US studios close deal with writers

US studios close deal with writers

By Joshua Chaffin in Los Angeles

Published: February 10 2008 19:53 | Last updated: February 10 2008 20:25

Hollywood studios were gearing up on Sunday night to restart television production after Writers Guild of America leaders approved an agreement that would end the industry’s worst labour stoppage in two decades.

The guild’s board and negotiating committee backed the deal, but the broader membership is expected to vote on it on Sunday and Monday. Members are expected to support it and writers could be back at work as early as Wednesday.

The networks are eager to rush their top programmes back to air before the re-run season begins in the summer. The longer they wait, the greater the risk that audiences that have already turned to the internet, video games and other alternatives may never return.

A crucial factor will be whether some writers had continued working on scripts during the layoff. If so, studio executives speculated that production could be accelerated.

The strike, which began on November 5, brought production to a halt at a cost of more than $1bn (€690m, £510m). Films, which require a longer production cycle, were less affected. At the heart of the three-year deal is a formula to divide the spoils from new media, a sector where revenues remain tiny but which could one day dominate the industry.

This was a particularly contentious issue as the writers believe they never received their fair share of revenue from DVDs, once considered a fledgling technology but one that has since become the industry’s most lucrative product.

Writers would also receive residual payments for programmes streamed on the internet, much as they do for traditional television programmes. Beginning in the third year, they would also be entitled to a 2 per cent share of the distributor’s revenues from such streams.

However, enthusiasm about the deal was clouded by the prospect of fresh labour unrest. The Screen Actors Guild contract expires in June, and many in the industry fear that its leadership could push for additional concessions.

There was also broad recognition that the business writers will return to might be substantially changed from the one they left just a few months ago.

The studios seized on the strike to eliminate millions of dollars’ worth of long-term production contracts. One, NBC Universal, has promised more fundamental changes, including deep cuts to the pilot season, in which studios order dozens of sample episodes each year – at a cost of several million dollars apiece – in the hopes of unearthing a single hit.