a 75 percent vote by SAG members and take weeks to organize.

"We have taken no steps to initiate a strike authorization vote," SAG President Alan Rosenberg said in a statement on Sunday. "Any talk about a strike or a management lockout at this point is simply a distraction."

SAG also has signed special waivers with over 300 independent producers allowing actors to continue working for those companies in the event of a strike. Production on many TV shows has plowed ahead as well.

A HOLLYWOOD LABOR CLIFFHANGER

Still, Mondays editions of Daily Variety and The Hollywood Reporter carried full-page studio ads saying a strike would be "harmful and unnecessary," citing 2.3 billion in lost wages from the 14-week writers strike that ended in February.

With little progress reported at the negotiating table over the weekend, it is unclear what will happen next.

SAG and the studios bargaining agent, the Alliance of Motion Picture and Television Producers, could agree to formally extend the contract while they keep talking.

However, Hollywood insiders said SAG had yet to seek an extension as of midday on Monday, and the studios seemed disinclined to approve one -- a stance that would leave them free to present a "last, best and final" offer to SAG.

SAG leaders could then accept that offer, reject it or submit it to union members for a vote.

A rejection would allow the studios to impose terms of their final offer, and SAGs only recourse at that point, besides capitulation, would be a strike.

Many experts believe little of substance is likely to occur before July 8, when SAGs smaller sister union, the American Federation of Television and Radio Artists, tallies ballots in a ratification vote for its own tentative TV contract.

SAG has launched a campaign to persuade its 40,000 members who belong to both unions to vote "no" on AFTRAs pact, saying it is flawed and undermines SAGs position.

A "yes" vote, SAG argues, increases the odds it will need to resort to a strike. AFTRA claims a "no" vote makes a strike more probable because a better deal for actors cannot be achieved without a work stoppage.

The rival unions have enlisted various stars to support their cause. Tom Hanks is among those flying the flag for a "yes" vote, while Jack Nicholson has sided with SAG leadership, and George Clooney has declared that both sides are right.

The last time Hollywood actors staged a strike over their main film and TV contract was in 1980, a three-month walkout to establish terms for pay-TV and video cassette production.

(Additional reporting by Dean Goodman)

Reuters/Nielsen