Writers, Studios Agree to Adjourn Talks for 2 Days

Hollywood writers and studios agreed to hit the pause button Sunday on contract talks, mulling over proposals among themselves before reconvening on Wednesday, the two sides said.

The two sides exchanged new proposals Sunday before adjourning negotiations. Key issues being discussed are the sharing of more DVD profits, healthcare benefits and higher pay scales.

A three-year agreement between the Writers Guild of America, which represents TV and film writers, and the Alliance of Motion Picture and Television Producers expired early Sunday.

Although healthcare is considered the most important issue, a thornier matter involves studios sharing a bigger slice of their revenues from the red-hot DVD market.

Writers argue that they are badly shortchanged because the money they receive from DVDs is calculated under antiquated formulas dating back to the early 1980s when the videocassette market was just taking off.

Studios counter that DVD profits only help offset the soaring costs to make and market films, and that sharing more DVD money would wipe out profits at their movie units. Studios also are loath to tamper with the DVD formulas because if they dish out a larger piece to writers, they would be obligated to do the same with other groups such as actors and directors.

Hollywood executives and labor officials believe that a strike by writers this year is unlikely, although tensions could significantly increase each day writers work without a contract. Sources said talks have been growing increasingly contentious.

Studios are warning that they do not want to continue negotiations indefinitely, and would like to lift the labor cloud from the industry before networks pitch advertisers later this month on their fall programs.

Writers last struck the industry in 1988 in a five-month walkout that cost the industry an estimated $500 million.