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Strike Watch: Frustration Mounts and Clock Ticks as WGA, Studios Resume Talks

Both sides are expecting the other to make significant moves Sunday when contract negotiations resume between the Writers Guild of America and the Alliance of Motion Picture and Television Producers.

The sides are meeting in a rare Sunday session with less than 48 hours before the midnight PT Monday contract expiration deadline could give way to a strike on Tuesday.

Sources close to the situation say the studios will offer some revised proposals on the thorniest issues in the talks, including funding for the WGA’s health plan, a change in compensation formula for writers working on short-order series, and residual fees for SVOD programs.

AMPTP-affiliated sources said the studio team is looking for WGA negotiators to come forward with a willingness to compromise. There has been frustration in the negotiations to date for what is viewed as the WGA’s lack of engagement in the typical give-and-take of contract negotiations.

The WGA has maintained that the six-largest media conglomerates that dominate the AMPTP generated a total of $51 billion in operating income last year and that writers deserve to share in the prosperity of the Peak TV era. Moreover, changes in the nature of the business — notably the fact that some two-thirds of TV series production is shows that run six to 13 episodes per season — have taken a big bite out of writers’ paychecks.

According to studio sources, the WGA team has rejected some proposals and asked the AMPTP to come back with new offers, but they haven’t offered much in the way of guidance on where there is room to negotiate between the WGA’s asks and the AMPTP’s proposals. The frustration on the lack of detailed feedback from the WGA has led to resolve among reps for the AMPTP companies that the guild needs to step up with more specifics if there are to be additional changes in the three-year contract offer to be made Sunday. A source stopped short of calling it the AMPTP’s last, best, and final offer but reiterated that the studios are looking for compromises from the WGA.

There was also consternation over the WGA’s statement on Friday that the total cost for the studios to agree to the guild’s contract proposals would be $156 million a year for the three-year contract term. Sources on the AMPTP side called those estimates “conservative,” just as the $51 billion profit figure is disputed as inflated by revenue sources for diversified conglomerates that come from well beyond film and TV production.

The AMPTP negotiators met Saturday to hammer out some of the revised proposals to be presented today to the WGA. According to multiple sources, there was a growing sense of pessimism that a deal can be reached by Monday night to avert a work stoppage.

Among the biggest sticking points:

Span: The WGA has pushed to change the compensation formula for writers working on short-order series, or those that run less than the broadcast standard of 22 episodes per season. The WGA wants writers who are paid per episode to be earn extra compensation for work terms that stretch beyond two weeks per episode. The guild also wants the time frame of a season specifically defined as no more than 12 months after the start of work for the first person (who may not be a writer) hired on a production. The AMPTP has proposed that the extra pay kick in after 2.6 weeks of work per episode and that it be limited to lower-paid writing positions.

Exclusivity: The sides are grappling over the income threshold for when a studio can negotiate exclusivity terms with a writer. The AMPTP has proposed that writers making more than $300,000 per season can be held under exclusive deals, subject to individual negotiation by a writer’s representative.

Parity in script fees and residuals: The WGA is pushing for parity in script fees across broadcast, basic cable, pay cable and SVOD outlets, arguing that the historic discounts for cable and SVOD versus the top rate of broadcast TV have become anachronistic. The guild is seeking similar changes to offset the discounts built in to residual formulas. The AMPTP is believed to have offered a proposal to gradually chip away the discounts over time. The AMPTP’s concern is that the immediate elimination of cable and SVOD discounts for the WGA would be demanded by the DGA, SAG-AFTRA and IATSE, thus quadrupling the costs for the studios. In December, the Directors Guild of America’s new contract agreement with the AMPTP that boosted residuals for made-for-SVOD content with a two-tiered formula that calls for outlets with 15 million or more subscribers (aka Netflix) to pay a higher rate than others. The WGA is said to be pushing back at the tiered formula in favor a uniform rate across SVOD outlets.

Health care: As of Friday the sides remained far apart on the size of the capital influx that the WGA is seeking to shore up its health insurance plan. The AMPTP is believed to have offered around $60 million while the guild is seeking around $85 million. The sides are believed to have made some progress on agreeing to around $6 million-$7 million in savings through tighter management of the plan during the three-year contract period in exchange for the influx.

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