Gaps must be made by changing residual proposals

Leaders of the Writers Guild of America have declared that they will not close a deal with studios by meeting them halfway between the current gap in financial proposals.

“That’s not going to get it done,” said WGA West prexy John Wells in a briefing Friday about the suspended negotiations.

While insisting the two sides aren’t far from a deal, guild leaders made it clear they won’t simply split the current difference in proposals — a gap of either $82 million (companies’ estimate) or $102.4 million over three years (WGA estimate) — and finish off negotiations.

For the two sides to reach a deal, nearly all of the gap will have to be closed by making changes in current residuals proposals. Less than $11 million separates the proposals for base pay increases with the companies offering a $26.2 million hike and writers seeking $36.8 million. And WGA leaders insisted they have strong backing from rank-and-file WGAers, declaring that a strike authorization would have received near unanimous support at last week’s membership meeting. Meanwhile, reps for the companies insist their proposal is reasonable and that they are ready to resume talks.

Although WGA leaders have taken a cordial tack since negotiations fell apart March 1, the tough tone of the remarks indicates they plan to go to the mat over residuals when talks resume at a yet-to-be-set date next month. The writers’ strategy for the past year has been to stress the need to update outmoded residual formulas that originally contained discounts to help establish new businesses such as foreign TV, cable and video.

During the six weeks of negotiations, the WGA lowered total residuals demands from $161 million to $60 million; the companies offered no hikes in basic cable and video/DVD, have demanded a freeze on network primetime residuals and refused to match Fox residuals with those of ABC, CBS and NBC. WGA leaders also insist the companies’ “double-burst” plan for discounted reruns within 14 days amounts to a $31 million decline in residuals.

“This is not a lot of money,” noted WGA exec director John McLean, referring to the gap in proposals. “No one thinks our proposals are cataclysmic or naive. But it does involve a change in their culture where every time we ask for a residuals increase, they say, ‘That’s a strike issue.’”

McLean warned that the WGA may have to file a complaint with the Natl. Labor Relations Board over the alleged refusal by companies to disclose adequate foreign residuals info. He also disclosed that the WGA has asked for arbitration rights to determine actual value for residuals calculations on shows sold by a network to an affiliate.

$2 billion hit?

The companies claim they have offered a $30 million pay hike to the WGA, describing it as a “reasonable” offer, while insisting the “double burst” proposal is not a rollback. They have also characterized the Guild’s demands as “unrealistic given the current economic climate” and cite estimates that the combined economic impact of strikes by the WGA and the Screen Actors Guild would hit $2 billion per month in Los Angeles County.

But WGA research director Charles Slocum said the estimate –based on $1 billion in direct production losses and $1 billion in indirect losses — is too high since it does not reflect that the money will be spent at other times.

The leaders also said WGA members have closed ranks even in the face of the approaching May 2 film-TV contract expiration. WGAW secretary-treasurer Michael Mahern asserted that if a strike authorization vote had been taken during the meeting, it would have received better than 90% backing even though 55% of the voting members had joined since the 1988 strike and have never been through a work stoppage.

Mahern also asserted that younger WGA members have belied their Generation X slacker image by showing strong support for collective guildwide goals rather than individual gains.

Seeking a 2.6% gain

The WGA contends the companies’ last offer amounts to a $2.7 million decline, while its proposal calls for $99.7 million, or an industrywide yearly hike of $33.2 million, amounting to a 2.6% annual increase.

Warner Bros. would pay the largest yearly chunk at $6.16 million, followed by Fox at $4.88 million, Viacom at $3.95 million, Sony at $3.29 million and Disney at $3.14 million.

Universal leads the next tier with $1.57 million, followed by Studios USA at $1.16 million, CBS at $940,000, DreamWorks at $660,000, MGM at $630,000 and ABC at $350,000. Other smaller companies would pay a combined $5.29 million.

Wells also repeated earlier assertions that negotiators achieved significant progress on creative rights issues but stressed that any agreement would be part of a “total package” deal with the companies. He predicted the only deal that will work on the possessory credit for films is one that will leave members of the WGA and the Directors Guild of America unhappy.

The WGAW will host a negotiations briefing for agents tonight at its headquarters.

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