Guilds Cry Foul on Royalties for Downloads of ABC Shows

The volatile issue of how writers, directors and actors are to be paid when TV shows are downloaded is heating up again, with their unions accusing the ABC network of violating collective bargaining agreements.

The Screen Actors Guild, the Writers Guild of America, West, and the Directors Guild of America all issued statements this week criticizing the Walt Disney Co.-owned network for deciding to pay residuals on TV episode sales to video iPod users under the same payment formula for DVD sales.

That interpretation has angered guild leaders, who contend that Hollywood talent is getting shortchanged by an antiquated formula. They said networks should pay a more generous rate when consumers purchase shows online. The union leaders threatened to file claims.

Under the current DVD formula, producers retain 80% of home video revenue to cover manufacturing and other costs, and actors, writers and directors receive a cut from the remaining 20%.

Karen Hobson, spokeswoman for Disney ABC Television Group, said the network stood by its interpretation.

“If the guilds have a different point of view, they have the right to challenge the company’s determination before a neutral arbitrator,” she said in a statement. “In the end, this is simply a dispute over how to interpret a provision under agreements that provide the means for resolving that dispute.”

But Writers Guild President Patric M. Verrone called ABC’s decision an “insult to our hardworking members.”

He said the guild would “aggressively pursue all legal options” to challenge the move.

Screen Actors Guild President Alan Rosenberg said in statement, “ABC’s actions are flatly inconsistent with our collective bargaining agreements and with labor law obligations and fail to fairly compensate performers for the use of their work and images.”

Directors Guild President Michael Apted issued a similar statement opposing ABC’s plans.

Disney has drawn scrutiny from union leaders over its deal in October with Apple Computer Inc. Under the agreement, the company is allowing episodes of ABC’s breakaway hits -- “Lost” and “Desperate Housewives” -- to be downloaded from the iTunes store for viewing on video iPods.

Labor leaders don’t want to repeat what many view as a big mistake when negotiators in the early 1980s agreed to the video formula. At the time, studios contended that the rate was crucial to getting the then-fledgling videocassette business off the ground.

The guilds then watched as VHS, and later DVDs, mushroomed into a multibillion-dollar-a-year, highly profitable business for the studios.