Writers reconvene talks with studios

With strike jitters running high in Hollywood, screenwriters and studio executives resumed contract talks Wednesday, nine weeks after the two sides exchanged proposals and retreated to neutral corners.

The outcome of negotiations on a new three-year labor pact covering 12,000 members of the Writers Guild of America is expected to hinge on issues related to how the Internet has altered the economics of show business.

The renewal of talks came a day after the West Coast wing of the guild announced its members had overwhelmingly reelected a slate of officers led by Patric Verrone, its president who first won control in 2005 promising a more aggressive stance in labor negotiations.

In published remarks, Verrone said he was hopeful the union could reach a “reasonable deal” with producers by Oct. 31, when the current contract expires.

Verrone’s statement contrasted sharply with comments Tuesday from one leading Hollywood executive, DreamWorks Animation SKG Inc. Chief Executive Jeffrey Katzenberg, who said he was fearful that the gap between the two sides would prove too wide for a strike to be avoided.

Although no strike threat has been issued by the union, film studios and TV networks are treating Oct. 31 as a de facto deadline as they stockpile scripts and speed up production on some projects as a precaution.

“We’ve been preparing since May,” one industry insider told Reuters. The guild in turn has been mobilizing to make strike preparations and has set up a command center in the lounge of the guild’s West headquarters, a spokesman said.

Hollywood screenwriters last walked off the job in 1988 in a 22-week strike that delayed the fall TV season and cost the industry a reported $500 million.

Many in Hollywood, however, have expressed greater concerns about the possibility of a strike by unionized actors, whose contract with producers expires at the end of June 2008.

The current talks center on competing proposals to revamp the decades-old “residuals” system by which TV and film writers are paid extra when their work goes beyond initial broadcast or theatrical release into reruns, DVDs or other outlets.

The guild is pushing especially hard to expand residuals for TV and film content that is reused on the Internet and other digital platforms, such as cellphones and iPods.

The studios say those demands would stifle growth at a time of rising production costs, tighter profit margins, greater piracy and competition from the Web. They proposed deferring negotiations on those issues pending a three-year study.

After the union rejected the idea of a study, producers came back with a plan for overhauling all residuals. Under that proposal, payments would be withheld until the studios had recouped costs for development, production, distribution and marketing.