Contract talks approaching
This is going to be “a stressful year.”That’s CBS topper Leslie Moonves‘ early take on the looming contract talks between Hollywood producers and the major guilds — even if there isn’t a strike. The triennial negotiations with the three major guilds get under way July 16 when talks between producers and the Writers Guild officially begin. Bargaining with the Directors Guild and the Screen Actors Guild (whose contracts expire next June) will follow — possibly as early as the fall. Both sides ramped up their charm offensive with the press last week, spelling out what initially appear as irreconcilable differences on key issues. The guilds make no bones about what they want. Key among their demands, the WGA wants its members to have a cut of any work written for new-media platforms. For producers, that’s a non-starter. Even though consumers are increasingly turning to online sources for programming, that content often carries little or no advertising. Briefing journalists last week, execs at the studios and nets who are AMPTP signatories unveiled their opening salvo: Contending that the entire economic model on which residuals are based is outmoded, they proposed a joint study to better assess the life cycle of content — and how to fairly compensate those who have a stake in it. “These businesses are so new that we don’t know if they’re sustainable,” says Anne Sweeney, prexy of ABC Television Group. “The world is changing, we are changing and the guild agreements are going to have to change as well.” For its part, the Writers Guild has already waved off the suggestion of a study as merely a stalling tactic. The guilds are still smarting from having been denied bigger cuts of DVD revenues in 2004 as that new ancillary stream peaked. The talks come at a time when Hollywood movies and TV shows are dominating screens large and small around the world, breaking records in almost every revenue category. But the AMPTP is quick to point out that costs to produce content are spiraling, too, noting that average B.O. revenues last year didn’t even cover half the pics’ average costs. “It’s not business as usual any more,” says Warner Bros. Entertainment topper Barry Meyer. So, will it all come down to a strike — or several? Unless the Guilds are willing to opt for a study, AMPTP prexy Nicholas Counter has already warned that there could be three strikes in a row. And, he adds, in his 25 years as head negotiator for the congloms, he’s never been this pessimistic — and he’s even more so than in 1988, when the WGA struck for five months, delaying the start of the fall TV season.