Talks Collapse, Bringing Strike Into View

March 2 -- LOS ANGELES (Reuters) — Contract talks between the Writers Guild of America and the television and film industry collapsed on Thursday after nearly six weeks of intense bargaining, deepening fears that Hollywood is headed for a crippling strike this spring.

Both the WGA and officials of the Alliance of Motion Picture and Television Producers, which represents the industry in negotiations, said the key sticking points centered on residual payments, which are made as movies and TV programs enter secondary markets, such as videos or TV reruns.

No further talks were scheduled, and WGA President John Wells said his side was unlikely to return to the negotiating table before April 1, a month before the current three-year contract expires.

Guild officials said the industry's latest proposal seeks sharp cuts in residuals for certain television reruns, a freeze in prime-time network residuals, no increases for basic cable reruns of broadcast shows or for videos and DVDs, and only nominal increases in most other areas.

Together with wage scale hikes they said would merely keep pace with inflation, union officials said the overall economic package offered by producers, including health benefits, would amount to a slight decrease from the current pact.

The industry, however, said the union had walked away from a proposal that would have resulted in a net gain of $30 million in residual payments and wages (about 11 percent) over the current pact during the next three years. Producers said that was $82 million less than the union was seeking.

"We are disappointed this round of negotiations has not met with success," Wells said during a news conference at the WGA's headquarters. "There's going to have to be more money in the package for us to make a deal."

Walt Disney Co. President Robert Iger said the industry's proposal was driven by "a great need on our side to manage our costs" in the face of economic uncertainties. (Mr. Showbiz is owned by Disney.)