Writers, Studios Were Ready to Make a Deal

Los Angeles Times Staff Writers

Ultimately, the very people who sell words for a living didn't need any to convey to Hollywood's studios that there would be no strike this year by TV and film writers.

It was May 2, the day the Writers Guild of America's contract with studios expired in the early morning hours. Protracted, tense talks had been dragging into the night all that week as Hollywood waited anxiously for a sign that they might finally reach a conclusion. At least six key economic issues remained unresolved, as well as 16 more minor proposals.

By Wednesday, there came the subtlest of turning points.

Without a word, one of the writers' chief negotiators drew up a two-column list, with the studios' outstanding deal points on the left and the writers' on the right. Both sides began crossing off issues, as if to say none were worth striking over.

"For the most part, we took off most of our proposals and they took off most of theirs," recalled John Wells, president of the Writers Guild's western faction.

Although some issues remained, by that point there was an unspoken message from both sides in their actions.

"It was clear a deal was achievable at that point," said studio negotiator J. Nicholas Counter, president of the Alliance of Motion Picture and Television Producers. "From Wednesday on," said the veteran negotiator, "we were in a deal-making mode."

When the dust settled two days later, on the morning of May 4, the writers came away with a tentative contract, still to be voted on by the membership, that would give them an additional $41 million over three years. They made some headway in key areas, but failed to achieve much of what they had hoped for.

Just how the deal was put together has largely been kept between those at the table, as a "news blackout" was being honored by both sides. Still, much of how the bargaining went has been learned from interviews with some of the key players.

Although some strenuous deal making was still required and some major hiccups were to take place, Wells' and Counter's instincts proved right.

Interviews with parties behind the scenes show that amid the last-minute horse trading and unexpected twists, what usually held the talks together and produced a deal was the instincts of experienced negotiators on both sides and their adeptness at reading each other's signals.

One sign was that neither side felt the need to play a trump card. Studios never labeled any proposal a "last, best and final offer," the step that usually precedes an impasse. Likewise, writers never asked its 11,000 members for a strike vote, despite some pressure from members to do so.

To close the deal, there were compromises to be made by both sides. For example, the studios knew they needed to do something to appease screenwriters in a contract that largely affects the pocketbooks of TV writers. That led to a creative solution in the form of a $5,000 guaranteed payment to writers whose film appears on DVD in exchange for the right to publish their scripts on DVDs.

Likewise, writers could tell studios weren't going to budge on changing the formulas that determine how much they are paid when shows rerun on cable TV, in foreign markets or on videocassette. But writers did succeed in getting a long-standing cap on their foreign payments scrapped--significant as a moral victory as well as an economic one--by negotiating to receive a 1.2% residual into perpetuity whenever a TV show commands a big price overseas.

Those involved in the negotiations agree that one of the most tense and highly dramatic impasses in the talks came on the weekend before the settlement was reached. After an all-day session Saturday, April 28, studio negotiators walked out of the meeting, angry and frustrated over what they contend was the writers' unwillingness to make compromises after reviewing the studios' money proposals.

"They didn't make any moves at all," said a studio source. At that point, sources said Counter suggested to his negotiating committee that since the talks were going nowhere, they adjourn and not return to the table until Monday, April 30.

Counter declined to comment on the events of that weekend.

But Wells acknowledged that the studios were "unhappy" and that "everyone knew somebody had to put down their cards first and everyone worried about doing that. . . . We moved $300,000 toward them and they moved $300,000 toward us and we were separated by tens of millions of dollars."

That Monday was tough going. But, by day's end, Wells said, "Everybody was starting to show their cards." By late Tuesday and into the early morning hours Wednesday, participants said the logjam on the economic package began to break up.

The writers were still struggling with trying to get improved payments when their work is sold on videocassette or runs on basic cable channels. The studios were looking to trim payments related to syndicated shows and when episodes appear on cable shortly after their network airings.

And, still, there were creative matters that needed to be settled in talks happening separately from the financial bargaining.

The most dramatic moment in those sessions came the morning of Thursday, May 3, when the WGA shocked the chief executives of the studios by declaring it had decided to take the "A film by" credit issue off the table.

Rather than accept what they felt was a less-than-adequate proposal by the Directors Guild of America, which was working in tandem with the studios, the writers tabled the issue--with the intention of coming back to it after formal negotiations concluded.

A majority of writers felt that the DGA had not gone far enough by simply setting guidelines for eliminating the "A film by" credit for first-time directors (with few exceptions) and for awarding it to directors on their fourth movie unless their earlier ones had received a certain level of favorable critical response or commercial success.

"We were faced with a very difficult position," said screenwriter Gary Ross, an alternate on the negotiating committee who participated in the talks. "We felt the most responsible thing was to table the issue and not give our tacit approval to a credit we don't believe in. And, we felt it would be morally wrong to put valet car parkers out of work over what is an ideological conflict between two unions" by striking over the issue.

What no writer would discuss on the record was what many characterized as the most egregious and unreasonable demand of all made by the DGA--that if it accepted the "A film by" proposal, it was with the understanding that there would be a 6 1/2-year moratorium to discuss that and all other creative issues.

On the economic side, there was still one final, unexpected shoe to drop. That happened Friday, just one hour before the news conference was scheduled to announce the sides had reached a settlement for a new three-year contract.

Friday morning the studio negotiating committee was reviewing the deal points and contract language in the memorandum the Writers Guild had just drafted, when a question arose about when Fox would become a network like NBC, CBS and ABC and have to pay full residuals on TV episodes.

According to the negotiators, the studios agreed to a compromise that would phase in the payments over the three years of the contract.

After pushing back the announcement of a tentative contract to 4 p.m., it was declared that once again there would be labor peace in Hollywood. As if tensions never existed, both sides lauded each other at a news conference broadcast live on national television.

But the love fest goes only so far. One writer on the negotiating committee, expressing the oft-felt cynicism writers have about studios, suggested that the morning headline read: "Strike Averted--Studio Deadwood Breathes Sigh of Relief."

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