Hollywood writers strike as talks fail

Hollywood’s film and television writers went on strike early this morning after last-ditch efforts to negotiate a deal with the major studios failed Sunday.

Despite the aid of a federal mediator and back-channel talks between top writers and studio executives, the sides were ultimately too far apart to bridge the massive divide between them and avert the first writers strike in nearly two decades.

After three months of contentious negotiations, talks broke down Wednesday night when the writers’ three-year contract expired. Although they made minimal headway on some issues Sunday, the parties could not come to terms on such key issues as how much writers are paid when their shows are sold online.

The question now is no longer whether or when they will strike, but how long a walkout will last and how much pain it will inflict.

Both sides are girding for what many believe will be a long and debilitating strike, potentially more disruptive than the 22-week walkout by writers in 1988, which cost the entertainment industry an estimated $500 million.

“Once it starts, it’s going to get ugly,” said one of the guild’s strike captains Sunday.

A strike doesn’t necessarily preclude the writers and producers from continuing to negotiate on a new contract and could even accelerate that process as both sides try to minimize the financial toll it could take.

Negotiators for the Writers Guild of America and the Alliance of Motion Picture and Television Producers spent more than 10 hours in talks at Sofitel hotel in West Hollywood. At 9:30 p.m., writers guild officials walked out of the meeting.

“It is unfortunate that they choose to take this irresponsible action,” alliance President Nick Counter said.

The guild said that although the union had agreed to withdraw its proposal to double DVD pay, which had been a stumbling block in negotiations, producers refused to make concessions in other key areas. Among other things, producers refused to grant the union jurisdiction for most new-media writing, the guild said. They also insisted on a proposal that would allow them to reuse movies or TV shows on any platform for promotional purposes with no residual payment.

“This proposal alone destroys residuals,” the guild said.

Sunday’s talks marked the most substantial meeting since the parties began protracted negotiations this summer, raising a glimmer of hope that a deal might be within reach.

Back-channel efforts by some of the industry’s top writers and chief executives appeared to break a logjam that had stopped the sides from starting the negotiations in earnest.

The apparent headway came amid outside pressure from such respected writers as “ER” creator John Wells, a former guild president, and “Desperate Housewives” executive producer Marc Cherry as well as News Corp. President Peter Chernin, Warner Bros. Entertainment Chairman Barry Meyer and Walt Disney Co. CEO Bob Iger.

A federal mediator brought in last week had coaxed both sides back to the table Sunday.

But ultimately, not enough progress was made to avert a strike.

Even as negotiators were hunkered down behind closed doors, strike captains were sending e-mail notices to guild members and guild directors, informing them where to show up today on the picket lines.

Earlier in the day, writers at the guild’s West Coast headquarters in the Fairfax district had loaded their picket signs onto trucks.

The union had organized a network of 300 strike captains who were ready to stage daily pickets at all the major studios, including Disney and Warner Bros. as well as CBS Television City and NBC headquarters in Burbank.

Guild members were asked to sign up for shifts beginning at 9 a.m. or 1 p.m., captains said. The guild’s East Coast office went on strike at 12:01 eastern time even as talks were still continuing on the West Coast.

“When we asked if they would stop the clock for the purpose of delaying the strike to allow negotiations to continue, they refused,” Counter said.

Chief negotiator David Young, a former organizer of garment workers, carpenters and construction workers, has spent months organizing and mobilizing his members to prepare them for a showdown. That was in evidence Thursday night when 3,000 writers jammed the Los Angeles Convention Center in what was more like a pep rally than a general membership meeting.

Young and Patric M. Verrone, president of the Writers Guild of America, West, have also reached out for support from the Teamsters, whose truck drivers, casting directors and location managers could play a key role in disrupting productions where WGA pickets are set up.

A strike would immediately affect more than 10,000 film and TV writers nationwide, the majority of whom appear to be determined to wage a long fight.

“These are some of the most important issues writers have faced in many years,” said Dan E. Fesman, a writer for “NCIS.” “If we don’t get these protections now, then we don’t know what our futures are going to be.”

As part of its preparations, the guild has amassed a strike fund of about $12.5 million to help provide loans to writers during a walkout. Writers wouldn’t automatically get the money but would have to apply for assistance based on financial need.

Still, a long strike would be a major gamble for the guild. One risk is that members facing financial hardships could resign from the union and choose what is known as “financial core nonmember” status. During the 1988 strike, after several weeks of hardship, dozens of writers opted to do that.

Choosing so-called “fi-core” status allows members to continue working during a strike and keep their benefits, but strips them of their full membership status and their right to vote on contracts. The risk is that their union could refuse to reinstate them as full members in the future.

Several TV studios have reminded employees that they have the option to resign from the guild and still work. “We’re not concerned about our members going fi-core,” said Jeff Hermanson, assistant executive director for the Writers Guild of America, West. He added that only a handful of members have financial core status today.

In contrast, major studios and networks are better equipped to withstand a long walkout because they are owned by deep-pocketed media giants with diverse global businesses. Since the last writers strike in 1988, Hollywood has seen a wave of media consolidations. Disney acquired Capital Cities/ABC Inc. in 1996 and Viacom purchased Paramount Pictures in 1993 and CBS in 2000.

However, there’s no question a strike would hurt their business. To keep production flowing, studios and networks have stockpiled scripts. Although networks have enough shows to carry them through the fall season, a strike stretching into next month would disrupt midseason programs that begin airing in January as well as next year’s TV pilot season. By replacing new episodes of shows with reruns, reality TV and sports programs, networks risk having viewers permanently turn to other forms of entertainment.

One potential financial advantage studios have in the short term is to invoke the force majeure clause in their employment contracts with talent, allowing them to suspend and terminate deals in the event of a strike. Studios could use the clause to shutter expensive projects or unwanted overall deals with talent.

Producers and writers began their negotiations in July. But the talks never went much beyond the two sides lambasting each other’s proposals as they squabbled over meeting dates and such petty issues as the number of chairs in the room.

Talks seemed doomed when producers said they wanted to overhaul the decades-old system of residual payments, setting off an uproar among writers as well as actors, whose contract expires in June.

Producers subsequently took that proposal off the table but it bought them little goodwill among writers, who remained angry that producers were not addressing their biggest issues.

In recent days, however, both sides made some concessions, dropping some of their demands in an effort to focus on larger points of disagreement.

Although studios have refused to budge on the issue of DVD pay, they have shown some willingness to discuss raising residuals that writers get when shows are sold online through services such as Apple Inc.’s iTunes store.

Writers have long complained about the current DVD residuals they receive under a discounted pay formula -- one that gives them about 4 cents for every disc sold -- that dates to 1985. They agreed on the formula based on the high cost of manufacturing VHS tapes. When the video and later DVD business boomed, writers felt shortchanged.

The producers proposal to apply that same rate to digital downloads of films has touched off a firestorm among writers, who fear repeating the mistakes of the past now that digital technology and the Internet are transforming the way entertainment is delivered.

For their part, the studios maintain that DVD sales are needed to offset rising marketing and production costs. They also argued that it was premature to pay higher rates for shows that were sold online as were still grappling with uncertain business models.

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