MBA Negotiations Start Today

From Variety:

At a moment when all industry planning seems keyed to a possible strike, talks between Hollywood's talent guilds and their employers are finally about start.

The Writers Guild of America, studios and networks will launch Monday morning what are widely expected to be bitter negotiations at the Encino headquarters of the Alliance of Motion Picture & Television Producers.

Pre-bargaining rhetoric has been particularly rancorous. Writers want a guaranteed cut of the revenues from new-media platforms and increased jurisdiction; companies are insisting they need to revamp the residuals system so that they can recoup before letting others share the wealth.

The two sides are at odds over the health of the business, with the WGA asserting that showbiz is in excellent shape via a bulletin mailed to its 12,000 members last week. But top execs warn of soaring costs, declining profits, audience fragmentation and a future resembling that of the battered music business.

The WGA's also deemed the companies' centerpiece demand — a contract extension, with a concurrent study to institute a recoupment-based residuals system — as a non-starter. The companies also want the Screen Actors Guild and the Directors Guild to agree to similar proposals; SAG's already said it's not interested.

When the WGA and company negotiators formally meet for the first time Monday, they'll spend the first day presenting their complete proposals. Only the first week of negotiations have been scheduled.

At this point, the two sides appear so far apart that it would not be a surprise if there's no deal when the WGA's current three-year contract expires on Oct. 31.

The Writers Guild's gone past the expiration in the last two negotiations — five months past in 2004, when it wasn't able to budge the companies to sweeten DVD residuals and opted for the DGA to push that proposal. The DGA, however, reached a deal bumping up health-care contributions with no change in the homevid formula; the WGA and SAG accepted similar contracts soon thereafter.

The inability to improve the homevid formula during a time when DVD revenues were soaring was particularly irksome to the current WGA leaders — so much so that they ran on a platform in 2005 promising a more confrontational approach to negotiations and easily won. A few days later, they fired longtime topper John McLean and replaced him with organizing chief David Young.

The negotiations also represent a test for Young, whose background prior to joining the WGA in 2004 was in the garment and construction industries. His focus has been on building guild unity, staging public events to take on employers, organizing non-union work and bolstering WGA research — tactics that have alarmed the companies.

The harder line by WGA leaders has provoked worries that there will be a writers strike on Nov. 1, once the contract has expired. But it's much more likely that the WGA will tell its members to keep on working under terms of the expired contract, just as it did three years ago.

The SAG and DGA contracts both expire on June 30 — a date that's now cemented in the minds of feature producers and execs as they maneuver to get projects completed by then. If either guild strikes, the impact would be profound, with most production closing immediately.

If there's no deal with the WGA, it's more likely that the companies would prefer to make some kind of deal with the directors. The DGA has struck once, for a few hours; it prefers to start negotiations at least six months prior to expiration, contending that's when companies will give the best deal in exchange for labor peace and security; and it prides itself on taking a realistic approach to negotiations.

How SAG fits in>> 


Read more about Contract 2007>>