Worldwide Pants deal with WGA helps CBS

The competition in latenight ratchets into another dimension this week, as the network mainstays return in an unprecedented haves and have-not scenario.

CBS’ “Late Show With David Letterman” and “The Late Late Show With Craig Ferguson” go back on air with original segs tonight with their writing staffs intact, thanks to an interim agreement Letterman’s Worldwide Pants production banner inked with the Writers Guild of America on Friday.

NBC’s cash cow “The Tonight Show With Jay Leno” and “Late Night With Conan O’Brien” and ABC’s “Jimmy Kimmel Live” are back, but without their writing teams. All five shows have been in rerun mode since the WGA went on strike Nov. 5.

Comedy Central’s “The Daily Show With Jon Stewart” and “The Colbert Report” are due to return Jan. 7 sans scribes.

Letterman had the advantage of being able to cut a side pact with the guild because he owns “Late Show” and “Late Late Show” outright, which distinguishes him even from primetime’s top hyphenates (who at best have large profit participation stakes) in being able to control the destiny of his shows.

Given the impasse in contract talks between the WGA and Alliance of Motion Picture and Television Producers — who have not been at the bargaining table for nearly a month since the AMPTP ended the last round — there’s been much speculation in the biz about whether Letterman will be able to make long-term inroads against “The Tonight Show’s” ratings dominance if the strike persists.

The CBS shows’ advantage will lie not only in the strength of their scripted bits but also in the ability to book top guests who may be reluctant to cross picket lines to do Leno, O’Brien or Kimmel.

The Screen Actors Guild, which has been a staunch supporter of the Writers Guild work stoppage, responded to the Worldwide Pants-WGA pact by urging its members to support Letterman and Ferguson and forgo their competitors until the strike is settled.

Letterman’s first show back tonight will feature Robin Williams, who has been on WGA picket lines in Gotham, and musical guest Shooter Jennings. Thursday’s edition of “Late Show” will feature Bill Maher, “Juno” star Ellen Page and cast members from Rialto hit “Young Frankenstein”; Friday’s lineup features Donald Trump and rapper Lupe Fiasco.

There was still no word Tuesday on the final plans for “The Tonight Show’s” first outing, but tonight’s show is expected to feature GOP presidential hopeful Mike Huckabee. There was no word on O’Brien’s or Kimmel’s plans.

Industry insiders said the skeins without writers will likely lean toward guests with human-interest stories, how-to demonstrations and possibly live remote reports from the field. Some observers note that an all ad-lib environment from three experienced comics could make for compelling viewing “while they’re working without a net,” one Big Three network programming exec observed.

Although Letterman and Ferguson are well positioned by the WGA-Worldwide Pants deal, CBS was still muted in its response to Friday’s news. The Eye’s parent is one of the key AMPTP member congloms that have balked at many of the WGA’s contract demands and questioned the motivations of guild leaders.

Worldwide Pants CEO Rob Burnett, an exec producer of “Late Show” and a WGA member, said it wasn’t tough to make a deal with the guild. The pact was negotiated by Burnett, longtime Letterman attorneys Jim Jackoway and Alan Wertheimer and WGA leaders including WGA West prexy Patric Verrone and exec director David Young.

“I found the guild straightforward and easy to deal with,” Burnett told Daily Variety. “It was a big decision, so it took an appropriate amount of time.”

The WGA issued a statement Friday confirming the agreement, citing the deal as proof that its demands aren’t unreasonable. It helped that Worldwide Pants is a dramatically smaller company than the key AMPTP congloms and will not be as widely affected by the new contract as Hollywood’s majors. Worldwide Pants even agreed to the guild’s bid to lock in jurisdiction for reality and animation production — lightning rods in the guild’s talks with studios. For Worldwide Pants, that’s likely to be a negligible commitment, given its lack of activity in the reality or animation genres to date.

“This is a comprehensive agreement that addresses the issues important to writers, particularly new media,” the guild said. “Worldwide Pants has accepted the very same proposals that the guild was prepared to present to the media conglomerates when they walked out of negotiations on Dec. 7. Today’s agreement dramatically illustrates that the Writers Guild wants to put people back to work, and that when a company comes to the table prepared to negotiate seriously, a fair and reasonable deal can be reached quickly.”

The AMPTP discounted the signficance of the deal covering about three dozen scribes in the larger picture of the strike that has idled thousands of working WGA members.

“While it is good news for viewers that the jokes will be back on the latenight shows, the biggest joke of all appears to be the one the WGA’s organizers are pulling on working writers,” the AMPTP said in a statement. “The people in charge at WGA have insisted on increasing their own power by prevailing on jurisdictional issues such as reality, animation and sympathy strikes. Yet today, the WGA made an interim agreement to send writers back to work that by definition could not have achieved these jurisdictional goals — gains that would at a minimum require the company making an agreement to actually produce reality and animation programming.”

The big question surrounding the Worldwide Pants pact concerns the specifics of the new-media terms of the deal. Compensation for work distribbed via Web streaming and through paid digital downloads has been the flashpoint in the WGA-AMPTP talks.

The guild maintains that the majors have so far refused to consider proposals that will give scribes a “fair” cut of new media revenue. Studios maintain that new media biz is still in its infancy and has yet to produce the level of profits that can support the residual fees sought by the guild.

Worldwide Pants reached out to the WGA for an interim agreement shortly after the strike began on Nov. 5. The guild only recently engaged in talks with the banner, after making the strategic decision to seek individual talks with AMPTP member companies. Even then, it had been thought Worldwide Pants wouldn’t be able to cut a deal because CBS controls the new-media rights to Letterman’s shows. However, as the studio that produces the shows, Worldwide Pants “is responsible for paying residuals to our writers” for Internet use of said shows, Burnett said.

The Eye drew just such a distinction in a statement it issued Friday night.

“CBS controls the Internet exploitation rights for both programs and will comply with any eventual negotiated agreement between the AMPTP and the WGA,” it said.

The Worldwide Pants pact likely includes a “favored nations” clause that would allow the company to alter its contract, should the WGA cut a deal at more favorable terms with the major studios.

WGA did not provide details of the new media formula to which Worldwide Pants agreed. In its previous counterproposal to the majors, the guild was understood to have proposed a residual for Internet streaming of full-length episodes that would be based on a percentage of the existing broadcast minimum, with additional compensation coming after every 100,000 views of a program. The AMPTP’s most recent proposal, by contrast, offered a percentage-based residual for a year’s worth of Web streaming that worked out to about $250 for an hourlong episode, and after that, a residual of 1.2% of the applicable license fee received by the production entity.

Burnett said he would leave it to the WGA to discuss deal specifics.

“In the broad strokes, I will say that Worldwide Pants has always been a very writer-friendly company,” Burnett said. “We had no problem agreeing to the demands the WGA has.”

In a letter to members, WGA leaders acknowledged that the deal with Letterman meant some latenight scribes would be returning to work next week, while others would remain on the picket lines. But it said the Letterman deal was a necessary part of the guild’s broader bid to increase pressure on the majors by negotiating with individual companies.

Picketing resumes today for the first time since Dec. 17 and on the West Coast, NBC’s Burbank compound will be the sole focus of the WGA’s picketing, from 8 a.m. to 6 p.m. WGA East prexy Michael Winship distributed a letter to members on Tuesday saying that the focus of guild picketing efforts would be the latenight shows returning without writers.

“Companies who have a WGA deal and guild writers will have a clear advantage. Companies that do not will increasingly find themselves at a competitive disadvantage,” the guild wrote.

WGA also made it clear that it doesn’t matter that Leno and the other hosts can’t negotiate their own deals like Letterman did. Their shows will now be key to the WGA’s strike strategy.

“Our strike pressure will be intense and essential in directing political and SAG-member guests to Letterman and Ferguson, rather than to struck talkshows,” declared the WGA, saying picket lines in front of the NBC shows “are essential.”

Burnett conceded that Worldwide Pants’ shows will now have a competitive advantage, but he quickly added, “I’d give it up in a second if it meant everyone could come back to work.”

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