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Studios, directors in accord

The contract could pave the way to ending the writers strike.

January 18, 2008|Richard Verrier and Claudia Eller | Times Staff Writers

The Directors Guild of America, after swift negotiations, reached a new contract with the major Hollywood studios Thursday, a move that ups the ante for striking writers to craft their own accord.

The three-year agreement advances how much directors earn when their work is distributed over the Internet, a keystone in the 11-week-old writers strike that has virtually shut down prime-time TV production and upended Hollywood's most sacred institution: the awards season.

Whether the terms won by directors will be acceptable to writers is not immediately clear.

However, if the Writers Guild of America spurns the DGA deal, tensions that have been brewing could divide and weaken the union.

"If the WGA rejects the basic concepts of a DGA deal, there's going to be a great deal of dissatisfaction among the membership," said Dick Wolf, creator and executive producer of the "Law & Order" TV shows. "The bottom line here is: This town should be back to work in three weeks."

Though writers and directors want the same thing -- compensation for the digital distribution of their work online, on cellphones and on other new-media devices -- they took different approaches. Unlike the writers, directors were less confrontational in their dealings with studios.

The negotiations between the directors and the Alliance of Motion Picture and Television Producers, which represents the major studios, were preceded by weeks of informal talks between the parties. DGA studies also buttressed the studios' position that the future of the entertainment business on the Internet is less certain and developing more slowly than writers contend.

As a result, the directors were able to forge a compact with the big Hollywood studios in relatively short and peaceful order. Among the provisions secured by directors is a doubling of the current residual rate paid for downloads of TV shows and movies and the setting of a residual rate for advertising-supported streaming.

Gil Cates, who chaired the DGA's negotiating committee, said the contract achieved two key goals for the union: jurisdiction over new digital production and fair pay for work shown on the Internet.

"This is a very strong contract which has obvious value in it," Cates said. "I hope it helps the writers."

Signaling that the directors agree with the studios that digital distribution of entertainment is still in an early stage, the contract includes a sunset provision that allows them to revisit new-media residual formulas when the three-year deal expires in 2011. By then, both sides believe, they will have a clearer picture on the economics of delivering movies and TV shows over the Internet.

Concurrent with Thursday's announcement, the major studios, which broke off negotiations with writers in early December, invited the WGA to resume talks.

"We hope this agreement with the DGA will signal the beginning of the end of this extremely difficult period for our industry," eight chief executives said in a statement.

Gov. Arnold Schwarzenegger, visiting The Times on Thursday, said the agreement between the directors and studios could "very well be a motivational vehicle for people to come together."

Some in Hollywood have questioned why Schwarzenegger, who for years was one of the movie industry's biggest action stars, has not done more to help mediate a settlement between the writers and studios.

"They know I am very interested and available all the time," the governor said. "But people have to be ready to make an agreement."

It's unknown, however, whether writers will find the DGA terms sufficiently palatable to frame their own agreement. What's more, leaders of the WGA and the Screen Actors Guild, whose contract expires June 30, have stressed that they won't be tied to terms set by directors.

Distrust between writers and directors goes back a long way. Many writers blame directors for negotiating a much-maligned formula for home video residuals more than two decades ago that became the standard for all talent unions.

However, WGA leaders could face a backlash if they summarily reject the directors deal. In recent meetings with members of the guild's board and negotiation committee, some TV and screenwriters have been urging leaders to seriously consider the DGA deal as a framework to revive their own contract talks.

Anxieties have been running high among television writers, who are rapidly finding themselves out of work because of the strike. ABC Studios, 20th Century Fox Television, CBS Paramount Network Television, NBC Universal and Warner Bros. Television have terminated development and production agreements with writers in the last week.

Jerry Bruckheimer, one of Hollywood's biggest movie and TV producers, said, "There is enormous pressure on everybody to settle this and move on." His TV shows -- including the "CSI" franchise, "Without a Trace" and "Cold Case" -- halted production because of the strike.

Writers, who have been highly vocal during the strike, were guarded in their comments Thursday.

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