Negotiators for showbiz writers and studios recessed contract talks until Wednesday, following an exchange of proposals Sunday evening.

The announcement came at about 9 p.m. PDT Sunday after talks were suspended so that both sides could study each other’s latest proposals.

Neither side issued further details, adhering to the four-week old news blackout.

The development followed a full day of talks at the Writers Guild of America West headquarters in Hollywood in the wake of the expiration of the contract at 12:01 a.m. Sunday.

Speculation emerged that major issues remained unresolved and that negotiators may need several more days to reach a tentative deal. Observers noted talks at this stage often are lengthened by the need to contact studio and network execs — who have not been attending the negotiations — as details of key deal points change.

But the expiration of the contract also means relatively little time is left to make a deal. Reps of the Alliance of Motion Picture & Television Producers want to make a deal soon to avoid disrupting feature development and production, as well as the TV networks’ need to set fall schedules by mid-May.

Provisions of the expired WGA contract remain in effect even though an extension agreement had not been signed. That means the 12,000 guild members should keep working if employed unless and until a strike order is issued.

In recent days, work has continued despite some nervousness over the outcome of the talks. Observers believe working WGA members are likely to be less supportive of a strike; about half of the guild’s members work each year, and a member must have sold work within a four-year period to maintain active status.

Late start

The inability of negotiators to reach an agreement prior to the expiration was not a surprise, given the relatively late start of this year’s talks and the fact that the 2001 negotiations went three days past the deadline. The WGA negotiations — which took nine weeks in 2001 — launched only four weeks ago, because WGA West leaders were distracted during the previous three months by the resignations of Victoria Riskin and Charles Holland from the presidency of the guild.

Key WGA demands cover complex issues that have provoked strong resistance from studios and networks: improvements in DVD residuals; jurisdiction over reality TV and animation; and higher producer contributions for health insurance.

The outlook for this negotiation remains uncertain. The WGA has not asked its members yet for a strike authorization — a process that could be completed in as few as three or four days but likely would take at least a week. Should the WGA vote to strike, networks likely would present a fall schedule dominated by reality programs, which are not under WGA jurisdiction.

DVD dispute

WGA leaders insist studios need to boost the two-decade-old formula for video and DVD residuals. Execs contend video/DVD revenues — which totaled $6 billion during the first quarter, up 5% from the 2003 quarter — are essential to studios and networks remaining financially viable amid declining filmmaking profits and softening TV revenue streams from foreign markets and syndication.

The WGA has estimated its members took in $51.5 million last year in residual payments from DVD and video, or an average of a nickel per DVD sold. Writers have been irked over the formula since it allows studios to exclude 80% of revenues from residual calculations on most films — an exclusion granted in 1985 because studios asserted at that point that the funds were needed to help videocassette technology succeed in the marketplace.

Studios are reluctant to change the DVD formula for the WGA, since any change would become a benchmark for this fall’s film-TV negotiations with the Directors Guild, the Screen Actors Guild and the American Federation of Television & Radio Artists.

The question of WGA jurisdiction over reality shows also will be difficult to resolve. Networks insist that since the shows are not scripted, the companies are not required to bargain on the issue; the WGA asserts that since the shows operate from scripted outlines, they should be covered.