Labor Talks May Go Off-Script

Amid clash over new media and residuals, WGA signals a tactical shift

With negotiations between the Writers Guild of America (WGA) and Alliance of Motion Picture & Television Producers (AMPTP) off to a rocky start, West Coast Guild President Patric Verrone told B&C last week that the union wants to address the thorny issue of residuals as soon as possible.

That would represent a major change in course for the WGA, which has a reputation for being a bargainer that delays serious negotiations until the last minute.

The apparent about-face comes at a time when the stakes have never been higher. The WGA is seeking a bigger piece of the pie from content distributed on the Internet and other new-media platforms. The networks and studios, meanwhile, are demanding the most significant change to the entire residuals formula in nearly half a century.

Talks are expected to resume this week or next after AMPTP concludes agreements with Teamster drivers and four craft unions whose contracts expire July 31.

Many of Hollywood's veteran hands at labor negotiations are likely to be skeptical of Verrone's desire to quickly address the meaty issues standing in the way of an agreement.

They have assumed the writers would stick to the same old script: wait until five or six days prior to the Oct. 31 expiration of the WGA's contract before discussing the unsolvable core issues.

According to that scenario, the guild would allow its members to work under the provisions of the old pact for several months, then hit the picket lines shortly before the expiration of deals next June for the Screen Actors Guild (SAG) and Directors Guild of America (DGA).

Some believe the WGA's closely guarded strategic plan is to band together with the other unions. The solidarity would bolster the writers' leverage, which the industry has diminished by stockpiling scripts and loading up on reality shows and extra episodes of existing series. With actors considered most critical to continued TV and film production, the three unions could threaten a mid-summer strike next year intended to halt production on 2008-09 season series.

Another plot twist

However, if Varrone's wish to move quickly doesn't preclude that scenario, there could be another plot twist in the works. Despite reports that the WGA and DGA, considered the most moderate of the three guilds, have finally made peace after years of bad blood, many studio executives are skeptical.

According to sources familiar with the situation, the hope is for a replay of 2004, when the DGA cut an early agreement on DVD residual rates, leaving the closely aligned WGA and SAG to follow suit. Hollywood rewarded DGA members with retroactive increases for cooperating while penalizing writers. The DGA has remained silent about its options.

But the Verrone-led WGA represents an entirely new regime. And he and other executives indicated that, with so much at stake, the union is eager to address the sticky issues.

Meanwhile, talks between the WGA and AMPTP grew more contentious after two meetings to exchange proposals last week. An angry AMPTP yanked its offer to keep the current standard residuals, health and pension system in place for three years during a joint study of new media's impact, after the WGA rejected the proposal. Union officials labeled it a “stall tactic.”

That left only one offer on the table, a “recoupment-based” system—the unions dismissed it as “profit-based”—in which writers would forego residuals for an unspecified periodunless the companies can recover the costs of development, production and marketing.

The guild quickly rejected that all-or-nothing offer, with John F. Bowman, the WGA's negotiating committee chair, saying he believes that the networks and studios are bluffing. He also says that the existing residuals system is easier to audit and called the AMPTP plan a way to load up on “production costs” while never paying residuals.

Industry executives countered that it is executive producers, who are WGA members, that control their shows' purse strings.