Letterman to return in deal with striking writers

(Updates with CBS statement, adds details)

By Steve Gorman

LOS ANGELES, Dec 28 (Reuters) - Late-night TV host David Letterman reached a deal on Friday with the union for striking screenwriters that will let his show return to the air next week while bringing his writing staff back with him.

The Writers Guild of America called its pact with Letterman's production company, WorldWide Pants Inc, a sign of union readiness to negotiate a deal with major film and TV studios to settle Hollywood's worst labor crisis in 20 years.

The WGA said its "comprehensive agreement" with WorldWide Pants included provisions to pay writers for work distributed over the Internet -- presumably covering the large assortment of advertising-supported video clips of Letterman's show that CBS (CBSa.N) posts on its Web site.

Compensation for Internet content has been the main sticking point in stalled talks between the WGA and studios aimed at ending the writers' strike, now in its eighth week.

The strike by 10,500 WGA members has thrown the U.S. television industry into disarray, postponed production on several major motion pictures and is threatening to spoil Hollywood's annual awards season.

The Letterman's deal will pave the way for his "Late Show," and "The Late Late Show with Craig Ferguson," also owned by WorldWide Pants, to resume CBS broadcasts of fresh episodes with their writing staffs intact starting on Wednesday.

Letterman, who like his late-night peers on other networks has kept his show off the air and in reruns since Nov. 5 in support of striking writers, said in a statement he was "happy to be going back to work, and particularly pleased to be doing it with our writers." "This is not a solution to the strike, which unfortunately continues to disrupt the lives of thousands. But I hope it will be seen as a step in the right direction," he added.

The deal could give Letterman a decisive advantage in the late-night ratings war over his chief rival, Jay Leno, host of NBC's "The Tonight Show," who has long commanded a bigger audience and plans to return the same day without writers.

WGA strike rules bar Leno, a union member like Letterman, from preparing any scripted material for his show that his striking writers would normally have produced.

NBC's "Late Night with Conan O'Brien" and ABC's "Jimmy Kimmel Live!" also resume production next week without writers. The NBC (GE.N) and ABC (DIS.N) hosts do not own their own shows, so they are unable to negotiate separate deals.

There was no immediate reaction to Letterman's deal from the studios or their bargaining agent, the Alliance of Motion Picture and Television Producers.

'VERY PLEASED'

CBS said in a statement it "is very pleased that Dave and Craig will be returning on Jan. 2." The network added it "controls the Internet exploitation rights" for both shows and "will comply with any eventual negotiated agreement between the AMPTP and the WGA."