Top bosses plot to prevent strike

Suits plan to propose study group

By DAVE MCNARY

Counter

Slocum

Allen

Hollywood's top execs are finally sitting down to discuss a possible strike.

With worries mounting that upcoming contract talks will be both contentious and complicated, heads of studios and networks have confabbed in recent days to hammer out strategies for heading off a work stoppage.

The planning was capped by a Thursday morning powwow led by Nick Counter, president of the Alliance of Motion Picture & Television Producers. Heavyweights in attendance included CBS topper Leslie Moonves, Warner Bros.' Barry Meyer, ABC's Anne Sweeney, DreamWorks Animation's Jeffrey Katzenberg and NBC's Marc Graboff.

Those at the meeting, Counter told Daily Variety, resolved to propose to the unions in the next few weeks that both sides agree to the creation of a jointly funded outside study group to generate a report -- a showbiz version of the report from the Iraq Study Group, headed by James Baker and Lee Hamilton.

In this case, the panel would be staffed by entertainment industry experts and examine the intricacies of how performers are paid for reuse of their work -- both for traditional residuals and the proliferation of new-media platforms -- along with creating new formulas that could be retroactive.

Counter stressed that specifics of how a study would be conducted are still in the early stages.

"We're not yet at the bargaining table, so all kinds of strategies are under consideration, but I've been instructed to talk about the possibility of a study with the guilds," he added. "A question like retroactivity could be subject to negotiation."

Counter noted that there are precedents for such a study: SAG and AFTRA agreed last year to a two-year contract extension of their commercials contract so an outside consultant could analyze revenue streams; and Canadian performers unions recently agreed to hold off on resolution of some new-media issues until they can by studied further.

The basic premise of the study SAG and AFTRA agreed to last year is that digital delivery platforms had so muddied the outlook for future revenue that an outside expert was needed to analyze the best method of compensating actors in commercials.

"We think that conducting a study is a very responsible approach," Counter said.

The initiative comes with preparations in full swing for the AMPTP's negotiations with the Writers Guild of America. Talks start July 16 for a contract to replace the current three-year deal, which expires on Oct. 31.

WGA West assistant exec director Chuck Slocum told Daily Variety late Thursday that the AMPTP hadn't yet approached the scribe union -- and he questioned the need for such a study.

"My initial reaction is that the marketplace already has our product in it, so there's a whole database of information already available that we can use at the bargaining table," Slocum added. Negotiations are certain to be difficult given the WGA leadership, which is more aggressive than that at the other guiilds; its insistence on boosting members' cut of revenues from new-media platforms; and its desire for jurisdiction over reality shows. As for the companies, they remain aggrieved over the WGA's refusal to hold negotiations early this year in the face of Counter's contention that the new-media issues are so complicated that both sides needed as much time as possible to hammer out an agreement.

The WGA's elected leaders have insisted that waiting until July places them in a better position to evaluate the changes in digital platforms. And Slocum said new-media issues have become an increasingly prominent concern for guild members -- particularly in light of such recent deals as those of CBS for a broad array of online distribution partnerships, announced April 12.

"We are happy every time we hear that they've found a way to make money off our members' work because that means more money for our members," Slocum noted. "The members are excited by what's going on, and they want to know what we're doing about it."

The general problem, Slocum added, is that companies often contend that such Internet deals are promotional in nature -- running for a limited time and designed to keep "bubble" shows on the air -- rather than amounting to reuse, which would trigger residuals. Slocum noted that separate advertising has begun appearing on such shows, possibly deflating the argument that such Net programs are purely promotional.

"If it's a whole show, then it's a reuse," Slocum added. "Companies like to perpetrate the idea that it's all promotional."

Joan Weise, AFTRA's national director of entertainment programming, agreed.

"We are looking at these deals on a daily basis, and we're scouring through them to find out which ones include reuse," she said. "And we don't agree with what the companies are saying about them being promotional."

Weise also said AFTRA staff has received an increasing numbers of calls from members who discover their performances on the Internet, adding, "They're frustrated that this is happening."

Queried about the idea of a study, SAG exec director Doug Allen said the guild's been discussing the suggestion but added that it's too early for SAG to respond. Its contract expires in July 2008 along with the DGA's.

The notion of revamping the entire residuals system has been broached previously by the companies, notably during the 2004 contract negotiations with the Directors Guild of America. During those talks, in response to the DGA's proposal for a hike in the longstanding homevid formula, the AMPTP responded by proposing that such a change was only possible if the DGA were willing to change the basic formulas of the residuals system -- in this case, switching to recoupment formulas, under which the most successful shows would have probably received even more money while the residuals for other shows would have likely been scaled back.

The DGA decided against taking that step, opting instead for a deal that included significant pension and health gains. The WGA and SAG agreed to similar terms a few months later.

The companies and the unions haven't ever really been on the same new-media page, with the guilds routinely blind-sided over announcements about new platforms.

ABC and the unions had a well-publicized clash early last year over the network paying a lower homevid rate for "Lost" and "Desperate Housewives" shows purchased through iTunes. The unions reached a pact at the higher pay TV rate with ABC over mobisodes for "Lost," but that's been mired in arbitration.

On the guild side, preparations for upcoming negotiations are accelerating:

? Top elected reps of the WGA West and WGA East are meeting this weekend about negotiations, with the negotiating committee expected to issue its "pattern of demands" within the next few weeks.

? SAG's national board will be briefed on new-media issues this weekend by staff and by its new-media committee. It's also expected to name the head of its new-media department soon.

? AFTRA announced this week that it had formed a new-media group of execs, which will report to the national board on April 28.

? The DGA has been conducting a new-media study since late last year.

SAG's Allen told Daily Variety that the national board's consideration of new-media issues is informational, with nothing attached as a voting item. He also stressed that SAG's been active in sharing new-media info with the other unions.

"We want to be sure that actors are fairly compensated whenever their image is used," he added. "Our internal research has been focused on new media and technology. We don't have a higher information priority."

Allen also brushed off the idea of SAG extending the film-TV contract for the purpose of conducting a study, adding, "I don't think there's a lot of interest in delaying the negotiations."