Studios Taking Measures To Try And Avoid Strike

Credit: Variety

In a dramatic gesture designed to cool off Hollywood’s strike fever, studios and networks have backed off their proposal to revamp residuals for writers.

Though both sides remain far apart, Tuesday’s move by the Alliance of Motion Picture & Television Producers puts a halt — for a few days, at least — to the pervasive gloom and doom that had overtaken the industry in recent weeks. Fears had been growing that a strike would be inevitable once the WGA’s contract expires on Oct. 31.

Instead, the AMPTP’s move will likely undercut what had been pervasive speculation that some of the studios and nets would welcome a strike and want to goad the guild into a work stoppage. Indeed, the AMPTP’s decision represents the first movement by either side since negotiations launched in July.

Nick Counter, prexy of the Alliance of Motion Picture & Television Producers, made the announcement Tuesday morning as face-to-face talks began. And he admitted that the withdrawal of the much-scorned residuals proposal was crucial to salvaging what have been unproductive and contentions negotiations — which have been most notable for high levels of vituperation and venomous responses by both sides.

“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 in a statement. “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 WGA’s negotiating committee offered a measured response about the withdrawal, stating, “We welcome that, and hope it means the companies are ready to begin serious negotiations.”

The residuals proposal, which has been blasted repeatedly by the WGA as unacceptable, would have altered the formulas for paying residuals so that writers would receive payments only after producers recouped basic costs. The AMPTP had contended that dramatic shifts in showbiz finances — with rising marketing and production costs and a myriad of distribution plaforms — had made the four-decades-old system untenable.

WGA negotiators have insisted that the AMPTP’s proposal was out of the question and had used it as one of the centerpieces of their campaign to seek strike authorization from members. Guild leaders have contended that companies’ accounting on net profit deals has been unreliable; the WGA’s singled out what it sees as fuzzy math used by the companies to keep hits such as TV’s “The Simpsons” and feature films such as “Chicago” in the red.

Counter stressed Tuesday that the ball’s now in the WGA’s court and that the AMPTP now expects the guild to take some of its proposals off the table, such as its demand for doubling DVD residuals.

“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 MyNetwork 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.”

But in a sign that a deal’s still far off, the WGA negotiating committee asserted in its response that there are many other proposed rollbacks still on the table.

“The remaining rollbacks would gut our contract and will never be acceptable to writers,” the panel said. “Moving forward, we have extremely important issues to deal with, including new media, homevideo, jurisdiction and enforcement. 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.”

In its public communications with members, the WGA raised its biggest objections to these AMPTP proposals:

~ that writers receive no residuals on new-media distribution;

~ that the WGA has no jurisdiction over writing for new media, including cell phones and the Internet;

~ that the companies have the right to credit any funds due to a writer against other payments, including overscale compensation and profit participation. The WGA asserts that this provision would have the impact of eliminating residuals on a project for which the writer receives overscale compensation.

~ “gutting” of separated rights, including eliminating the ability of a writer to exploit TV rights if the company fails to do so and making it more difficult for screenwriters to reacquire original scripts.

~ elimination of the requirement that writing credits appear in advertising and publicity.