This article was updated at 9:40 p.m.
Negotiations between showbiz scribes and studios have turned acrimonious, heightening the possibility of a Writers Guild strike.
Bargaining broke off Wednesday after the WGA spurned the companies’ three-year offer and announced a one-week break to take the temperature of its 12,000 members. The Alliance of Motion Picture & Television Producers did not accept or reject the WGA’s proposal for a one-year deal and asserted that studios and networks need the security of a three-year pact.
“The three-year term is particularly important because of the need for certainty in planning for feature films and series television,” AMPTP president Nick Counter told Daily Variety.
WGA West prexy Daniel Petrie Jr. sought to quell strike speculation, which has been fueled by the guild’s assertive stances and by last weekend’s expiration of the three-year WGA contract. Guild, which last struck in 1988, has not yet scheduled a strike authorization vote.
“We are in uncharted territory here with the expiration of the contract,” he told Daily Variety. “We don’t have any interest in going on strike but we’re also not interested in taking a bad deal.”
The WGA West has scheduled a membership meeting for Monday at the Sheraton Universal. The guild and the AMPTP will return to the bargaining table two days later.
Petrie took several potshots at the AMPTP, ridiculing assertions by showbiz execs that they can’t afford to pay writers more due to soaring costs and shifting TV revenue streams.
“The entertainment industry is healthy and robust,” he said. “Writers are seeking a fair share of the $50 billion industry they helped create. It’s time to make a fair deal.”
In response, Counter said, “We do intend to give writers their fair share. We are prepared to negotiate a reasonable package with the WGA.”
The one-week recess is certain to amp up pressure on networks, which begin their upfront presentations May 17 in Gotham. Without a WGA deal in place, the nets may present a fall TV schedule dominated by reality shows — which are not covered by the WGA.
No final offer yet
Counter refused to say how much longer the negotiations will take but he added that the AMPTP had not yet made a final offer.
Petrie noted the WGA’s one-year proposal did not include its key demands for increased DVD residuals along with jurisdiction over reality TV and animation. Instead, the guild proposed a similar deal to the one-year extension that SAG and AFTRA negotiated in February, which included a 2.5% hike in minimums and a 0.5% increase in health plan contributions from producers.
SAG leaders have said they will seek hikes in residuals this fall.
Petrie said, “We believe that our members and the entertainment industry are best served if we continue our efforts to reach an agreement that keeps the town working.” He added that the offer for a one-year deal still stands.
Counter said the one-year extension for SAG and AFTRA stemmed from a recognition that negotiations on the SAG-AFTRA commercials contract last fall meant the unions lacked sufficient time in the fall and winter to prep for negotiations for a three-year deal. “The SAG one-year deal sets up the time frame for us to address the major issues in an orderly fashion this fall,” he added.
One-year pact a no go
But observers believe the AMPTP is unlikely to agree to a one-year pact since all three guild contracts would expire next summer. A one-year WGA contract would run out in May 2005 — less than two months before the June 30, 2005, expiration of the SAG, AFTRA and DGA contracts.
Petrie also said the AMPTP’s three-year offer was “unacceptable,” adding that the guild will accept a three-year deal only if it includes improvements in DVD and jurisdiction. “It would mean more cuts in health benefits and does not address any of the major issues of these negotiations,” he added.
The recess also means the WGA will lift the monthlong news blackout that had been imposed when talks started a month ago. Members have become increasingly frustrated over the lack of substantive detail on negotiations.
Producers mum on profits
Studio and network execs have insisted that they can’t afford to hike DVD payouts due to declining filmmaking profits and sliding TV revenues in syndication and foreign markets. But Petrie accused the AMPTP of being deceitful by not disclosing specifics.
“We were sincere when we stated that we would take into consideration the realities of the marketplace,” he said. “We have requested that the companies provide us with information supporting their statements regarding the profitability of theatrical motion pictures. The companies have refused to supply any data to support their assertion that nine out of 10 films do not ‘break even.’ They haven’t even defined ‘break even.’ ”
But Counter denied those accusations, asserting that the WGA has extensive internal data from residual payments to its members. “We have shared the figures that support our position,” he added.
The WGA asserted that prior to the negotiations, it had accepted $42 million in benefit reductions and other cuts over the next three years and said that to maintain this reduced level of benefits without cutting back any further, the health fund requires $43 million more. It said the AMPTP proposed $10.6 million over three years.
Counter said the AMPTP had not yet made its final offer on health care.
The WGA also said the AMPTP refused its request that the 1.2% residual formula for Internet rentals be applied to Internet sales.
Scribes seek residuals
The WGA proposed an increase for pay TV residuals based on the DGA formula, under which directors receive $9,445 for a half-hour program and $16,000 for a one-hour the first year with a declining rate in subsequent years. Writers currently receive no residual payment in the first year, then $2,500 for a half-hour program and $4,333 for a one-hour for the second, third and fourth years with a declining rate after that.
The AMPTP proposed a $250 increase for half-hours and a $417 increase for one-hours in the second, third and fourth years, with no residual in the first year. The companies also offered no increase in residuals for television movies.
Support from unions
SAG, AFTRA and the DGA issued statements of support for the WGA’s position.
“The members of SAG stand solidly behind our brothers and sisters at the Writers Guild as they continue their talks with producers,” SAG prexy Melissa Gilbert said. “We hope the AMPTP will address the issues in a meaningful way that will help the town keep working without interruption.”