MUMBAI: In order to avert a situation that would have narrowed into a strike, the kind that had paralysed the American entertainment industry for over 100 days two years ago in 2008, Hollywood actors‘ unions and major studios reached a new, three-year contract.

The deal, that provided a six-per cent pay raise and a 10 per cent increase in contributions to the unions‘ health and pension plans, comes into effect from 1 July. 

The understanding, though, came about after six weeks of negotiations between the Screen Actors Guild (SAG), the American Federation of Television and Radio Artists (AFTRA) and the Alliance of Motion Picture & Television Producers (AMPTP).

"The deals offer increases in benefit contributions, wages and other areas critical to working performers while being responsive to the current challenges facing feature film and television producers," the AMPTP said in a statement.

In 2008, the inability of actors and producers to clinch a deal led actors to work without a contract for a year. It followed a strike by the screenwriters that became the country‘s entertainment industry‘s most damaging dispute in 20 years.

"Strengthening the pension and health plans was our top priority in these negotiations -- making such a significant gain in that area was a vital achievement," said SAG president Ken Howard. "We had to make some difficult decisions, but working together, we?ve reached a deal that will protect our essential pension and health benefits for years to come," he added.