Deadlock: Writers' Strike Reaches the Crisis Stage

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The writers' strike has escalated from a thunderstorm to a hurricane.

At the 17-week mark, it is blowing stronger than ever with no end in sight. The damage is mounting, and the mood on both sides is ominously dark.

A solution to the dispute could come from the blue. But there is no immediate sign of it.

An overwhelming majority of the 9,000-member Writers Guild of America voted last week to continue its walkout against some 200 Hollywood companies. In response, the Alliance of Motion Picture and Television Producers said its negotiations with the writers were "concluded."

That means more layoffs among California's 230,000 entertainment workers and a potentially rancorous battle in the weeks ahead, as studios attempt to get TV shows working with non-union scripts.

As the strike hits the crisis level, more than a few people have asked: "Why?"

"Frankly, I sometimes think it's just a stupid contest on both sides," says the writer-producer of one major TV show, who has been a public supporter of the guild, even though he doesn't wholly agree with its specific positions.

The confusion grows partly from inflated rhetoric on both sides, and partly from the esoteric nature of Hollywood's labor disputes.

The producers' latest offer was a 48-page document, crammed with details about "break amounts," "participation rights" and "protected class access," which even the most ardent partisans on either side aren't likely to have read in full. Defending the offer as a partial victory for the guild at a recent press conference, Steven Bochco, producer-writer of "L.A. Law," was embarrassed to admit that he didn't know exactly what made it a win. He hadn't read it.

What are the problems keeping Hollywood's writers and producers apart?

Foreign Residuals

The sharpest issue separating the sides is the guild's demand for an increase in its residuals--payments for reruns--for TV shows sold abroad. Movie-related issues are largely resolved.

Specifically, the union, which already gets a fixed foreign residual, wants an additional annual payment equal to 5% of its current minimum for each year that a program is sold to broadcasters and cable operators around the world. The payment would amount to $637 a year for an hourlong show like "Miami Vice" and $330 a year for a half-hour comedy like "The Cosby Show."

Until 1991, moreover, there would be no new payments at all, since the new residual would kick in only after producers have been allowed to show programs for three years or longer (depending on the kind of program) in return for the initial fixed payment.

In mathematical terms, the stakes seem absurdly minute.

Shows like "Miami Vice" already cost $1.5 million an episode to produce. So the new residual would add an annual charge equal to 4-hundredths of 1% of a major show's cost per episode, starting in three years.

By the same token, writers already are guaranteed contractual minimum payments of $29,959 for an hourlong script and one network rerun. So a single working writer would have to earn the new residual for 47 years in order to make up his lost fee for each script he doesn't sell during the strike.

Guild leaders say writers should have the new fee, because foreign sales of TV shows have mushroomed in recent years and because tiny inroads, gained in past negotiations, later proved to be of enormous value. "You trivialize the issue to say it's just $637 an episode. That will increase as the minimums increase every year," says chief guild negotiator Brian Walton, arguing that the numbers become significant for writers when episodes begin to add up.

Company negotiators say the guild exaggerates the value of foreign sales, which typically amount to less than 10% of the money a studio ultimately receives for each TV episode produced. Further, companies say they won't pay the residual, however small, because it would only add to losses they are taking on many TV shows, and because they would almost certainly be forced to give other unions the same payments. "It's the domino theory," says J. Nicholas Counter III, chief negotiator for the alliance.

Hourlong TV Residuals

Supposedly the main strike issue, a fierce dispute over hourlong TV residuals is virtually resolved--but only if the producers raise foreign residuals in exchange for revisions that were tentatively agreed to by the union.

In public statements, Walton has bitterly accused the companies of using a "meat cleaver" to lop off and keep his one-hour concessions, while throwing away their own expected concessions in the foreign area.

The companies don't see it that way.

According to Counter, Hollywood's studio chiefs personally told Walton that the premise on which their latest round of talks would be based was that combined residuals in the foreign and one-hour area couldn't be any higher than a package negotiated with the Directors Guild of America. Last summer, the DGA had accepted the softened one-hour formula.

As bargaining began, the studio chiefs instead offered major concessions on creative control and other issues for writers. That move, some company bargainers thought, amounted to an implicit swap: creative control for one-hour residuals.

Walton's team took the creative concessions, but in the very next session insisted again on the foreign residual--particularly irritating MCA President Sidney Sheinberg and pushing several other key studio chiefs into a harder position toward the writers, according to one company bargainer.

The renewed foreign demand was "directly contrary to the premise on which we started," says Counter, who calls Walton's "meat cleaver" version "history revisited, at best."

Sources close to the guild bargaining team say union leaders never agreed to the supposed premise, and offered a deal that fit within its terms anyway.

Walton says that to discuss the matter in detail would violate the confidentiality of private conversations.

But he does say the producers were guilty of sloppy bargaining. In his view: "They could have said, 'You get creative rights, but if and only if you give up X, Y, Z.' They didn't do that. If they tell me it's linked to something else, I won't be able to take it, right?"

Still unresolved: The writers want any concession in the hourlong residuals to have a time limit. The producers have offered to submit any deal to review by an arbitrator in 1991--but the guild views such protection as insufficient.

The economic impact of the hourlong dispute remains unclear.

Residuals for such shows--about $16,114 for six syndicated showings of an hourlong episode--account for about 35% of the $50 million-plus in annual residuals paid to writers guild members. The producers claim that a new, percentage-based formula that was already accepted by the directors guild could actually raise residuals in the long run by making it easier to sell some series that currently aren't in reruns because of the stiff residuals payments. The writers challenge that claim.

Personalities, Perceptions

As the strike worsens, a distinct mismatch between key bargainers on both sides of the table has become evident.

A Colorado-born labor lawyer, Counter, 48, is low-key and tenacious. He tends to focus narrowly on the bargaining process, and keeps one eye fixed on the next union in line. (The Teamsters and International Alliance of Theatrical Stage Employees, whose contracts expire July 31, are already in talks with the alliance.)

Cool and stern, Counter particularly fears letting any union prevail by walking out over what he sees as a subsidiary issue--for instance, foreign residuals. "We'll be unable to settle any strike if a union can tell us, 'This isn't really big enough to be a strike issue. But once we're out, we can't come back until we get it,' " he says.

London-born Walton, 40, is also a lawyer. But he is given to flashes of anger and a growing sense of righteousness on behalf of writers, whom he believes are undervalued by the guild's basic contract.

Walton recently described a dream that he believes has become a kind of metaphor for the strike--or at least for his view of it. In the dream, he was walking side by side with two normal-looking men, who suddenly donned loincloths and loomed to gigantic size.

As Walton watched, his companions--exactly who they are is unclear, even to Walton--climbed a pair of skyscrapers. Flames and lightning bolts shooting from their bared chests, they set the town on fire, while he screamed: "What are you doing?!"

Despite that mixture of hot and cool, the two top negotiators continue to communicate regularly, even when the sides supposedly aren't talking. But each admits to having misread his adversary.

Counter initially thought Walton and his cohorts were prepared for a conventional negotiation that might have ended with some deft, last-minute concessions by the companies. Walton, conducting his first industry-wide guild negotiation, thought Counter would strike a more accommodating stance in order to shore up Walton's position as a moderating influence in a guild that was traditionally volatile, but had become strongly unified in recent years.

Both were wrong, and each is clearly frustrated by the other.

Solidarity--Forever?

Each side has proved much stronger than the other imagined.

Producers were plainly shocked by last week's 2,789-to-933 guild vote to continue the strike. They hadn't expected a victory, but they thought a slimmer margin of decision would have forced guild leaders to budge on the foreign residuals issue.

Guild leaders appear no less surprised by the companies' resolve. The alliance, formed in 1982, has never weathered a major strike despite repeated displays of brinksmanship, and was widely perceived to have averted a directors' strike last summer by caving in on crucial demands at the last minute.

But how much more can each side take?

The guild will soon test the companies by soliciting a new wave of independent contracts. So far, 111 producers have signed such agreements, but they control less than 5 of an estimated 57 hours in prime-time network programming. The top-rated "The Bill Cosby Show" and its spinoff, "A Different World," are covered by one of the independent contracts.

Of the remaining 200 alliance-represented producers, by contrast, the biggest dozen companies--Universal, Lorimar, Warner Bros. and others--control about 40 hours of the prime-time schedule. So the big studios could conceivably survive large-scale defections, particularly if budget-slashing network chiefs such as CBS' Laurence Tisch continue to back producers in attacking program costs.

The companies, for their part, had counted on high-earning guild dissidents--many of whom, like "L.A. Law's" Bochco, actually double as producers--to help soften the guild's stance. But internal dissent appeared to backfire, as an enormous turnout by anti-contract writers--some of whom seemed to vote more against the dissidents than against the companies--buried the settlement faction.

Studios will now try to get some shows going with non-union scripts, a ploy that has already worked with the soap operas and a few other shows.

History Lessons

The past, always tricky, has tempted everyone with false encouragement.

A 1985 writers' strike collapsed after two weeks because of internal dissent. That seemed promising for producers. But this time, the dissidents have pretty much been routed.

In 1981 and 1973, strikes ended near the three-month mark, as the networks announced their schedules, product in the movie pipeline dried up and producers got itchy to start producing. But the companies are better organized today, and the current situation is already worse.

In 1960, writers struck for five months, from Jan. 15 to June 15. Back then, according to a brief history in the guild's membership handbook, Universal helped weaken the producers by breaking ranks with the old bargaining association--but Universal appears unlikely to do the same today. And the writers won a major victory on TV residuals, contributing to an institutional memory that says: Strikes work.

Psychology

The writers are "up." It will take either a significant economic concession, or lots more grinding attrition to bring them down.

The producers are angry. It may take some dramatic defections, or more grinding attrition to cool them off.

Never at a loss for words, many writers already describe the strike with an obscene metaphor that loosely translates as: "a contest of relative sexual prowess." As the walkout continues, it will become less about money--for both sides, the losses already may have exceeded any possible near-term gains--and still more about machismo.

World-view

The real problem may lie in two radically conflicting views of the entertainment business.

Many writers, to exaggerate only slightly, appear to see Hollywood as an "evil empire" of lushly profitable studios, run by executives who line their own pockets with bonuses, then cry poor when it's time to share the wealth.

Walton and other guild leaders have repeatedly pointed to record profits over the last few years at Disney, Paramount, Warner Bros. and elsewhere as evidence that the studio executives are mean-spirited holdouts.

"Maybe they're all Caligula," one exasperated guild negotiator recently said of what he sees as the shameless rapacity of the studio chiefs.

Conversely, many Hollywood executives appear to see writers--or at least a voting majority in the guild--as an irresponsible lumpen proletariat that takes perverse pleasure in stopping the show-business machine and doesn't comprehend how weak the financial underpinnings of the industry have become.

They point to losses or falling profits at Lorimar, New World, Columbia, MGM/UA and Universal and to a series of mergers that are taking smaller producers out of the business as evidence of a serious problem the writers are missing.

"All they can see are capitalist money-men trying to get the little guy," a frustrated company negotiator says of his opponents.

In each view, apparently, there's just enough truth to prolong the pain.

The Impasse . . . in Brief

TV-show residuals (payments for reruns) are the sticking point in talks between writers and producers.

Hourlong Shows

Writers and producers agree on main points.

The impasse: foreign residuals.

Foreign Residuals

Guild position: new annual payments of $330-$637, starting 1991.

Producers' position: no change in present formula.

Copyright © 2014, Los Angeles Times
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