Studios, writers quit talks at deadline; strike looms

Times Staff Writer

It’s a script many had hoped would not be written. Hollywood’s film and TV scribes and their employers failed to reach an agreement before their contract expired at midnight Wednesday, setting the stage for a possible showdown that could ripple across the streets of Los Angeles and spill into America’s living rooms.

Despite the presence of a federal mediator this week and more than a dozen bargaining sessions since July, negotiators for the Writers Guild of America and the Alliance of Motion Picture and Television Producers broke off talks six hours before the deadline.

The development doesn’t guarantee an immediate walkout by writers but certainly heightens the prospect of Hollywood’s first major strike in nearly two decades. Although writers could continue to work without a contract, a more probable scenario is a strike being called as early as Friday, people close to the guild said.

In a statement, the alliance said talks foundered after its chief negotiator, Nick Counter, outlined the producers’ opposition to raising the pay writers received when their work appeared on DVD and is sold via the Internet -- key guild demands.


“We want to make a deal,” he told WGA negotiators. “But, as I said, no further movement is possible to close the gap between us so long as your DVD proposal remains on the table.”

The alliance said WGA members refused to meet today. “When they were asked about Friday, they advised they would call us,” the statement added.

Writers Guild officials said it was the alliance that brought negotiations to a halt.

“Every issue that matters to writers, including Internet reuse, original writing for new media, DVDs and jurisdiction, has been ignored,” the guild said in a statement. “This is completely unacceptable.”


The dispute comes as Hollywood is in the throes of a digital revolution that is transforming the way entertainment is delivered, heightening friction between labor and management.

The writers’ previous strike, in 1988, lasted 22 weeks and cost the industry an estimated $500 million. Economists believe that a strike could be more painful this time around because the entertainment industry has grown, accounting for roughly 7% of the county’s economy, or about $30 billion annually.

Writers Guild members had voted by a 90% majority to authorize their leaders to call a strike anytime after their contract expires.

The guild was expected to wait at least until after a general membership meeting tonight. Guild leaders were anticipating a large turnout and had booked space at the Los Angeles Convention Center. About 12,000 writers are covered under the contract, with about 7,000 working regularly.


The meeting will “update everyone in person on negotiations and what our next options will be,” Patric M. Verrone, president of the Writers Guild of America, West, told guild members in an e-mail.

A writers strike wouldn’t shut down production as an actors strike might but would cause plenty of disruption. Picket lines could go up across town at various studios.

Among the first TV fans affected would be those who watch live late-night programs, such as Jay Leno’s show on NBC, David Letterman’s on CBS and Jon Stewart’s on Comedy Central. Television networks have been stockpiling scripts for weeks, giving them enough episodes of prime-time programs to last through most of the fall season.

Some TV and film productions could also be disrupted if Teamsters truck drivers, production coordinators and location managers refuse to cross picket lines.


Leo Reed, head of Teamsters Local 399, this week urged his members not to cross picket lines, giving writers a boost of support. It’s uncertain, however, how many drivers and others would show their solidarity.

The Screen Actors Guild, whose leaders share many of the writers’ concerns, has urged actors to walk the picket lines in their free time. However, neither actors nor members of the Directors Guild of America could strike until their contracts expire June 30.

Writers won’t receive much support from the International Alliance of Theatrical Stage Employees, which represents thousands of film crew members that work behind the scenes of shoots. IATSE has threatened legal action over the guild’s rules that bar animation writers from working during a strike -- even if they also belong to its Animation Guild Local 839.

The current guild leadership has spent months preparing for a walkout, assigning “strike captains” to mobilize members. Guild leaders repeatedly have signaled their readiness to walk out immediately, reasoning that they could inflict more damage in the middle of the fall TV season than if they waited until next year, when studios would have accumulated more scripts.


Writers Guild leaders also were said to be concerned that the Directors Guild of America would negotiate an early deal, potentially undercutting the writers’ goals. The Directors Guild has laid the groundwork for negotiations to begin this year, well before its contract expires in June.

Striking so soon carries big risks for the writers union.

“The guild would look completely unreasonable if it struck immediately, particularly since they’ve introduced a federal mediator,” said Jonathan Handel, an entertainment industry attorney with TroyGould in Los Angeles and a former associate counsel for the Writers Guild. “There’s no need for them to drop that arrow from their quiver so quickly.”

Few were surprised by the logjam in talks, given how far apart the two sides have been on major issues. At one point this week, the parties couldn’t even agree on where to meet.


“With the late start in negotiations, this was predictable,” said veteran entertainment attorney Howard Fabrick, of Akin Gump Strauss Hauer & Feld. “It’s a consequence of the way both sides approached collective bargaining this year, choosing to do so in a public forum rather than across the table where deals get made.”

Writers maintain they were shortchanged years ago, when they agreed to a discounted pay formula for home video sales, only to see that business flourish. They currently receive about 5 cents for every DVD sold. And they’re determined not to make the same mistake again, now that entertainment is undergoing another transformation, this one on the Internet.

They are seeking to double the current residual rate for home video sales and get higher rates for films and TV shows that are sold online, as well as residual payments for shows streamed for free over the Web.

Studios say the demands are economically untenable. They’ve rejected the proposal to raise home video payments, maintaining that DVD sales are needed to offset rising marketing and production costs in film and television. They oppose paying higher rates on digital downloads or getting locked into fixed pay formulas for online shows when they’re grappling with uncertain business models.


The two sides also have squared off over reality TV. The Writers Guild wants members who work on so-called unscripted shows to have union benefits just like their peers. They’ve filed lawsuits against producers of reality TV shows, alleging violations of labor laws, and backed a strike against producers of the CW’s “America’s Next Top Model.”

Producers have argued that writers for reality TV aren’t writers in the conventional sense and claim the union has no jurisdiction.

But the dispute also has been fueled by a clash of personalities.

On one side is Counter, a scrappy veteran negotiator who for more than two decades has held together the often-fractious producers alliance.


He has often sparred with chief union negotiator David Young, a former veteran organizer of construction and garment workers. He was named the West Coast guild’s executive director last year. This is his first major negotiation in the entertainment industry.

Since he was hired, Young has favored confrontational tactics associated with blue-collar unions like the Teamsters, such as staging pickets and protests at industry panels. The tactics have irritated Counter, who has publicly criticized Young as reckless and inexperienced.

“The fact that the two men don’t evidently have any kind of relationship of trust at all would seem to mean that it’s difficult, if not impossible, to do the kind of off-the-record exploration that often leads to breakthroughs,” said Dan Petrie Jr., past president of the WGA West.

Likewise, there’s no love lost between Counter and Verrone, the animation writer who has been guiding the guild’s strategy, along with a negotiating committee made up of top writer-producers including Shawn Ryan (“The Unit”), Neal Baer (“Law & Order Special Victims Unit”) and Marc Cherry (“Desperate Housewives”).


None of these show runners has played a role similar to that of John Wells (“ER,” “West Wing”), the former guild president and writer-producer who helped avert a strike in 2001 by serving as a unifying voice.

As for the alliance, their group is dominated by such heavyweights as Walt Disney Co. Chief Executive Robert Iger, News Corp. President Peter Chernin, CBS Corp. CEO Leslie Moonves and Warner Bros. Entertainment Chairman Barry Meyer.

So far at least, none of them has emerged as a potential broker in the mold of Lew Wasserman, the legendary former agent and MCA chairman who frequently used his clout to keep the peace in Hollywood.