Studios and Writers Come Together, But Still Far Apart

What might prove Hollywood’s biggest drama this year is now playing in a limited, two-week engagement. Studios and the Writers Guild of America are sitting in a conference room across from Farmers Market in the Fairfax District trying to negotiate a new contract and preempt an industry-wide production slowdown.

If they fail, the production of movies and television shows here is expected to slow, and eventually stop, as the industry prepares for the increased possibility of a strike by the WGA as well as the Screen Actors Guild this spring.

Unfortunately for Los Angeles, the talks are off to a bad start, with the two sides at odds about a host of administrative issues including how long bargaining will last, who should sit at the table and even where the talks will take place. Virtually everyone agrees this can’t be done in the two weeks allotted.

In one of the most jam-packed sessions ever in Hollywood labor bargaining, representatives of studios and the Writers Guild of America starting today will try to squeeze negotiations involving 41 total contract demands into a two-week window writers insisted on to try to force a quicker deal. If they don’t reach agreement, writers vow to not sit down again until shortly before their contract expires at 12:01 a.m. on May 2.

Executives from each major studio in a sign of unity will drive to the guild’s Fairfax headquarters this morning for the opening salvos before turning it over to their professional negotiators. On the other side will be WGA negotiators, led by President John Wells, one of the top writers and producers in television, and John McLean, a former CBS negotiator.

At stake isn’t just whether scribes and studios can work out a new deal but also whether Hollywood is likely to go dark this summer.

That’s because the Screen Actors Guild, whose contract expires two months after the writers’ pact does, is expected to take its cue from what happens with the writers. Indeed, for the first time, SAG observers will be allowed to sit in on the writer negotiations because studios are hoping that, if progress is made, it will be easier to jump-start a deal with SAG.

A SAG strike would not only shut production. The mere increased odds of a strike by actors will cause new work, already slowing, to grind to a halt on the chance it might have to be shelved.

“The green light’s gotten pretty dim,” said Walt Disney President Robert Iger.

For their part, the WGA insists that the studios, not writers, are making the most noise about a possible strike. They argue that there’s a deal to be made if the studios want one.

“The proposals are well-researched and credible. If the companies seriously want to make a deal, we will reach agreement,” said John McLean, the guild’s executive director and the union’s chief negotiator.

The studios say they don’t want a strike either but warn not to interpret that as a sign they will give in easily, especially with the economy slowing.

“Nobody wants a strike. It is bad for everyone, bad for every company and bad for the long-term future. But I think it is a mistake to have them misjudge the resolve of the companies,” Warner Bros. Chairman Barry Meyer said.

Since the devastating 22-week writers strike in 1988 estimated to have cost $500 million, both sides have been negotiating well in advance, preventing the kind of work slowdowns that come from uncertainty about a possible strike. But guild members now believe they lost leverage negotiating early and returned to more confrontational brinkmanship.

Although studio executives say they are pleased just to be sitting down now, they are annoyed by what they see as an arbitrary two-week deadline to deal with numerous and complicated issues.

“The problem is the time frame they picked of two weeks is impractical,” DreamWorks SKG partner Jeffrey Katzenberg said. “How can you do that in two weeks?”

Charles Holland, who heads the WGA’s negotiating committee, said writers believe that the two-week window helps both sides by forcing everyone to focus on hammering out a new deal.

Studio executives also are frosted by what they see as a transparent power play in which writers insisted on holding talks at the WGA headquarters rather than at the industry’s Alliance of Motion Picture and Television Producers headquarters in Encino, where rooms were designed specifically for negotiating. Holland said the WGA insisted on using their building “for no particular reason other than we think our facilities are more comfortable.”

Studios won’t present their formal demands until today, but it’s clear both sides are far apart. They can’t even agree on exactly how much it would cost studios to meet writer demands for higher residuals for foreign and cable TV, videocassette and DVD sales, Internet usage of work and for shows that air on the Fox network. Writers estimate they are asking for a total increase of $725 million over three years. Studios say it will actually cost them as much as $2.4 billion because they’ll have to give similar raises to other unions.

Money remains by far the major issue and the only one writers are likely to strike over. Still, a new wrinkle this year involved so-called creative demands reflecting frustrations by writers at what they see as a lack of respect for their work as well as long-standing tensions between screenwriters and directors. Writers want studio assurances they will be allowed on sets, can attend important meetings and that every director won’t routinely get a credit that reads “A film by.”

Directors say those demands infringe their rights, and studio executives, although sympathetic on some issues, say they won’t usurp a director’s control over how a film gets made.

“Somebody has to be the commander in chief on the set. That is the director’s purview,” Katzenberg said.

WGA negotiator McLean, who once sat on the other side of the table as a CBS bargainer, also has been insisting that top studio executives get more directly involved than in the past on the theory that professional labor negotiators are paid to say no and wait out the unions.

That also has annoyed studios, who say that executives aren’t as knowledgeable about labor negotiations as their paid professionals. Although they say they will be involved, they have no plans to usurp the authority of their chief negotiator, alliance president J. Nicholas Counter.