Contract talks halted

Collapse of writers' negotiations stokes strike fears

Film-TV contract talks between Hollywood writers, studios and nets broke down Thursday after more than a month with no date set for resumption of bargaining.

A spokeswoman for the companies said negotiators for the Writers Guild of America have decided to suspend early negotiations. “We remain ready to negotiate at any time,” she added.

The collapse of talks will intensify the industry’s fears that the Writers Guild of America will strike when its contract expires on May 2, followed by a work stoppage by the Screen Actors Guild when its contract ends on June 30. Studios and networks have ramped up production over the past year in order to ride out such a scenario.

Both sides have scheduled news conferences for later Thursday to give further details of the negotiations, which launched Jan. 22. Negotiators have maintained a news blackout since talks started except for bare-bones updates at the end of each session.

The decision to ditch talks will likely make it harder to negotiate a deal before May 2. Observers had hoped the news blackout on talks was helping negotiators achieve progress but with this round failing, the situation may degenerate into a spin war that will force neutral parties to choose sides.

It will also give ammunition to those pessimists who believe studios are determined to provoke a strike to end unproductive producer contracts. “A strike is a great way for the studios to get rid of dead wood,” one agent noted. “Because of that, there’s so little incentive to make a deal right now.”

Furthermore, the end of this round may also damage the credibility of John Wells, the exec producer of “ER” and “The West Wing” who became WGA West prexy two years ago. Optimism surrounding the talks had been fueled partly because of Wells’ inside knowledge and clout to the table.

“In negotiations, leaders feel that they have to demonstrate that they’re willing to do whatever it takes to back that up, which means going on strike,” one veteran negotiator said. “It’s almost like if you don’t go out, you’re a sellout.”

The talks may have been doomed from the start due to the massive gaps between the two sides. CEOs accused the WGA in early January of seeking increases that would add $2.4 billion over three years in entertainment union costs; the WGA called the number “hyper-inflated” and said the three-year costs for writers, directors and actors would be $750 million.

There had been a brief burst of optimism in early February. Months of gloominess about the labor crisis had dissolved slightly due to the WGA’s decision to let the talks go past a two-week deadline, indicating that significant progress had been achieved.

But the WGA also made extensive demand to create new residuals formulas for cable, foreign and video/DVD. And its demand for increased “respect” through creative rights gains — guaranteed access to sets and elimination of the possessory credit on films — is believed to have made the talks more difficult, partly because of the strident opposition by the Directors Guild of America.

The WGA originally asked for $53 million more in annual residuals with nearly half of that — $25 million — going to video/DVDs through a doubled rate. The foreign residuals hike was for $17 million and some sources said the talks began collapsing late last week on that issue.

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