Guild leaders could hold off until next week

As might be expected from showbiz writers, the WGA is probably going to push back its deadline.

The emerging consensus is that WGA leaders won’t start a strike until next week at the earliest — even though the town’s been fretting in recent days that scribes could walk out at 12:01 a.m. Thursday, when the current contract expires.

Both sides resumed negotiations Tuesday after a three-day break, as the town became utterly enveloped by fears of a strike hitting as early as this week. Talks recessed in the early evening and will resume Wednesday morning, with WGA set to present a new comprehensive proposal.

The town’s strike fears have been fanned by a variety of troubling signals — continued combative rhetoric from both sides, lack of progress at the bargaining table, battles over guild strike rules, the Teamsters’ pledge not to cross picket lines and strike preparations by the WGA.

Additionally, companies are crying “foul” over a new flyer distributed by writers, claiming an eleventh hour rollback in pension and health fund contributions was submitted by studios. In fact, the studios and networks withdrew their major rollback proposal on residuals two weeks ago.

And the WGA’s rhetoric has aroused animosity from other guilds, who point out the WGA has negotiated in an atmosphere of isolation. There has been zero contact with the DGA in recent weeks, insiders point out.

The WGA has given several recent indications it’s ready to strike — staging leafleting outside studios Tuesday morning, setting a membership meeting Thursday night and telling strike captains to be ready to picket Friday morning. But waiting a week to 10 days to go on strike has several advantages for the WGA:

  •  During that period, the WGA’s leverage at the bargaining table will be at its maximum since there will be an actual strike threat when negotiations take place.

  • Holding off on striking immediately will be good for the WGA’s public image. The guild will seem somewhat reasonable, rather than rash, especially with federal mediator Juan Carlos Gonzalez having just joined the talks Tuesday.

  • A delay will give writers, many of whom have been scrambling to wrap up projects by today’s deadline, badly needed extra time to put finishing touches on feature and TV scripts.

Jonathan Handel, a former WGA counsel who’s an entertainment attorney at the TroyGould law firm, believes striking right away — either on Thursday or Friday — would be a PR disaster for the WGA.

“It’s necessary for the guild to appear that it’s operating in good faith at negotiations,” he said. “If they were to strike in the next three days, the mediator would read them the riot act. A high-profile labor negotiation is a lot like a high-profile lawsuit in that a lot of it gets played out in the public arena.”

Both sides have blasted each other for the lack of discernible progress during three months of negotiations. The WGA’s accused the Alliance of Motion Picture & Television Producers of resorting to scare tactics and coming to the table with 72 rollbacks; AMPTP president Nick Counter has contended the guild’s leaders are stonewalling, strike-happy and unwilling to recognize the impact of new media.

“We will not agree to any proposals that impose unreasonable restrictions and unjustified costs,” Counter said Tuesday. “We will not ignore the challenges of today’s economic realities, the shifts in audience taste and viewing habits and the unpredictability of still-evolving technology.”

Veteran showbiz labor attorney Norman Samnick of Bryan Cave believes the WGA won’t get serious about negotiating until Thursday — when it has an actual strike threat.

“It feels like the WGA’s just going through the motions,” Samnick added. “I’ve been dealing with them since 1973, and this is the first time that they have not bargained.”

Labor attorney Ivy Kagan Bierman of Loeb & Loeb said Gonzalez can move both sides past posturing. “He can get them to stop talking in broad generalities and rhetoric,” she said.

Samnick contended the presence of Gonzalez is a plus in terms of giving both sides the ability to assert they made every effort to reach a deal. “Having a mediator is very useful in terms of explaining to your constituency that you didn’t cave in,” he added.

As for what’s at stake at the negotiating table, a significant number of issues offer daunting challenges — particularly since much of the time’s been devoted to presentation of the proposals rather than actual negotiation.

The key issues:

Homevideo residuals. The WGA’s seeking a doubling of the base rate for calculating payouts, from 20% to 40%; the AMPTP’s resisting. Handel believes the WGA’s put so much stock in this issue that it will achieve an increase to 25% or 30%; Samnick predicts the companies won’t give in, since the increase would have to be included in the new pacts for the DGA, SAG and IATSE.

New-media residuals. The WGA’s seeking 2.5% of receipts, while the AMPTP wants to expand the definition of Internet residuals, which are currently set at 1.2% for limited use, with the homevid formula for permanent use. “I think this may be the single toughest issue to resolve,” Bierman said.

Made for new media. The WGA’s seeking jurisdiction, with TV minimums applying — pro-rated in one-minute increments with a two-minute floor — with residuals paid for even the first use. The AMPTP’s asking for the status quo, which includes pension and health contributions.

Promotional use. The WGA’s asking for residuals on any use of streaming video; the AMPTP’s put up especially strong resistance, asserting promotional use of its property is essential to keeping the biz healthy and for maintaining TV audiences.

Reality TV. The WGA’s asking for coverage of reality, and the AMPTP’s resisting. The WGA has insisted that this remains a key issue, but its strike rules don’t bar members from working in reality. “The Guild has signaled it will not press this issue,” Handel said. “I think reality is dead as a matter of WGA jurisdiction.”

The CW. The WGA’s seeking network minimums and residuals for the CW, while the AMPTP wants to keep the current lower rates. Handel believes little increase is likely, though some kind of intermediate rates — much like the gradual rate increases granted for work done for Fox in the 1990s — could be imposed.

Term of the agreement. The WGA is seeking three years, and the AMPTP wants four. Handel believes it will be a three-year deal to keep the WGA expiration aligned with the DGA and SAG deals — both which expire June 30.

After Tuesday’s session concluded, the WGA announced, “No significant progress was made.”

“At 4:30 PM, we informed the AMPTP that we would prepare a comprehensive package proposal for their review today. At 6:45 PM, we told them the proposal would be ready in 15 minutes. Management negotiators responded by saying they preferred to leave for the day and hear our proposal tomorrow, the expiration date of our contract.”

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