Dave McNary of Variety:
...Producers unexpectedly pulled their proposal for a three-year study off the table Wednesday -- meaning the companies' remaining take-it or leave-it proposal amounts to a revolutionary revamp of residuals with payments coming only when costs are recouped.
WGA leaders took an assertive tack of their own on Wednesday, insisting that a residuals revamp is out of the question since companies can't be trusted to tell the truth about production costs.
Two members of the Guild negotiating committee accused studios and networks of practicing fuzzy math on net profit participants on hit TV shows such as "The Simpsons" and successful features such as "Chicago."
Alliance of Motion Picture and Television Producers [president] Nick Counter blasted Guild leaders for passing up the study option, which would have retained the current residuals system during the three years.
"While we believe the WGA's rejection of a study is short-sighted and self-destructive, we did give them that option," he said. "The study would not only give us valuable insight into the new world and its impact on traditional media, but also would give us insight on how to deal with the challenges and opportunities, while continuing to compensate writers under the current provisions and side-letters to their 2004 contract."
Counter added a sarcastic swipe at the WGA's assertions that it has a better understanding of the issue than the companies. "The Guild negotiators rejected the study as unnecessary because they have all the answers on New Media -- its viability as a business, consumer demand, even advertiser acceptance," he said.
WGA leaders described the study as a stall tactic and said they prefer to keep the current residuals system since companies find ways to never pay writers in net profit deals -- no matter how well the TV shows or movies do.
"The idea that we could agree on what production costs are is absurd," said WGA negotiating committee chief John Bowman at a news conference at the Guild's Hollywood headquarters. "It's impossible to get a handle on (it). Our history has not been very good with profit-based participation. We're saying the future is now," he added. "Let's negotiate these rates right now."
Wednesday's PR battle also featured attempts by both sides to portray themselves as reasonable and parry attacks from the other side.
Counter said in his statement, "We are committed to negotiating a deal that is fair to everyone, one that respects the needs and concerns of the WGA as well as all the AMPTP member companies, one that maintains industry stability, one that gives us the flexibility to adapt to the revolutionary changes that confront us, one that helps us manage our risks, grow our businesses and share our rewards."
For his part, Bowman said the Guild had called the news conference partly to defuse the perception of the WGA negotiators as "bellicose."
Both sides continued to argue over the economics of showbiz, with the WGA again accusing the companies of duplicity -- telling Wall Street that operations are healthy and then claiming at the negotiating table that they're beset by uncertainty. During the news conference, assistant exec director Charles Slocum offered a recent NBC presentation that showed an 11% hike in revenues from "Heroes" to $940 million -- thanks to diversification of sources such as cable, sell-through, DVDs, online streaming and wireless.
Negotiating team member Larry Wilmore said at the news conference that the WGA's trying to avoid repeating its mistake of 22 years ago when it agreed to a discounted home video formula since the technology hadn't been proven.
"Writers are still waiting for a fair deal," he added. "All we're saying is that if you get paid, we should get paid."...
Both sides have more to say here...
At face value, the demands of the WGA don't seem all that unreasonable, as far as I'm concerned...But then again--I'm not there in the thick of it.
To Be Continued...
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