Hollywood Writers Agree to Tentative 3-Year Contract

Hollywood studios and writers finally called it a wrap Friday afternoon, ending a weeklong cliffhanger by reaching agreement on a new three-year labor contract that averts what would have been a pummeling entertainment industry strike.

The agreement was valued by the Writers Guild of America and the industry’s Alliance of Motion Picture and Television Producers at about $41 million over three years, less than the nearly $100 million writers had hoped for.

“I just want to say this is one of the most difficult negotiations we’ve had in many years because of the complexity of the issues facing the industry today, both for writers and for producers and our member companies,” said chief industry negotiator J. Nicholas Counter.

Michael Mahern, co-chair of the guild’s negotiating committee, said of the issues: “I can tell you from personal experience that they were all very difficult. There were no pins that fell over on their own. They all had to be bowled down in the process. And it’s not just us bowling. There was bowling on both sides.”

The agreement gives writers some key financial gains in payments for foreign TV, the Fox network and for original programs made for pay-TV channels such as HBO and cable channels such as Lifetime.

But they failed to get a boost in two critical areas: residuals for reruns on cable TV of network shows such as “ER” and the payment formula for when their work is sold on videocassette and DVD.

On so-called creative-rights issues, writers made some gains, such as being invited to premieres and press junkets and the establishing of “preferred practices” in which writers, without objection from directors, can visit sets, be included in key meetings and be consulted before being replaced.

But in the end, they tabled one of their most sought-after issues: trying to get studios to rein in the routine awarding of “A film by” credits to movie directors.

The news that the writers settled was greeted with relief, partly because it substantially eased fears that actors will strike this summer, an action that would shut TV and film production.

Back-to-back strikes by writers and actors would have devastated the Los Angeles economy. A study by the Los Angeles County Economic Development Corp. estimated the potential damage at $500 million a week. A study, commissioned by Los Angeles Mayor Richard J. Riordan as part of a campaign to pressure the two sides, estimated the loss at 81,900 jobs and $6.9 billion in income for Southern California if strikes lasted from May through October.

Reacting to the news, Riordan said, “a cloud has been lifted from the Los Angeles economy” and that “the same spirit of compromise will continue to lead us to a similar resolution between the actors and the producers.”

In a statement, the Screen Actors Guild and the American Federation of Television and Radio Artists said the news was welcome but that they “look forward to analyzing the new WGA deal in detail to see if it will be helpful in finding a way to address the specific needs of actors in our upcoming negotiations.”

The deal, announced at 4 p.m., followed a week of tensions in which several sticking points threatened to unravel the deal.

In particular, screenwriters complained during the week that they weren’t getting much and the deal was weighted toward TV writers.

That led to a last-minute sweetener in the form of a $5,000 flat payment when their films appear on DVD. Technically, that gives studios the right to publish the script on the DVD, although sources describe the payment simply as a “creative way” to give screenwriters a $1-million boost in payments.

Writers will receive a 1.2% payment when studios sell movies to be viewed on developing video-on-demand systems, similar to the way pay-per-view payments work, but many new technology areas were tabled.

After fighting the issue for years, on Thursday the writers abruptly elected to take it off the bargaining table after it became a major sticking point. Writers who felt most strongly about it did not want to accept a compromise that the Directors Guild of America had proposed, which would have virtually eliminated the credit being given to first-time directors.

Some writers were disappointed with the details and the process but were happy it had ended.

Ed Solomon, who wrote “Men in Black” and “Bill and Ted’s Excellent Adventure” said, “I’m really happy for all the people of the community that would have been adversely affected had there been a strike. I hope the next time the companies will simply come to the table with a fair deal and we can avoid all of the stress caused to the town.”