"The industry is at a crossroads," said Sidney Sheinberg, former president of Universal Pictures' longtime corporate parent, MCA Inc. "Fear is a great motivator here on both sides."
"I'm not going to be the chairman of the negotiating committee that gives away the Internet," said the guild's John F. Bowman. "There's an enormous burden of history here."
The studios, confronted with dwindling DVD sales and rising production and marketing costs, say they are concerned about committing to the guild's new-media pay demands when the economics of the Internet and other digital technologies are unknown.
The dispute isn't fueled only by the issues, however. A clash of personalities and styles of the opposing parties -- with the guild's chief negotiator, Young, and President Patric M. Verrone facing off against the studios' negotiator, Nick Counter.
Young, a veteran labor organizer of garment and construction workers but a newcomer to Hollywood, transformed the guild into a more activist union. His confrontational tactics put him sharply at odds with Counter, a hard-nosed industry veteran.
The conflict set the stage for an erratic bargaining process.
Although negotiations ostensibly started in July, they didn't get serious until Nov. 4, the day before writers walked.
Talks resumed last week, prompted by a flurry of back-channel communications involving writer-producers, studio executives and top agents. That raised hopes that a deal was within reach. However, negotiations deteriorated as the week wore on.
The final bargaining session began at 11 a.m. Friday at the InterContinental Hotel in Century City. Guild leaders said they waited hours for the studios to submit new proposals.
In late afternoon, studios offered writers a modest improvement in pay for films delivered online and insisted that the guild drop six demands, including representing writers in reality TV and animation. The guild had also put forth a "sympathy strike" proposal that would allow members to honor the picket lines of other unions without losing their jobs.
Young said he was summoned by Counter shortly after 6 p.m. while the writers huddled in a separate room. Meeting Young in a hallway outside, Counter delivered an ultimatum: The studios would not proceed with the negotiations unless the guild took the six issues off the table -- and put it in writing.
Accounts differ on what happened next. Sources close to the studios said Young stormed off and slammed a door behind him. Young said he did no such thing.
Young said Counter told him; "We're leaving. When you write us a letter saying you will take these items off the table we will reschedule negotiations."
Times staff writer Robert W. Welkos contributed to this report.