WGA, AMPTP barking about bytes

New contract swings on Internet

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Read: WGA firm on Net residuals
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Read: AMPTP wants Internet study

Some might expect the WGA and management negotiators to fight like cats and dogs in their big contract talks, which begin Monday, but informed consensus predicts the fur won't really start flying for some time.

The contract to be discussed -- covering film writers and primetime broadcast scribes -- doesn't expire until Oct. 31. Many believe it highly unlikely the WGA would call an immediate strike even then, as its union actor and director colleagues don't go out of contract until July 2008.

With an eye on those time lines, it's possible to view the impending talks in three phases:

-- An initial "Paris peace talks" phase, in which reps debate perhaps not literally the size and shape of the negotiating table but topics still safely described as peripheral.

-- A more substantive stage of the negotiations, kicking in by August or so, in which the most difficult issues are acknowledged but discussed in such broad terms as to defy easy resolution or compromise.

-- The parties finally get down to brass tacks.

The timing of that final stage could depend on if and when SAG or the DGA commences early talks on their film and TV contracts.

SAG has become a close ally of the WGA, even naming an advisory committee to the writers' talks. However, the DGA arguably bears closer attention, as the directors have a knack for knocking out quicker agreements, and any such early DGA pact could serve as an effective template for the other guilds -- whether they like it or not.

Meanwhile, one veteran entertainment negotiator suggested the WGA talks with the Alliance of Motion Picture & Television Producers could start and then break off for a breather while the existing contract remains in effect if the parties decide they are too far apart for productive dialogue.

"You don't know until you're in the room," the negotiations veteran said. "Conventional wisdom is they won't be able to reach any agreement in the short term, and the contract will expire, but they'll continue to talk. But if you're not able to reach an agreement when everybody knows what the main issues are this far in advance, you're not likely to reach an agreement at the 11th hour."

Members of the WGA West and East recently gave overwhelming approval to a lengthy list of demands negotiators will take into talks.

Perhaps chief among those is a demand for "coverage and minimums for writing for the Internet and other nontraditional media," along with a resolve to "increase initial compensation in all areas."

WGA negotiating committee chair John Bowman insists he's keeping a good thought when it comes to prospects for reaching a speedy new collective-bargaining agreement.

"We have a lot of time to hammer out a deal by the end of October," he said. "But what we have to see from management is a good-faith willingness to bargain on the issue of the Internet.

"To date, we've seen an odd unwillingness to negotiate this," Bowman added. "They're saying things like we challenge the whole concept of residuals. Well, for writers, that's like a 300-year-old established concept, so they're making a lot of irresponsible statements. And though I assume it's just a bargaining posture, I guess were going to find out."

Still, there are numerous other issues, besides new-media compensation, to be hashed out.

The guild has been pressing jurisdictional issues in cable TV and animation. The WGA also is seeking compensation boosts at fledgling networks CW and MyNetworkTV and on TV soaps and game shows.

On the other hand, expanding health and pension benefits "is not a priority going into this negotiation," other than a cost-of-living adjustment, Bowman said. He also seemed to indicate that guild negotiators might settle for the status quo formula for DVD residuals, provided substantive new Internet compensation is secured.

Three years ago, a quest for sweeter DVD compensation ultimately proved quixotic, and shifting industry business models make new-media formulas more relevant to the current talks.

"We want to represent everything that moves on a screen -- that's our ultimate goal," the guild negotiator said. "We have to get a fair deal here in the Internet, and you can't give anything away."

As for the management proposal to delay paying residuals until basic projects costs are recouped, he quipped, "You know that accounting in Hollywood is more of an art form than a science."

Some might say the same thing about Hollywood contract negotiations.

The WGA compiles its negotiating wish list, or "pattern of demands," as part of its formal pretalks process. Yet even paying mere lip service to each of the stipulated issues at the bargaining table should keep negotiators yakking for weeks.

Then will come the inevitable bickering, many believe.

"The companies are just going to say get lost on DVDs," predicted one longtime negotiations watcher. "As for the Internet stuff, (WGAW president Patric) Verrone is trying to set things up such that all he has to do (to keep membership happy) is to do something about new media. But I think a significant portion of his own slate got into this to do something about the DVD formula."

With two such two hot-button topics in the mix amid the broad array of other issues, the industryite added, "I think it's 50-50, at best, whether there's a deal Nov. 1."

If the current agreement expires with talks dragging on, the parties could go more public with their respective messages. As with many subjects, the WGA and AMPTP tend to think differently when it comes to getting their word out to the general public.

Although labor and management tend to respect the confidential nature of negotiations once talks begin, their press philosophy in the buildup to those discussions has displayed contrasting instincts. Labor-side thinking tends to be that less is more when it comes to public pronouncements, while management often shows a more loquacious bent.

AMPTP boss Nick Counter and his reps have frequently offered their perspectives on labor-related topics in recent months. When reporters began calling for interviews about the looming negotiations, spokeswoman Barbara Brogliatti assembled top executives of member studios and networks at AMPTP headquarters for a dozen invited journalists (HR 7/12).

"We see new media as being a critical issue for both sides," Counter said in the Wednesday briefing. "We'll be proposing a study (because) we think it's too early to understand the economic fundamentals of new media and how they interact with new media."

The guilds consider any suggestion of tabling the issue of new-media compensation during a study a nonstarter, he acknowledged, so management also has other proposals for hashing out a contract.

Yet that didn't stop Warner Bros. chairman and CEO Barry Meyer and other execs on hand for the briefing from floating an even more controversial proposal: The study would aim to replace current residual models with a plan that allows studios first to recoup production, marketing and distribution costs on film and TV projects before paying any residuals.

"We just feel the study should be done on the basis of profitability," Meyer said.

When it comes to new-media income, CBS Corp. chief Leslie Moonves stressed, "Right now, it's a drop in the bucket."

One well-placed source said it's unlikely the studios would press their proposal for revising residual structures to the point of a strike.

"Do I believe they would shut down the town to change something that has been in existing for 20 years? No," the source observed. "But I do believe (studio execs) believe the current system is unfair to them, just as the writers believe they should get increased compensation for their work."

By contrast to the AMPTP presentation, WGA officials have tended to issue statements only when forced by events and circumstances. Verrone and WGAW exec director David Young declined interview requests for this article.

But the WGA's Bowman succinctly characterized his feelings about reaching an agreement by Oct. 31.

"If management bargains in good faith, we will," he summarized before adding, "They know they have to give us something on the Internet."

A complete rebuff on Internet compensation could trigger the first major writers strike since 1988, many observers agree.