Writers, Studios Agree Their Talks Went Nowhere

Hollywood studios and writers over the last six weeks barely inched toward a resolution of critical financial issues to avert a possible strike, despite an impression in the industry that they were making progress, according to participants on both sides of the contract talks.

Although negotiations between studios and the Writers Guild of America did not break off formally until Thursday, both sides say they realized talks would be fruitless almost immediately after they started on Jan. 22.

“Three-and-a-half weeks into this it was obvious they weren’t going anywhere. They were giving us six different flavors of how you say ‘No,’ ” said Writers Guild of America chief negotiator John McLean.

The details emerging show just how hard it will be for outsiders to determine whether progress is being made as the writers head toward the expiration of their contract and a possible strike. The saga of the broken-down negotiation does little to raise the prospects for avoiding a strike.

The industry says it ran into what its chief negotiator, J. Nicholas Counter, characterized as the biggest guild demands since the 1970s when wage and price controls were imposed and lifted during the Nixon administration. “The gulf after four weeks was wider than it usually is historically at the beginning of negotiating sessions,” he said.

Writers claim studios have offered a net decrease of $2.7 million in total compensation over three years, in contrast to their demand for an increase of $99.7 million over that period. But the studios insist writers are asking for $112 million, in contrast to the $30 million that the studios say they are offering.

With talks shelved for now on the contract that expires after May 1, both sides began to detail their jockeying over the last six weeks. Under heightened security and a disciplined, self-imposed news blackout, both sides had previously kept talks under wraps.

To keep security tight, the guild turned the second floor of its Los Angeles headquarters near the Farmers Market over to the studios as their base of operations. Using coded elevator card keys, the guild made sure only the studio representatives and a handful of the union’s officials had access to the floor. Even employees from a weight-loss clinic that rents space from the guild had to be escorted to their offices by security guards.

Writers had insisted from the start on using their headquarters for negotiations. That annoyed studios, whose Alliance of Motion Picture and Television Producers building in Encino is specially equipped for negotiations. After something akin to an opening ceremony, attended by the major studio chiefs and top movie lobbyist Jack Valenti, the two sides started.

There were 16 formal bargaining sessions ranging from as short as 15 minutes to as long as two hours. The rest of the time was filled with more than three dozen less formal meetings to thrash out proposals.

In formal meetings, according to WGA board member Daniel Petrie Jr., words were carefully measured, even when the negotiations got heated or humorous because lawyers from both sides were taking copious notes that could later come back to haunt them.

“Everything that is said across the table creates bargaining history, so people were careful not to inadvertently say the wrong thing,” said Petrie, a former WGA president.

Typically, 30 or so people attended the talks, usually split evenly.

Writers asked to have studio heads at the negotiating table, which also irritated the companies. The logic, according to writers, was to tax the executives’ time so they might make a quicker deal than if they sent labor relations professionals instead. The studios stayed with Counter and his team.

In a separate set of 15 formal meetings during 28 days, the two sides negotiated over “creative rights” issues--such as the involvement of screenwriters in movie making and the use of “A film by” credit for directors. Leading the sessions were DreamWorks SKG partner Jeffrey Katzenberg, Paramount Pictures Chairman Sherry Lansing and Warner Bros. President Alan Horn. For writers, WGA President John Wells was heavily involved.

In debating money, opening salvos came from the beginning when studios “started from zero, “ as negotiator Counter put it. On Friday, he acknowledged it was merely an opening negotiating gambit.

According to Petrie, in one of the first meetings Counter went through 27 separate financial proposals, nixing each one individually because “that’s what starting from zero means.”

Nonetheless, studio executives say they were stunned by the package the guild presented.

“I think the Writers Guild came to this negotiation with a very, very aggressive package and an ambition to seemingly restate the business as opposed to making a meaningful and substantial improvement from the last contract,” Katzenberg said.

In the view of Katzenberg and other studio executives, the proposals could actually cost hundreds of millions because, under standard industry practice, what one guild gets the other guild and unions also get. They say that if writers get the amount they want, actors, directors, musicians and members of crafts unions would also get similar deals.

On Friday, the Writers Guild said the ultimate cost to the entire industry would be only about $227.6 million, the cost of a relatively modest movie when divided up among about a dozen studios and networks.

Monday night, the WGA’s board of directors met to hear the bad news. With the financial issues going nowhere, a meeting scheduled for Tuesday on the creative issues was scrapped. Both sides say some progress was made on creative issues, which have to be blessed by the Directors Guild of America.

On Thursday, studios presented a new financial offer that was immediately spurned by writers. Talks were suspended, and the blackout lifted.

“Things were grinding to a halt. We felt it was time to get to our membership and tell them where things stood,” said WGA board member Victoria Riskin.