'Recoupment' removed

AMPTP withdraws sticking point in talks

The Alliance of Motion Picture & Television Producers has reshuffled the deck in its contract talks with the WGA, dramatically withdrawing a controversial "recoupment" proposal in the expressed hope of getting the guild to deal at the bargaining table.

AMPTP president Nick Counter said Tuesday that he no longer seeks to revise current residual formulas to allow studios to recoup certain basic costs before making residual payments in the future. The proposal had been on the table from the start of contract talks in July, and after being summarily rejected by the guild, it remained the prime obstacle to progress in negotiations.

The WGA's current film and TV contract with the AMPTP expires Oct. 31, and the guild has been conducting a strike-authorization vote, to be concluded by Thursday. If authorized, guild leaders could call a strike against studios and networks once the pact has expired, and such a move might be deemed strategically beneficial.

"In the overriding interest of keeping the industry working and removing what has become an emotional impediment and excuse by the WGA not to bargain, the AMPTP withdrew its recoupment proposal," Counter said. "By taking the recoupment formula off the table, we haven't solved the problems that the formula was designed to ameliorate. But as we have said repeatedly, we are committed to making a deal that is fair and reasonable."

The AMPTP made its announcement during a midday break in a negotiating session at its Encino headquarters. The WGA and AMPTP then reconvened for another few hours of talks and sidebar discussions, with the guild issuing its own statement by midafternoon.

"Today, the AMPTP took one of its many rollbacks off the table," the WGA said. "We welcome that and hope it means the companies are ready to begin serious negotiations. The remaining rollbacks would gut our contract and will never be acceptable to writers."

The guild also seemed to indicate its intent to press on the issue of compensation sweeteners and other demands.

"Moving forward, we have extremely important issues to deal with, including new media, home video, jurisdiction and enforcement," the WGA said. "By maintaining our resolve, we will come out of these negotiations with a good contract that not only benefits writers but the entire entertainment industry and the communities that depend on it."

The AMPTP remains opposed to WGA calls for pay boosts, Counter said.

"Upon removing the recoupment issue, we made it patently clear that the producers will not agree to increase residual payments for videocassette/DVD use (including electronic sell-through), for reruns on the CW or MyNetworkTV or for programs made for pay television or basic cable," he said. "We now expect the WGA leadership to get down to the business at hand and do what it takes to reach a new labor agreement."

There were varying opinions on whether management's recoupment demand was a serious contract proposal or merely a negotiating strategy meant to ease the guild off costly demands. Some observers have suggested the WGA-AMPTP stalemate might spur the DGA to initiate its own early contract talks with the AMPTP, with few expecting the directors to look any more kindly upon a recoupment scheme than the writers.

The AMPTP's main film and TV contracts with the DGA and SAG are set to expire June 30. Some suggest the DGA could begin early talks on a new contract as soon as next month, while SAG is considered likelier to let the WGA talks play out considerably further before jumping into the mix.

For the time being, SAG has named an advisory committee to monitor the WGA talks. The DGA already has formed a negotiating committee, which has begun meetings on issues and strategy.

With the AMPTP's recoupment proposal now off the table in the WGA talks, it will bear watching if focus returns to the equally hot-button topic of Internet residuals. No negotiations are scheduled for today, but the parties are expected to caucus separately.

The WGA wants management to increase compensation for work distributed over the Internet and other new-media platforms. The AMPTP proposed studying that issue for three years — a proposal rejected by the guild and withdrawn by management after the parties' first negotiating session July 16.

"Taking the recoupment proposal off the table is probably the right thing to do because they were probably not going to get it anyway," said Norman Samnick, a labor consultant with the advisory firm Bryan Cave in New York. "They want to get on with the negotiating."

As for whether the AMPTP's move might foster progress on new-media compensation or other issues, Samnick demurred. "It's tough to say," he said. "These sorts of negotiations can be very emotional."

Samnick is the chief labor negotiator for the music recording industry in ongoing talks with AFTRA. The next bargaining sessions in those long-running talks are set for Nov. 5-6.
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