Writers Win Slice of Interactive Pie

The arrival of interactive entertainment technology has produced both hopes and fears among Hollywood’s creative professionals--hopes of more money, fears of financial exploitation--and the Writers Guild of America has now taken a big step to protect its members.

In its recent negotiations with representatives of television networks, movie studios and producers, the guild secured a novel three-year agreement giving writers 1.2% to 3% of the “applicable gross” on interactive products--the money developers of CD-ROM discs, video games and even computer screen savers pay for the right to use television or film material.

Although issues such as how Fox network writers are paid and whether film credits should continue to say “A Film by . . . “ attracted more attention during the recent guild negotiations, union officials are calling the agreement on interactive rights one of the most important economic issues they’ve ever negotiated.

The deal could mean tens of thousands of dollars in a screenwriter’s pockets each time a movie or TV show he or she wrote is developed into an interactive game, or when an interactive project includes clips from the work. That may not mean much now, since the industry is in its infancy, but it could translate into big dollars if the interactive arena explodes, as some expect.

And, in a highly unusual clause, the interactive agreement will be reviewed each year of the three-year contract to make sure it is still fair to both sides as the market develops.

The entire issue was almost set aside during the recent negotiations. But better CD-ROM technology incorporating full-motion video is now coming to market, and guild officials feared the absence of an arrangement on the issue might make interactive developers less eager to use movie and television material.

“We don’t know what the future is, but we can’t be hurt by this. If everyone is wrong, it costs us nothing. If everyone is right, we won’t be playing catch-up,” said screenwriter Lawrence Konner, whose work includes such films as “Jewel of the Nile” and “The Beverly Hillbillies.”

So far, the technology has not been good even for extensive use of movie and TV clips, but that is changing quickly. The big question now is whether people who love “Seinfeld” or “Speed” will love an interactive game based on the material. Most successful CD-ROMs, such as “Myst,” or popular video games, such as “Street Fighter,” are based on story lines hatched by programmers.

Some movie-based games--such as “Blown Away,” based on last summer’s MGM movie starring Jeff Bridges and Tommy Lee Jones--have been heavily promoted, but few have done well. Disney’s “The Lion King” was a hot seller on CD-ROM, but it has been plagued by embarrassing technical problems.

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On the block: Premiere magazine, one of the most closely read publications in Hollywood, has been put up for sale by owner K-III Holdings, company sources said.

K-III is an investment partnership controlled by Kohlberg, Kravis & Roberts, the giant corporate buyout group. Sources said the decision was made because Premiere is the only pure entertainment magazine in K-III’s collection, which also includes such magazines as New York, Seventeen and Soap Opera Digest.

Premiere, which sources said turned its first annual profit last year, was founded in 1987 by French publisher Hachette and media baron Rupert Murdoch, and Murdoch later acquired the whole thing. Murdoch sold Premiere and eight other magazines to K-III in 1991 for $600 million as part of a $7.6-billion refinancing agreement with his lenders.

With a circulation of more than 600,000, Premiere has carved a niche with a witty, often irreverent tone in covering the movie business. The magazine’s list of the most powerful people in Hollywood has become an annual rite in which many entertainment executives fret for weeks about where they will rank.

Premiere was recently trimmed to the size of a conventional news magazine in a profit-boosting move. But with the pending sale, it is expected to resume its former large size, beginning in May.

Sources said a price is difficult to forecast, since Premiere only recently turned profitable, but they say $20 million to $30 million is a decent guess.

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Networking? Speculation is rampant that Ted Turner, now that he may be close to shedding Time Warner as an investor, and Barry Diller, now that he is on the verge of shedding QVC and cubic zirconia, will be taking aim at CBS sooner rather than later.

But if you’re CBS Chairman Laurence Tisch, who controls nearly 20% of the stock, do you want to sell now?

One reason he may not is that the government is seeking to loosen foreign ownership restrictions on U.S. communication firms by companies from countries that have reciprocal arrangements allowing U.S. companies to invest in their firms.

That means the list of potential investors in a network such as CBS could soon grow, which in turn means Tisch would probably get a better price if he waited.