SO WHERE EXACTLY DO WE STAND? Will it be war or peace on the labor front?Old-timers cannot recall a time when Hollywood felt so vulnerable. Vacations are being canceled, offers on houses withdrawn, funds pulled out of the stock market. Everyone’s acting on rumor, not fact. And both management and labor seem eager to fan these apprehensions. So what’s really happening? Is it all a smoke screen? Is anyone talking to anyone else? The answer is yes … and no. Though the studios won’t admit it, all sorts of behind-the-scenes conversations are taking place. A four-member committee of CEOs has been meeting regularly to formulate strategy. There have even been contacts with the secretive Writers Guild of America West that at least one CEO termed “constructive.” Equally important, last week, after many delays, management finally turned over some data covering costs and revenues of TV series that were broadcast since 1992 — information the guilds need in constructing their demands. As a result, early talks between the writers and studios may become a possibility. Some cool heads are involved in the process. Ken Ziffren, the sage attorney, is representing DGA, SAG and AFTRA in assessing the residuals data. On the management side, such studio CEOs as Barry Meyer, Peter Chernin, Jonathan Dolgen and Jeffrey Katzenberg are in the forefront. All this is good news, right? Wrong. There’s a pervasive sense of foreboding on both sides. The writers and actors fear they’ll be offered rollbacks, not enhancements. Management fears rhetoric, not intelligent negotiation. Even those on the sidelines are gloomy. Some top agents think management may use this opportunity to attack TV commissions to the tenpercenteries, offering writers token concessions in return. “Two or three of the studios actually want a strike,” one industry veteran speculates. “That’s what worries me most. They’ve had a shitty year. Shutting down for six months and sending out some force majeure letters would come in handy.” Any truth to this? Not surprisingly, the studios won’t talk for the record, but one CEO concedes: “Look, most of us lost money last year on movies. A little vacation could have its advantages.” It could also pose its dangers. As the advertisers have discovered, once a strike starts, it’s no easy task to bring it to a close. After five months, an end to the Screen Actors Guild imbroglio finally seems near. Guild leaders also contend that the “poor-mouthing” by the studios is pure propaganda. Though domestic box office may be down slightly, the giant multinationals that own the studios are gleaning record numbers from TV sales and other ancillaries and the value of their libraries is increasing exponentially. BUT THERE ARE STILL OTHER SOURCES of angst. Some guild veterans fear war may break out between writers and directors over the possessory credit and other creative rights. Others fear that SAG’s renegade leadership will not synch up with the writers to present anything resembling a united front. Talk to the grizzled labor relations chiefs at the studios and you hear grunts of anger. Talk to the top people at the guilds and you sense growing militancy. The Writers Guild West, headed by John Wells, who’s as feisty as he is wealthy, insists the time is at hand to revise the generation-old formulas on U.S. and foreign residuals — deals made when cable TV was in its infancy and the market abroad was a modest affair. Despite the fact that Hollywood’s TV exports have a vastly more extended life overseas today, the basic formula for computing residuals has not changed since 1970, argues John McLean, the WGA chief who long worked on the management side. Jack Shea, president of the tough-minded Directors Guild, takes a similar line, adding that the newer networks like Fox and the WB should also increase their residuals payments. “It is our responsibility as leaders to make sure there is a fair deal without a disruption of our industry,” he asserts. While the DGA’s contract extends a year beyond that of the writers and actors, it is obviously watching the present maneuverings with keen interest. BUT WHEN WILL THE GAME OF CHICKEN end and real negotiations begin? Management “fast-tracked” negotiations with the writers in former years but that phrase is now frowned upon and there’s no definitive sign that discussions will commence before late winter. By then a de facto strike will already be in full swing: The studios and TV shows are shooting everything they can over the next four months so they won’t be caught in midshoot if strikes commence. The guilds also are sensitive to the fact that both studios and networks are stockpiling scripts — indeed, the WGA’s Wells is urging members to resist this parlay. Meanwhile tensions rise as the networks hammer out contingency plans, studios prep layoff lists, talent agencies try to set up strike-proof reality shows at the networks, and restaurants and retailers hold their breath. “It’s the little people who will get clobbered,” says one veteran writer. “The fat cats will play golf, but the people who are merely making a living will stop making a living. It’s going to get ugly.” He’s wrong on one point. It’s already getting ugly.
Follow @Variety on Twitter for breaking news, reviews and more