Groundwork already laid for Saturday's talks

After several weeks of highly productive informal talks, insiders are optimistic that the Directors Guild of America will quickly hammer out a deal with the Alliance of Motion Picture and Television Producers once the formal bargaining on a new master contract begins Saturday.

DGA talks have taken on heightened significance in the context of the 11-week-old strike by the Writers Guild of America. Perception in the biz is that DGA has become the de facto negotiator for the WGA given the lack of communication between WGA and AMPTP since the latter broke off the last round of talks with writers on Dec. 7.

Late Friday afternoon, the WGA and the Screen Actors Guild seemed to caution observers against placing too much weight on the DGA negotiations.

“We wish the DGA well and hope that they achieve a fair deal that incorporates principles that will benefit all creative artists,” the guilds said in a statement. “The DGA has to do what is best for its membership, but it is important to remember that they do not represent actors and writers.”

AMPTP and DGA announced in a joint statement Friday that the sides would hold its first formal session Saturday at AMPTP’s HQ in Encino. The fact that talks are starting on a weekend is a sign of the urgency and the extra burden that the DGA has been saddled with in light of the deep freeze in relations between the WGA and AMPTP. The helmers’ talks will also likely set the template for AMPTP’s approach to SAG, with a contract expiring at the same time as the DGAs, on June 30.

Nobody’s saying it explicitly, but the vibe in the biz is that the deadline the AMPTP member companies face for breaking the stalemate with the WGA and getting the town back to work is dictated by the Feb. 24 Academy Awards. If the industry’s biggest and boldest celebration of itself is torpedoed by labor strife, as Sunday’s Golden Globe Awards already has been, many predict that the turmoil in showbiz could extend well into the second half of the year.

In an effort to avert such a doomsday scenario, DGA and AMPTP reps will sit down Saturday with much of the groundwork for a deal already hashed out thanks to extensive talks that DGA exec director Jay Roth and DGA negotiating committee chairman Gil Cates have held during the past few weeks with Peter Chernin, prexy of News Corp., and Robert Iger, prexy and CEO of Walt Disney Co. It’s understood that Chernin, Iger and other key AMPTP chiefs met Thursday for a update and strategy sesh on the DGA talks.

Both sides have been cautious about offering a timetable for the DGA talks, but insiders in the AMPTP and DGA camps indicated that a tentative agreement could be in hand as early as next week. Assuming Saturday’s talks are fruitful, it’s expected the sides will reconvene on Sunday. Both sides have agreed to a press blackout until the negotiations are concluded, AMPTP and DGA said in their statement.

Those with knowledge of the preamble talks were quick to laud the decision to channel those conversations through just a few people who were empowered to speak for their respective sides. It represented the kind of earnest and frank communication that was sorely lacking in the WGA’s fitful negotiations with the AMPTP, insiders said. In announcing its intent to move forward with its AMPTP talks, DGA prexy Michael Apted said in an note to members last month that it would only begin formal bargaining with the majors “if an appropriate basis for negotiations can be established” (Daily Variety, Dec. 14).

Moreover, the lack of fiery rhetoric and charged public commentary on the contract situation from DGA leaders made it a much more welcome environment for the top execs of key AMPTP member companies to become actively engaged in. Informed sources also were quick to point out that the DGA has spent a good deal of time and resources on researching the key issue at stake in the negotiations, namely how to compensate helmers when their work is distribbed on the Internet and on other new media platforms.

New media compensation has been at the crux of the WGA work stoppage. Insiders said the DGA is zeroing in on the same issues of ad-supported web streaming and paid digital downloads, but from a more measured perspective, aided by the guild’s own research into the financial underpinnings of the new media landscape today, and its growth prospects for the near term.

Sources close to the situation cautioned that the sides have not yet come to terms on the nitty-gritty of a deal and that there will be significant horsetrading and bargaining to get through starting on Saturday. But the two sides have agreed on what were characterized as the philosophical issues at stake in the contract that will cover DGA members for the next three years (the current DGA pact expires June 30). It’s expected that any new media formulas developed will include a sunset provision that will force the sides to reevaluate the terms in their next contract.

Insiders characterized the DGA’s position on new media as one of determination to address the issue of the current lopsided, or in some cases non-existent, compensation formulas, but realistic about what the congloms are willing to commit to in businesses that they don’t yet fully understand. One key point of concern for congloms has been the uncertainty about the long-term impact of web streaming and paid downloads of TV shows and movies on the old-fashioned profit centers of off-network syndication and homevid sales.

The hopes for the DGA talks coming to a quick conclusion are tempered by the doubts that the WGA will embrace the spirit of compromise that the DGA appears to be bringing to the table. The optimistic view is that a DGA agreement could provide a basis for the WGA and AMPTP to resume negotiations.

Meanwhile, another showbiz union agreed to postpone its skedded talks with the AMPTP for the sake of the greater good. American Federation of Television & Radio Artists said Friday it would postpone next week’s contract negotiations until next month so that the majors can focus on the DGA bargaining.

AFTRA said it agreed to a request by the majors on Thursday to hold off the start of its talks, on the condition that the AFTRA negotiations start no later than Feb. 19. It also said that it would extend the Jan. 31 expiration of the so-called network code portion of its contract — which covers a wide variety of TV programming — until March 7.

 “AFTRA’s priority is to negotiate strong wages, residuals, benefits, and working conditions for talent in all TV day parts and formats,” the union said. “The AFTRA Negotiating Committee members are mindful of current events in the industry, and their impact on our members as well as workers above and below the line in television. While AFTRA is ready to begin negotiations now, given the unsettled state of other talks already in progress, we believe we can best serve AFTRA members’ interests by briefly postponing our negotiations.”

It’s the second time that AFTRA’s extended the expiration of the net code. It bumped that date from Nov. 15 to Jan. 31 last year to allow negotiators to focus on the WGA talks.

Current contract, which expires Jan. 31, covers about $400 million in annual earnings from dramatic programs in syndication or outside primetime, daytime serial dramas, gameshows, talkshows, variety and musical programs, news, sports, reality shows, and promotional announcements. Notable programs include “Good Morning America,” “The View,” “The Price Is Right,” “Days of Our Lives,” “Oprah,” “Entertainment Tonight,” “American Idol,” “20/20″ and “Late Show With David Letterman.”

AFTRA prexy Roberta Reardon has said key issues will include the impact of new-media platforms, working conditions and health and pension benefits.

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