Writers' Talks Bog Down Over Residual Issue

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A potential settlement between Hollywood producers and the striking Writers Guild of America has snagged on a continued dispute over residual payments for foreign sales of movies and television shows, sources familiar with the closed-door negotiations said Monday.

Chief negotiators for both sides met Monday and expect to meet again today for informal talks. But no formal bargaining sessions have been scheduled since they recessed Saturday night.

Negotiators have imposed a news blackout on talks in the 15-week-old strike against some 200 entertainment companies represented by the Alliance of Motion Picture and Television Producers.

But sources close to the approximately 30-member bargaining teams on each side say producers and writers bogged down Saturday when they failed to reach a compromise on the foreign residual issue, after inching toward a settlement in repeated all-night sessions.

A failure to agree on foreign residuals could make tentative agreements in other areas meaningless, since the terms would only have worked as a package, sources close to the talks explained. Over the last several weeks, according to the sources:

The sides had tentatively agreed to extend their current three-year contract to four years, returning to a bargaining cycle that has occasionally been used by the guild in the past. The new contract would have expired in May rather than February, potentially sharpening the impact of future strikes, since they would begin exactly as the summer TV production cycle starts, rather than at the beginning of the industry's annual production hiatus.

There was substantial agreement on a revised creative rights package that would have established a standing joint, guild-management committee on professional standards, similar to a committee that now oversees the rights of directors in making films and TV programs. According to one source, some elements of the contract dispute, including a fight over the prominence of some writers' credits, could have been deferred to the committee under the settlement.

A sharp dispute over residuals for one-hour TV shows appeared close to resolution by a formula that would have acceded to the producers' demand that residuals for at least some such shows be placed on a percentage-of-sale basis, but might have given the writers a more favorable deal than that accepted by the Directors Guild of America last summer. Writers and actors' residuals are currently paid as a fixed amount, whether a rerun is sold in one city or across the country.

But the potential settlement of domestic residuals was contingent on agreement over foreign rights, where the sides remained at odds. Management negotiators expressed willingness to replace the current fixed residual payment to writers for foreign sales with a percentage formula. The companies argued that the new formula represented an increase in residuals, but the writers' negotiators disagreed.

Prospects for a resolution remained unclear Monday, and spokesmen for both the guild and alliance continued to decline comment on the sessions.

In a statement, the Writers Coalition, a splinter group within the 9,000-member guild, said: "It is our understanding that the sides are millibars apart, and we, along with the rest of the community, are anticipating a deal. We can't imagine any difference of sufficient magnitude to warrant further damage to the community."

The coalition claims a membership of about 200 writers, many of whom belonged to the Union Blues faction, which opposed a 1985 writers' strike and ultimately helped force a change in guild leadership.

If the talks break off indefinitely, each side could face a severe test of its solidarity in coming weeks.

Lacking a settlement, the guild would presumably try to split company ranks further by aggressively soliciting contracts with producers on an individual basis. More than 100 such contracts have been signed to date, primarily with smaller companies. Some larger companies have been reluctant to sign the agreements, at least partly because of published warnings by the Directors Guild that the contracts' creative rights provisions conflict with rights in existing directors' contracts.

The writers have denied that such conflicts exist. But one writers' guild source said the union might conceivably loosen some of the creative provisions in order to encourage larger producers to break ranks with the alliance.

At the same time, the guild could be forced to contend with growing restiveness among the Writers Coalition and other members who have argued internally for a rapid settlement of the strike.

The dispute has already delayed the expected start of the fall television season and is beginning to interfere with movie production among the major studios and independent producers.

Copyright © 2014, Los Angeles Times
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