Talks Collapse, Bringing Strike Into View
March 2, 2001 -- 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.)
Industry executives said it was the union that broke off talks, but Wells said the decision to suspend negotiations was mutual.
Strike Fears DeepenThe talks began on Jan. 22 amid the widely held view that a strike by the Writers Guild's 14,000 members was virtually inevitable once their current labor pact expires on May 1. A second walkout by 135,000 unionized actors is also likely when the Screen Actors Guild contract runs out two months later.
Chances of averting a strike appeared to have brightened in recent weeks, as negotiations between the writers and producers continued far beyond the union's original two-week deadline for reaching a settlement.
Now, though, the collapse of talks gives new weight to the prospect of labor unrest in Hollywood. Anticipating twin work stoppages by writers and actors this spring and summer, TV and movie studios for months have been rushing films and small-screen shows into production and stockpiling scripts.
The last strike by the WGA, a five-month walkout in 1988, delayed the start of the fall TV season.
The two actors unions — the Screen Actors Guild and the American Federation of Television and Radio Artists — have yet to schedule contract talks with TV and film producers.
In October last year, the actors' union settled a bitter six-month strike against the advertising industry that also centered on residual payments.
Due to overlapping demands on economic issues, a settlement of the writers' contract would make it easier for producers to clinch a deal with the actors' unions before their contract expires July 1. Along with higher residual payments, the writers want a greater say in the creative process, including greater access to movie sets and involvement in the overall filmmaking process.
The producers alliance and the Los Angeles Economic Development Corp. have projected that a production shutdown resulting in dual strikes by writers and actors would cost the region at least $2 billion a month, not including the ripple effects on the housing, retail, and tourism industries.