Writers, studios returning to table

Writers and studio negotiators will return to the bargaining table today amid cautious optimism that the pickets and protests that have roiled the entertainment industry in the last three weeks might soon give way to labor peace.

But it’s too early to predict a Hollywood-style happy ending. Negotiators for the Writers Guild of America and the Alliance of Motion Picture and Television Producers are still far from reaching a new contract to replace one that expired Oct. 31.

It could take several days, if not weeks, to craft a deal, given the complexity of the issues and the mistrust that has characterized previous bargaining sessions, people close to the negotiations say.

Although talks between the parties began in July, they didn’t get serious until Nov. 4 -- the day before writers went on strike. And the sides remain far apart over how much money writers should get paid when their work is sold or reused on the Internet, cellphones, digital video players and other new-media devices.

“They’ve got a lot of work to do,” said Jonathan Handel, an entertainment industry attorney and former associate counsel for the Writers Guild of America, West. “It’s time for both sides to buckle down in order to put this town back in business.”

An estimated 50 TV shows and a handful of movies have stopped production since the strike began, throwing thousands of people out of work and hurting local businesses, particularly those that rely on the entertainment industry.

Both camps have plenty of incentive to have a meeting of the minds. For studios, the strike has been initially more disruptive than the previous writers walkout in 1988, said Brian Walton, who was chief negotiator for the guild then.

“This has real bite to it,” Walton said. “It has been extremely well organized.”

In contrast to the 1988 strike, which began when the TV industry was on hiatus, this strike came in the middle of the fall season, before networks had enough time to heavily stockpile scripts. The work stoppage was helped by a show of solidarity among writer-producers, known as show runners, who joined picket lines and in many cases refused to work at all.

Some of the most popular programs on television have been shut down, including dramas such as “Cold Case” and “Desperate Housewives,” late-night shows and several sitcoms, including “Till Death,” “The Office” and “My Name Is Earl.”

If the strike lasts two more weeks, virtually all prime-time series and sitcoms shot in Los Angeles will halt production, costing the region’s economy an estimated $21 million a day in direct spending, industry officials said.

Networks could save money in the short term by relying more on lower-cost reality TV and game shows. But a longer strike could batter next year’s pilot season and cause a reduction in advertising rates.

The strike may also accelerate the exodus of younger viewers from broadcast networks, which have been losing market share to the Internet and other forms of entertainment.

Dave Smith, a labor economist at Pepperdine University, likens the situation to what happened during the strike and walkout four years ago in Southern California by workers at Ralphs, Albertsons, Vons and Pavilions grocery stores, when nonunionized stores such as Trader Joe’s benefited and some customers didn’t return to those that were targeted when the walkout ended.

“If this leads to permanent changes in entertainment choices, the financial risks [to the networks] are significant,” Smith said.

Although TV networks have been hit hardest, film studios also have been affected. Last week, Warner Bros. postponed production of “Shantaram” starring Johnny Depp, joining several other films that have been delayed because scripts weren’t ready.

The disruption has given the guild some added leverage at the bargaining table. But union leaders also face pressure to hash out a deal. If talks collapse again, studios could use the opportunity to strike a deal with the Directors Guild of America. Although their contract doesn’t expire until June 30, directors already are preparing for early negotiations.

Directors have often negotiated early, thereby setting the terms for writers. Many writers fear that directors could undermine their cause by agreeing to terms on Internet residuals that are less favorable than the ones they are holding out for.

But the divide-and-conquer strategy may not work as well this time for the studios. They also face tough negotiations with actors, who share many of the same concerns as writers. Their contract expires June 30.

Guild strategists had considered having their members work without a contract until next year so they could line up their negotiations with actors. However, that’s no longer considered a serious option now that a strike is underway.

That was underscored recently when a group of show runners that included Carlton Cuse (“Lost”) and Steve Levitan (“Back to You”) moved to jump-start negotiations.

The writers held a flurry of back-channel talks with top media executives, including News Corp. President Peter Chernin, Walt Disney Co. Chief Executive Bob Iger, Warner Bros. Chairman Barry Meyer and CBS Corp. Chief Executive Leslie Moonves. Top agents, led by Creative Artists Agency’s Bryan Lourd, played a key role in the process.

Show runners were concerned not only about the effects on their shows but also the toll on their own staffs. Although most show runners vowed to stop work entirely, many have been providing producer services such as editing episodes written before the strike began.

Studios have sent letters to many show runners threatening to sue them for breach of contract. Studios also have notified some producers that they would suspend their deals in the coming weeks if the strike continues.

Talks are scheduled to begin at 10 a.m. at an undisclosed location.

The two sides will face a tough time bridging their differences. For example, the studios had offered to pay writers a DVD residual rate for movies and TV shows sold through online services such as Apple’s iTunes Store. That amounts to 0.36% of wholesale revenue, far below the 2.5% residual rate writers are seeking for all new-media residuals.

Similarly, studios had proposed paying a residual rate of 1.2% of license fees for shows that are streamed for free, but only after a six-week window. Writers previously proposed a three-day window. They were also livid about a proposal that would allow studios, for promotional purposes, to stream entire movies online without paying residuals.

Another sticking point: The guild wants all Web shows to be covered under its agreement, while studios have proposed limiting pay to only those episodes derived from scripted network shows.

Despite the gaps, some are hopeful. In a recent e-mail to his staff, notable for its conciliatory tone, CBS chief Moonves wrote of the differences: “We continue to believe that with hard work, patience and understanding from both sides, they can be overcome.”

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richard.verrier@latimes.com