Writers Guild, Studios Moving Toward Deal, Insiders Say

Studios and writers on Sunday began creeping toward a settlement on a new contract, with the two sides expected to accelerate their talks with just two days remaining before the Writers Guild of America contract expires.

Some labor and industry executives, many of whom have been in contact with both sides, say they expect a deal sometime this week.

People close to both sides cautioned that talks remain volatile, citing the bitter breaking off of negotiations March 1 just as it appeared the Writers Guild and the industry’s Alliance of Motion Picture and Television Producers were making progress. One source close to the studio side added that some companies, notably Walt Disney Co., continue to take a hard line.

Additionally, sources Sunday night also expressed frustration at the slow pace in dealing with differences over money issues that are at the heart of the negotiations, saying both sides are only “chipping away.” They noted that Sunday’s session was spent entirely on “creative issues” affecting screenwriters, such as their involvement in the filmmaking process and how liberally “A film by” credits should be awarded to directors.

Unlike money issues, these disagreements aren’t expected to touch off a strike because two-thirds of the guild members are TV writers. As a result, sources said talks will almost certainly be extended beyond the contract’s 12:01 a.m. Wednesday expiration time.

But sources close to the studio side said producers have told writers not to expect automatic extensions, insisting that the studios will agree to go beyond the expiration date only if they believe a deal is nearing.

Sticking to a self-imposed news blackout, both sides declined comment.

Separately, the boards of the Screen Actors Guild and the American Federation of Television and Radio Artists announced over the weekend that they formally approved contract demands for their upcoming talks with studios. The acting unions said they will make the specifics public at a “strategically appropriate” time. But, like writers, residuals are known to be the main issue.

SAG and AFTRA said the proposals are “thought to be one of the most streamlined and focused in the history of these negotiations.” Past negotiations often have been bogged down by dozens of minor negotiating issues. The contract between actors and studios runs through June, with talks expected to start in mid-May.

As for the writers’ talks, several recent developments point toward the likelihood of a settlement soon, notably uncertainty over the economy that has put pressure on both sides to resolve their differences without a disastrous strike.

But another development that has received far less attention is a string of recent blockbuster deals to buy cable rights to hit TV shows, which studios and labor officials familiar with the talks believe has markedly eased pressure on one of the stickiest issues--the residuals writers get when their work reruns on cable.

In deals last month, Bravo paid a record $1.2 million an episode to rerun “The West Wing.” Then TNN paid a reported $1.6 million an episode for the new hit “C.S.I.: Crime Scene Investigation” that airs on sister network CBS. USA Network is paying in that range for “Law & Order: Special Victims Unit” produced by one of its units.

Because writers get 2% of the license fees paid when a cable channel buys those programs, studios argue that writers are reaping lucrative sums from those deals. Writers have argued that cable deals often involve selling to sister channels at below-market rates. But the “C.S.I.” and “Law & Order: Special Victims Unit” sales involved sales to related companies.

Labor and industry executives close to the negotiations believe that studios will have to budge a little on a few points to allow WGA negotiators to return to their members with something of substance. One likely area is in residuals paid by the Fox network, which enjoys a discount negotiated when it was a fledging network. Even Fox’s rivals believe that rate is unfair.

Other likely areas where studios may budge are in payments for movies made for pay TV channels such as HBO, and money for pay-per-view films.

The one area that has been labeled a “rollback” by writers--a studio proposal to cut the amount writers get when a show is rerun immediately on a cable network--is viewed by those close to the talks as a bargaining chip that probably will be scrapped. Less clear is how much studios will budge on payments writers receive when their work airs on foreign TV.