WGA, AMPTP take first swings

Gloves off in guild negotiations

The gloves have already come off.

Negotiations between Hollywood’s talent guilds and their employers kicked off Monday, with both the WGA and the Alliance of Motion Picture & Television Producers ramping up their PR campaigns and publicly unveiling their initial proposals on the Internet just a few hours after formally presenting them.

Each side then began taking potshots at the other’s proposals, painting them as unrealistic, unfair and out of touch. The AMPTP went first, asserting that today’s economics and audiences demand that the industry experiment, innovate and adapt to the “transformative changes that confront us.”

“Otherwise, we will suffer the consequences,” said the AMPTP, which has made revamping residuals the centerpiece of its demands. “We must change our mindset and our age-old ways of operating. Instead of helping us work toward solutions that would give us the flexibility we all need for the benefit of all, the WGA demands would impose unreasonable costs and Draconian restrictions.”

The Writers Guild of America responded by saying the AMPTP is singing the same old song of industry doom and gloom, along with blaming the writers.

“The conglomerates always try to paint us as unreasonable and bellicose,” the guild wrote. “Our proposals simply try to ensure that writers keep up with the industry’s growth. That’s fair and reasonable.”

As for the proposals, the AMPTP beat the guild by several hours in disclosing its official demands. The companies told WGA members they have two choices:

  • Maintain the status quo via a three-year contract that provides for a study centered on revamping compensation in order to figure out how to pay writers from revenues from the plethora of new-media platforms. Agreeing to the study would keep the current residuals system in place with increases in salary minimums to be negotiated.

  • If there’s no study on revamping compensation, the companies will play hardball and demand a four-year deal that will institute a recoupment-based residuals system — meaning that writers receive residuals only after companies have made back their basic costs of development, production and marketing.

The 33-page document also contains proposals certain to perturb scribes on several other fronts, such as eliminating the obligation to credit writers in publicity materials and amplifying restrictions on literary rights held by writers in order to “restore balance” in those dealings.

WGA leaders have already dismissed the AMPTP study proposal and the idea of a recoupment-based residuals system. The four-year term of the deal will also be anathema to the WGA unless it is sweetened considerably.

The AMPTP’s move appears designed to encourage rank-and-file WGA members and the rest of Hollywood to pressure WGA toppers to make a deal rather than go on strike. For its part, the WGA is attempting to portray the companies as putting the squeeze on writers at a time when showbiz is “healthy and expanding.”

The WGA posted its 26-item proposal list on its website early Monday night, including these key items:

  • spelling out pay and residuals for new media;

  • elevating pay for the CW network to network primetime minimums;

  • doubling the homevideo residual rate by expanding the revenue base subject to residuals to 40% of wholesale revenues;

  • expanding WGA jurisdiction to reality TV and all TV and feature animation;

  • specifying that writers be consulted on any use of product integration in TV and films;

  • and prohibiting companies from disciplining writers who cross picket lines of other showbiz unions.

But the guild left open the length of the new deal, which has traditionally been three years.

Monday’s session at AMPTP headquarters in Encino was limited to the presentation of the initial proposals. The two sides will take Tuesday off and reconvene Wednesday with official responses.

Moves underline the high stakes in the new round of labor negotiations for the town. And the opening-day wrangling is certain to give momentum to speculation that the WGA won’t be able to make a deal by the time its current three-year pact expires on Oct. 31.

In that scenario, what’s likely to happen is that guild leaders will tell members to keep working under terms of the expired deal in hopes that the Screen Actors Guild and/or the Directors Guild of America can negotiate better pacts by the time their contracts expire on June 30.

It’s also likely that the AMPTP will use the same approach in talks with SAG and the DGA, pushing them to either submit to a study and agree to a three-year deal with the current residuals in place or start negotiations with demands for a revamped residual system and a four-year deal.

In a reflection of the high stakes, it’s also the first time that proposals have been disclosed in a guild negotiation since SAG and the ad industry did so seven years ago. In that case, a six-month strike ensued.

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