Studios, WGA End Blackout

Contract talks between Hollywood writers and studios abruptly turned south Wednesday, as each side ended a media blackout and criticized the other’s offer.

The development significantly increased tensions in the bargaining, which had continued after a three-year contract lapsed Sunday. Writers and studios are at loggerheads over major issues such as healthcare contributions, money for DVD sales and pay TV residuals.

The talks were adjourned until next Wednesday. On Monday night, writers will hold an informational meeting at the Sheraton Universal Hotel.

Despite the pause and the crossfire, few Hollywood executives or union officials expect a strike. Writers last walked out in 1988 for five months -- costing the industry an estimated $500 million.

In a statement, the 11,000-member Writers Guild of America said it had offered studios a one-year deal, similar to the one producers this year granted the Screen Actors Guild. The union contends that the arrangement will keep the industry working and safeguard the fall TV season.

The guild called a three-year proposal from studios inadequate, saying it offered too little money to the union’s health fund, a small increase for work that appears on pay television networks such as HBO and no added money for sales of DVDs. The DVD payments have been a key point in the talks.

The union also said studios and major networks didn’t offer to give additional money for work sold over the Internet, and have refused to discuss expanding jurisdiction of the guild to animation, reality and nonfiction shows.

“We’re quite apart on a three-year deal,” said Daniel Petrie Jr., president of the WGA, West. “It’s nowhere close. This would set us back.”

J. Nicholas Counter, president of the Alliance of Motion Picture and Television Producers representing studios and the major networks, said the proposal wasn’t the industry’s final offer.

Counter said the studios were prepared to boost their healthcare contribution when negotiations reconvene and were close to what the WGA has demanded on other issues, such as the basic minimum payment for writers. Counter also said that the studios might raise their offer on pay TV compensation.

Regarding DVDs, Counter said the writers’ one-year proposal didn’t address that topic, and that the studio proposal doesn’t either.

Counter said studios clearly wanted a longer term than one year in any new pact.

“We think we should keep the town working for three years, not one year,” said Counter. “The normal term for agreement is three years. That’s standard.”

In their statement, the writers said their health fund required an additional $43 million over three years, but that studios were offering $10.6 million, which would require more cuts in benefits and costs.

Writers asked that residual payments for pay television be based on a formula now used for directors. That formula pays $9,445 for a half-hour program and $16,000 for a one-hour show in the first year, declining after that.

Although writers consider bolstering their healthcare benefits the most important issue, the most difficult issue by far is DVDs. Writers complain that studios shortchange them by using a formula from the 1980s when videocassettes were just taking off. Studios argue that DVD sales only help offset soaring costs to make and market films.